E-Financial
JP Morgan Recommends UBA Shares over 45% Upside Potential
Investors that take position on UBA shares now have the chance of making as much as 45% return over the next 12 months writes US based Investment banking giant, JP Morgan, in its latest analysis of Nigerian banks.
“UBA offers an attractive 45% upside potential over 12 months, among the highest in CEEMEA banks” according to the JP Morgan report released October 2013.
CEEMEA is an acronym for Central and Eastern Europe, Middle East and Africa. It is used by investment analysts to refer to reports that cover economies or businesses in this region.
“We think UBA’s valuation, despite a strong rally since the beginning of the year, offers an opportunity to buy into probably the deepest valuation discount in CEEMEA banks at current levels” states the JP Morgan Report while explaining the rational for recommending UBA’s shares.
The report also notes that investors may be missing out on the opportunity presented by UBA shares despite improving fundamentals of the bank. “However, consensus is catching up fast – UBA has the best buy, or hold, or sell ratio on Bloomberg consensus.”
The JP Morgan report also explains that UBA benefits from significant balance sheet liquidity noting that the bank’s loan to deposit ratio of 37% as at half year 2013 was the lowest among CEEMEA banks covered by the investment bank.
JP Morgan however forecast that UBA’s loan to deposit ratio is “conservatively expected to rise gradually to 45% by 2016 year end.
JP Morgan notes that UBA’s loan to deposit ratio is “reflected in UBA’s market shares where it is second in Nigeria in deposits with 13% market share, but has lowest lending market share at 8% among the four biggest banks JP Morgan tracks in Nigeria.
UBA pan-African presence is also seen as strength in the bank’s operations. JP Morgan notes that UBA has the highest number of subsidiaries in Africa among the top-tier Nigerian banks with positions in 18 African countries outside Nigeria and potential to drive future revenues on rising intra-Africa trade.
“This pan-African presence and valuation discount increases the attractiveness of UBA as a potential take-out story, in our view, given our understanding on larger regional banks (e.g. South African banks) for pan-African franchises such as UBA’s.”
Notably, “UBA has the lowest mix of Commission on Turnover (COT) growth in its overall fee income mix when compared with peers. Excluding fee income, we see average Net Interest Income (NII) growth of 15% every year from 2013 to 2016” according to the JP Morgan report.
“UBA’s valuation is an opportunity to buy into what may be the most attractive risk-reward in CEEMEA banks; for a 33% valuation discount versus peers, we estimate UBA offers 23% 2014 year end premium on Return on Equity (ROE) and significantly higher dividend yield of 10% by 2014 year end”
JP Morgan expects that the Nigerian government’s reforms agenda in oil and gas, power, agriculture and infrastructure sectors will drive the future banking growth, the sector which UBA has recently been highly bullish on with new loan growth targeted at these sectors.
UBA only last week released its third quarter 2013 financial results which shows a significant 26.7% growth in loan portfolio, as the bank positions to take advantage of emerging opportunities in the power and oil and gas sectors of the Nigerian economy.
The nine-month results put the bank’s new loan portfolio position at N870.4 billion as at September 2013, representing a 26.7% increase on N687.4 billion loan portfolio for full year of 2012. “We increased our exposure to the power, upstream oil and gas and telecoms sectors of the economy” explained Phillips Oduoza, group managing director.
The bank also announced gross earnings of N188 billion, representing 12.5% increase from N167.1 billion in the same period of last year while interest income rose 18.8% to N133 billion from N112 billion.
There was a significant 28.5% increase in total comprehensive income for the period to N48.74billion, compared with N37.92billion in the same period of last year while the bank closed the first nine months of the year with a profit of N43.4billion.
By 8 am on July 9, GTCO Holdings is set to commence trading on the London Stock Exchange.
As the group is set to list all its shares on the London Stock Exchange, becoming the first Nigerian banking entity to do so.
This is as the group launches a public offer of new ordinary shares to raise approximately $100 million on the London Stock Exchange.
The equity offering, which is an accelerated bookbuild and managed by Citigroup, began on July 2 and is to last until July 31.
On July 31, the group announced that it would cancel the listing of its Global Depositary Receipts (GDRs) on the UK Financial Conduct Authority’s (FCA) Official List.
It will also cancel their admission to trading on the London Stock Exchange (LSE)’s main market.
In place of the GDRs, the group will list all its ordinary shares directly.
aims to admit all its shares to the equity shares category for international commercial companies under a secondary listing on the FCA’s Official List.
The shares will also begin trading on the LSE’s main market for listed securities.
According to a regulatory filing on the London Stock Exchange, the net proceeds from the offering will be used to recapitalize GTBank Nigeria.
Based on the prevailing exchange rate of N1,540 to the US dollar, the targeted $100 million equates to approximately N154 billion.
This capital raise is expected to position the Group to fully meet the N500 billion minimum paid-up share capital required by regulators for banks with international licenses.
As of now, both Zenith Bank and Access Holdings have already met—and exceeded—this threshold.
The National Insurance Commission (NAICOM) has handed over new licenses to SanlamAllianz Life and General Insurance Nigeria Ltd at brief ceremony held in Abuja.
Olusegun Omosehin, commissioner for Insurance emphasized the Commission’s commitment to supporting the growth of insurance entities in the country, while ensuring strict compliance with regulatory requirements. He urged the companies to prioritize good corporate governance, stability, and timely claims settlement processes.
The Commissioner reiterated NAICOM’s dedication to removing unnecessary bottlenecks and improving the insurance industry’s overall performance. He expressed confidence that the merger would enhance the companies’ capabilities and contribute to the industry’s growth.
SanlamAllianz recently launched its operations in Nigeria, marking a significant step in the company’s Pan-African expansion.
The launch follows the merger of Sanlam and Allianz’s Nigerian operations, creating a new entity named SanlamAllianz Nigeria.
This joint venture aims to transform the Nigerian insurance landscape by offering enhanced customer experiences, innovative solutions, and improved financial inclusion.
World Bank has approved an additional $65 million loan for Nigeria to support the Sustainable Procurement, Environmental, and Social Standards Enhancement (SPESSE) project, increasing the total financing for the initiative to $145 million.
The approval was granted on June 24, 2025, according to details posted on the World Bank’s website, which also indicates that the project’s status has moved to “active” following the approval.
The SPESSE project, initially launched with an $80 million loan approved in February 2020, aims to strengthen institutional capacity for managing procurement, environmental, and social standards in both the public and private sectors across Nigeria.
The World Bank described the project’s development objective as the establishment of sustainable capacity in these areas.
This latest approval is part of a broader wave of financing expected from the World Bank to Nigeria in 2025.
The bank is scheduled to approve loans totalling $1.61 billion over the coming months, supporting various development initiatives.
Among these is a $300 million loan for the ‘Solutions for the Internally Displaced and Host Communities Project,’ expected to be finalised by the end of July.
This project aims to improve access to basic services and economic opportunities for internally displaced persons (IDPs) and host communities in selected local government areas in northern Nigeria.
In September, the World Bank plans to approve four additional loans: a $10.5 million facility to support technical assistance for the Central Bank of Nigeria, a $300 million Health Security Program targeting Western and Central Africa (Nigeria – Phase IV), a $500 million project for building resilient digital infrastructure (BRIDGE), and a $500 million loan under the Nigeria Sustainable Agricultural Value-Chains for Growth project aimed at promoting sustainable growth and job creation within key agricultural sectors.
Earlier in March 2025, the bank approved three financing requests amounting to $1.13 billion.
These funds are directed towards projects focused on enhancing quality education, boosting household and community resilience, and improving nutrition.
Among the approved loans were $80 million for the Accelerating Nutrition Results in Nigeria 2.0 project, $552 million for the HOPE for Quality Basic Education for All programme, and $500 million for the Community Action for Resilience and Economic Stimulus Programme.
In February, the Nigerian government announced expectations of new World Bank loans totalling $2.2 billion for six different projects in 2025. This follows a $1.5 billion loan disbursed in 2024 aimed at strengthening Nigeria’s economic stability and resource mobilisation efforts.
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