United Bank for Africa (UBA) stuned the stock market on Monday with the announcement of a record-breaking N2 per share interim dividend for its shareholders.
This development, which marks the highest interim dividend payout among Nigerian banks in the first half of 2024, immediately ignited investor confidence, leading to a significant surge in UBA’s share price.
The stock climbed by 9.99% to close at N28.30 per share, positioning it at the top of the gainers’ chart on the Nigerian Exchange (NGX). This strong performance reflects heightened investor interest and is directly tied to the stellar dividend payout underpinned by the half-year financial results posted by the bank.
Investors are particularly buoyed by UBA’s commitment to rewarding shareholders with a N2 dividend, representing a total payout of N68.4 billion. This translates to a 21.6% dividend payout ratio, one of the highest in the industry.
The significant dividend payout by UBA also comes against the backdrop of the ongoing bank recapitalization in Nigeria, which excludes retained earnings from the calculation of share capital.
Analysts suggest that UBA’s large dividend payout, amounting to N68.4 billion, indicates that the bank’s profits are well-supported by cash, rather than relying on retained earnings.
Shareholders who are on the bank’s register as of October 14, 2024, will qualify to receive the dividend, which will be disbursed on October 22, 2024.
The stock surged by 9.99% to close at N28.30 per share, positioning it at the top of the gainers’ chart on the Nigerian Exchange (NGX).