By Peter Egwuatu

Investors and financial analysts have responded positively to the impressive audited half year results of United Bank for Africa (UBA) Plc as its share rose by 27.3 per cent.

The bank’s shares consecutively led the price gainers’ chart, gaining 27.3 per cent within three trading sessions to close at N4.20 per share on Monday. The appreciation of the bank’s share price is well above the 4.25 per cent appreciation in the All Share Index (ASI) in the same period.

This is an indication of the strong demand for UBA shares, after the positive results announcement. UBA shares also ranked among the top three most traded stocks on the Nigerian Stock Exchange (NSE) within the period, thus reinforcing the liquidity of the stock.

More importantly, most analysts believe that UBA is trading at significant undervaluation to its intrinsic value, as both foreign and local analysts believe the stock should trade between N6.59 and N8.50 over the next 12 months. According to Bloomberg, analysts like Rencap value the stock at N8.00, whilst their colleagues at CSL Stockbrokers value UBA at N7.20/share. One notable consensus is that all analysts believe that the stock is grossly undervalued and investors may soon realise the true intrinsic value of the stock, as the bank consistently delivers superior return to shareholders.

UBA on 3 September released its audited half year results showing earnings grew strongly by 21 per cent to N166.9 billion during the period, compared to N138.2 billion in the same period of June 2014.

The bank’s profit before tax (PBT) also rose 35.1 per cent to N39.0 billion, while profit after tax (PAT) was up a significant 40 per cent increase to N32 billion within the same period. As a reward to shareholders, the bank announced the payment of an interim dividend of 20 kobo per share.

Further analysis of the UBA 2015 half year results showed significant improvement in operational efficiencies. The bank’s net operating income rose 21 per cent to N108.7 billion in June 2015.