Quarter Under Review: -THIRD QUARTER 2026
Current Share Price: N16.94
Latest Final Dividend: N0.30
Latest Interim Dividend: N0.30
Estimated Beta Value: 0.29x
Estimated Intrinsic Value: N23.96
Ratings: Buy
Analyst: Jeariogbe Tunde Segun
The Company
United Capital Plc (UCAP) traces its roots to United Bank for Africa (UBA) Plc, where it started as UBA Global Markets, the investment banking division of the banking group. It was subsequently incorporated as UBA Capital, a subsidiary of UBA Plc, on March 14, 2002, with the objective of providing specialized financial and investment-banking services. Over the years, the business expanded its activities beyond traditional investment banking into areas such as asset management, trusteeship and securities trading. In 2012, the business was spun off from the UBA Group, restructured as UBA Capital Plc and subsequently listed on the Nigerian Stock Exchange (now Nigerian Exchange) in January 2013. This made it the first investment banking company listed on the Nigerian bourse.
Following its separation from UBA, the company sought to establish a distinct identity and broader financial-services franchise. In December 2014, shareholders approved the change of name from UBA Capital Plc to United Capital Plc, reflecting its independent identity from UBA. Since then, UCAP has developed into a diversified financial-services group with operations spanning investment banking, asset management, trusteeship and securities trading, while subsequently expanding into consumer finance and microfinance banking. The Group has also extended its footprint beyond Nigeria, with operations in Ghana and other African markets. It has continued to develop technology-driven investment solutions for retail and institutional clients.
Statement of Comprehensive Income
United Capital Plc recorded a strong improvement in its top-line performance in the nine months ended September 2026. Gross earnings increased by 50.37% to ₦62.47 billion, from ₦41.54 billion in the corresponding period of 2025, while net operating income rose by 47.82% to ₦55.58 billion, compared with ₦37.60 billion in 9M 2025. The growth reflects a broad improvement in the company’s income-generating activities and indicates sustained momentum across its core financial-services operations.
Operating costs, however, grew at a slower rate than net operating income. Personnel expenses increased by 25.79% to ₦6.42 billion, while other operating expenses rose by 33.48% to ₦15.69 billion, bringing total operating expenses to ₦22.11 billion, up 31.15% from ₦16.86 billion. Depreciation and amortization increased significantly by 72.74% to ₦1.04 billion, suggesting higher investment in assets and/or technology. Despite the increase in costs, the substantial growth in income provided sufficient operating leverage to support a strong expansion in profitability.
Consequently, profit before tax rose by 66.24% to ₦41.58 billion, from ₦25.01 billion, while tax expenses grew by 75.77% to ₦6.75 billion. Profit after tax consequently increased by 64.51% to ₦34.83 billion, compared with ₦21.17 billion in 9M 2025. The table also shows total comprehensive income of ₦101.34 billion, compared with ₦110.81 billion in the previous year, representing an 8.55% decline, despite the strong growth in profit after tax. Overall, the underlying earnings performance was robust, with profit growth significantly outpacing the increase in operating expenses.
Statement of Financial Position
United Capital Plc’s total assets stood at ₦1.814 trillion as at September 2026, representing a 2.89% decline from ₦1.867 trillion in the previous year. Total liabilities also declined by 3.73% to ₦1.576 trillion, from ₦1.638 trillion. Despite the contraction in total assets, the company recorded a significant improvement in liquidity, with cash and cash equivalents rising by 30.28% to ₦618.08 billion, compared with ₦474.44 billion in 2025. This provides a stronger immediate liquidity position and supports the company’s capacity to meet its financial obligations.
The company’s net assets increased by 3.12% to ₦237.08 billion, from ₦229.91 billion, indicating a modest strengthening of its underlying asset base. Property, plant and equipment increased substantially by 295.52% to ₦8.69 billion, from ₦2.20 billion, suggesting increased investment in physical assets and infrastructure. However, managed funds declined by 3.29% to ₦1.038 trillion, from ₦1.073 trillion, pointing to a slight reduction in the funds under management during the period. Other borrowed funds also declined by 10.42% to ₦320.08 billion, which is positive from a leverage perspective.
Retained Earnings improved by 58.31% to N73.62billion from N46.50 billion. Share capital remained unchanged at ₦18.00 billion, indicating no change in the reported share capital during the period. Overall, UCAP maintained a relatively strong liquidity position and modestly improved net assets, although the decline in total assets, managed funds and particularly retained earnings warrants close attention.
Financial Strength/ Solvency Ratio
United Capital Plc recorded a modest improvement in its financial strength and solvency position in 9M 2026. The debt ratio declined to 86.93%, from 87.69% in 2025, indicating a slight reduction in the proportion of assets financed by debt. Similarly, the total debt-to-equity ratio fell from 7.12x to 6.89x, suggesting a marginal reduction in financial leverage. Although the leverage level remains relatively high, the year-on-year movement is positive and indicates a small strengthening of the company’s capital structure.
The equity ratio improved to 13.07%, from 12.31% in 2025, meaning shareholders’ funds now account for a slightly larger proportion of total assets. This improvement is consistent with the decline in the debt ratio and debt-to-equity ratio. Overall, UCAP’s financial-strength position has improved moderately, supported by lower leverage and a stronger equity proportion, although the relatively high debt-to-equity ratio means the company remains substantially dependent on liabilities to finance its asset base.
Profitability Ratios
UCap recorded a significant improvement in profitability in 9M 2026. Profit margin increased to 55.76%, from 50.97% in 9M 2025, representing a 9.40% improvement, while the pre-tax margin rose to 66.57% from 60.22%, a 10.55% increase. This indicates that the company converted a larger proportion of its revenue into profit before and after tax, reflecting stronger earnings performance and improved operating efficiency.
The company also recorded substantial improvements in returns on its asset and equity bases. ROE increased by 59.54% to 14.69%, from 9.21%, while ROA rose by 69.40% to 1.92%, from 1.13%. These movements indicate that UCAP generated considerably higher returns from both shareholders’ funds and its asset base during the period. However, the effective tax rate increased moderately to 16.24%, from 15.36%. Overall, the profitability position is stronger in 2026, with higher margins and significantly improved ROE and ROA.
Efficiency Ratios
The company recorded a notable improvement in operational efficiency in 9M 2026. The OPEX-to-total-revenue ratio declined to 35.39% from 40.58%, representing a 12.78% improvement, indicating that a smaller proportion of its revenue went into operating expenses. Meanwhile, total revenue to total assets increased to 3.44% from 2.22%, a 54.84% improvement, showing that UCAP generated more revenue from its asset base during the period. Overall, the efficiency indicators point to a better cost management and improved asset utilization in 2026.
Investment/Valuation Ratio
UCap recorded strong improvements in its earnings performance and valuation metrics in 9-Months 2026. EPS increased by 64.51% to ₦1.94, from ₦1.18 in 9M 2025, reflecting the substantial growth in profit after tax. At the same time, earnings yield increased to 11.69%, from 6.53%, while the P/E ratio declined sharply to 8.55x, from 15.30x. This combination of higher earnings and a lower earnings multiple suggests that the shares became relatively more attractive on an earnings basis during the period.
The book value per share increased modestly to ₦13.17, from ₦12.77, representing a 3.12% improvement, while TCIP per share declined to ₦5.63, from ₦6.16. The price-to-book value (PBV) ratio also declined to 1.26x, from 1.41x, indicating a lower market valuation relative to the company’s book value. Overall, the investment/valuation indicators present a more favorable picture in 2026, driven particularly by stronger EPS, higher earnings yield, and lower P/E and PBV multiples, although the premium of the market price over book value remains evident.
Final Verdict – United Capital Plc (UCAP)
United Capital Plc delivered a strong 9M 2026 performance, with gross earnings rising 50.37% to ₦62.47bn, profit before tax increasing 66.24% to ₦41.58bn and profit after tax advancing 64.51% to ₦34.83bn. Profitability and efficiency also improved significantly, while the debt ratio and debt-to-equity ratio declined modestly. The company further strengthened liquidity, with cash and cash equivalents rising to ₦618.08bn, while shareholders’ funds increased substantially. These improvements indicate stronger earnings capacity, better cost efficiency and a more favorable financial position.
We have estimated our Intrinsic Value at ₦23.96 per share. At the current market price of ₦16.90, UCAP trades at about 29.5% below our estimated intrinsic value, providing a reasonable margin of safety. The shares also trade at only 8.55x earnings and 1.26x book value, compared with 15.30x and 1.41x respectively in 2025. The market price therefore appears relatively inexpensive in relation to the company’s improved earnings performance. Thus, we rated the stock a BUY.
The principal attraction is the combination of strong earnings growth, improving ROE/ROA, better operating efficiency, declining leverage and relatively low valuation multiples. The major caution is that the business remains highly leveraged relative to shareholders’ equity, while the 9-Month result is unaudited. Nevertheless, on the available fundamentals and valuation, UCAP appears undervalued and offers a favorable risk-reward profile at ₦16.90 per share.
