By InvestAdvocate
Lagos (INVESTADVOCATE)-Africa’s global lender, the United Bank for Africa Plc (UBA) said on Tuesday its profit after tax (PAT) for the period ended September 30, 2016 grew 7.64 percent to N52.3 billion from N48.5 billion recorded a year ago.
Profit before tax (PBT) rose the same margin of 7.64 percent to N52.3 billion from N48.5 billion declared the same period of 2016.
Gross earnings of UBA also appreciated from N245.5 billion in the nine months period of 2016 to N265.5 billion posted in the corresponding period of 2016; showing a drop of 8.2 percent, the Africa’s global lender said in a filing with the Nigerian Stock Exchange (NSE).
Analysts at Cordros Capital says annualised earnings per share (EPS) was N2.00 (actual N1.50), outperforming consensus estimate of N1.66.
Cordros reported that net interest income of Africa’s global lender increased by 9.8 percent year-on-year (y/y) but surged by 61.4 percent on a quarterly basis. “The high interest rate environment post the July MPC rate hike is reflected in the result, with interest income and interest expense expanding by 44.0 percent quarter-on-quarter (q/q) and 21.4 percent q/q respectively,” the Cordros report affirmed.
UBA also recorded a 48.6 percent growth in its loan book and a 19.9 percent expansion in customer deposits. “The significant increases in net loans and customer deposits are likely to be as a result of the effect of the naira devaluation on foreign currency portions of loan and deposits,’ Cordros added.
Non-interest income increased by 9.0 percent y/y but slumped by 45.7 percent q/q following a significant drop in foreign currency derivative earnings to a loss of N1.4 billion, from a gain of N15.9 billion as at half year.
Cordros further reports that impairment charges increased by 68.6 percent y/y but fell 60.6 percent q/q. Operating expenses increased 7.6 percent y/y but increased by 17.5 percent q/q following increases in “personnel costs” and “other operating costs.” Cost-to-income ratio (CIR) increased to 64.6 percent in 9M’16 from 63.1 percent as at H1’16 but was in line with management guidance of c.65 percent.
Overall, PBT increased by 7.3 percent y/y but fell by 4.1 percent q/q. Return on Average Equity improved to 18.4 percent from 18.1 percent in H1’16 but was still behind management guidance of c.20 percent.
Click here to download United Bank for Africa Plc 2016 Nine Months Report
