April 23, 2020

By Yakubu LAAH InvestAdvocate

Lagos (INVESTADVOCATE)-Africa’s global lender, the United Bank for Africa Plc (UBA) said on Thursday said its post-tax profit for the period ended March 31, 2020 climbed up 8.5 percent to N32.72 billion from N30.15 billion recorded a year ago.

Profit after tax (PAT) grew 5.0 percent to N30.10 billion from N28.66 billion declared the same period of 2019.

Interest income of UBA increased from N98.56 billion in the first quarter (Q1) of 2019 to N109.10 billion posted in the review period of 2020; showing an increase of 10.7 percent, Africa’s global lender said in a filing with the Nigerian Stock Exchange (NSE).

Shares of UBA at the close of Thursday’s trading on the Nigerian bourse appreciated 1.71 percent to N5.95 from N8.85 traded the previous session; gaining 0.10 kobo per share.

Driven by a year-on-year growth in interest income, UBA Group recorded a 11.8 percent percent year-on-year growth in gross earnings to close at N147.2 billion for the three months period ending March 2020, compared to N131.7 billion recorded in the first three months of the year 2019. 

The bank’s total assets also rose by 13.4% to N6.4 trillion in the period under review, compared to N5.6 trillion recorded at the end of the 2019 financial; while shareholders’ funds grew to N612.6bn from N597.9 billion in the same period.

A statement from the bank made available to InvestAdvocate says Kennedy Uzoka, group managing director/CEO expressed satisfaction with the Bank’s performance in the first quarter of 2020, which according to him remains encouraging despite the challenging business environment. 

“We are pleased with our top and bottom lines in the first quarter of 2020, delivering N147.2billion in gross earnings and profit before tax of N32.7billion. The double-digit growth in the topline testifies to the resilience of our business model as a group, even as the 17% growth in our fees and commission income underscores our diversified business model, enabling us to deliver best value to our stakeholders, even in tough macroeconomic scenarios,” he said.

“I am very excited about recent successes we have recorded in all our business segments, especially our retail and electronic banking businesses within the period, with retail deposits accounting for 72% of customer deposits even as cost-of-funds moderates to 3.3%. We will continue to grow market share in all our markets, whilst maintaining cost discipline across our businesses, driving efficiency in our processes using best-rated technology,” Uzoka affirmed.

Speaking on customers’ growing concerns on banking services during the lockdown due to the coronavirus pandemic, Uzoka explained that the bank has put in place various strategic channels to ensure that customers transactions are effectively carried out with ease.

“In response to the spread of COVID-19 several national governments have announced a partial or total lock down in a number of our markets, post Q1 2020. Fortunately, we have built robust electronic channel platforms to enable us effectively serve our customers from the convenience of their homes. Despite the lock down, our banking channels have remained open to our customers 24/7, even as we continue to align and adapt our operating model to ensure we service our customers excellently and safely,” he added.

According to Uzoka, as economies and businesses adjust to the headwinds occasioned by the novel Covid-19 pandemic, the bank has been identifying emerging strategic opportunities arising from this and positioning to take full advantage of this to delight customers and create value for stakeholders. “We also remain committed to our prudent risk management practices, as profitable growth and good asset quality remain our priority in 2020,” the UBA CEO said.

Commenting on the result, Ugo Nwaghodoh, group chief finance officer said UBA’s profitability ratios are upbeat and indicative of the bank’s good earnings quality and cost efficiencies. “We recorded a return on average equity (ROAE) of 20 percent for the period, bolstered by a net interest margin of 6 percent and 11.6 percent growth in net fee and commission income. Amidst the volatile operating environment, the Bank recorded a net loan growth of 9.5 percent whilst maintaining our low to moderate risk appetite,” the GCFO said.

“Remarkably, our operating income grew 12.2%, giving credence to improved operational efficiency across the group, and the increasing contribution of subsidiaries to our earnings base. We are exploring and taking advantage of all opportunities to improve our operational and balance sheet efficiencies, given the prevailing market condition,” Nwaghodoh added.