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BANKING AND FINANCE

UBA Records N105bn Profit Before Tax

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United Bank for Africa (UBA) Plc has recorded a profit before tax of N105.26 billion for the audited financial results for the year ended December 31, 2017.

The full year results released on the Nigerian Stock Exchange (NSE) at the weekend showed that its profit before tax grew by 16 per cent from N90.64 billion posted in the corresponding period of 2016.

Also, the management of the bank proposed a final dividend of N20.52 billion or 60 kobo per share, bringing total dividend payment to 85 kobo. UBA had last year paid an interim dividend of 20 kobo per share.

The pan-Africa financial institution grew its gross earnings for the period by 20 per cent to N461.557 billion, as against N383.65 billion reported in 2016.

The bank’s soaring business performance was driven by the 23.3 per cent growth in interest income.

The group’s operating income stood at N326.57 billion, compared to N270.889 billion recorded in the corresponding period of 2016, representing a 20.55 per cent growth.

In the same vein, the group recorded a profit after tax of N78.59 billion, translating to a nine per cent growth over the N72.264 billion recorded in the full year of 2016.

The group closed the year 2017 with total assets of N4.069 trillion, higher than N3.50 trillion in 2016, while total liabilities also increased to N3.54 trillion as against N3.056 trillion.

Deposits from customers also rose to N2.73 trillion from N2.49 trillion, just as loans and advances to customers grew to N1.65 trillion, compared to N1.51 trillion as at December 31, 2016.

According to the result, the bank’s subsidiaries outside the country contributed a third of the Group’s top-line and 45 per cent of the profit for the year, an improvement from the 31 per cent contribution made in 2016.

This, according to market analysts, affirms the success of the Bank’s expansion strategy, with target of 50 per cent contributions by 2020.

The audited results also showed that the bank’s total assets peaked at N4.07 trillion, translating to 16.1 per cent year-on-year growth from the figure of N3.50 trillion recorded as at 2016 financial year.

In the 2017 financial year, net loans rose by 9.7 per cent to N1.65 trillion, while the customer deposits grew to N2.73 trillion, representing 10 per cent year on year growth on N2.49 trillion recorded in 2016 financial year.

Shareholders’ fund of the UBA Group stood at N529.4 billion in the 2017 financial year, an 18.2 per cent improvement over the 2016 figure. Consequently, the Board of the bank had proposed a final dividend of 65 kobo per every share of 50 kobo each, subject to the approval of the shareholders.

This final dividend proposal is in addition to the 20 kobo per share interim dividend paid after the audit of the 2017 half year financial statements, thus putting the total dividend for 2017 financial year at 85 kobo per share.

Commenting on the result, the group managing director and chief executive officer of the bank, Kennedy Uzoka, said, “The results underlines the success of our strategy of expanding across Africa, diversifying revenues and capturing the broader business opportunities inherent in Africa’s growth. The results reinforce the sustainability of our business model and the capacity to deliver superior long-term return to shareholders, as the economic and business environment improve.

“In 2017, we made strong progress in our strategic initiative of dominating transaction banking across all our countries of operation, gaining market share in all lines of our business. Even as the non-oil sectors of our largest country of operation, Nigeria, remained relatively weak, we still grew earnings by 20% to N462 billion, a third of which is attributable to non-funded income”. 

Also speaking on UBA’s financial performance and position, the Group’s chief finance officer (GCFO), Ugo Nwaghodoh said, “In a period of high interest rates, we achieved a relatively low 3.7 per cent cost of funds. This operational efficiency reflects the benefit of our rich pool of stable savings and current account deposits.

“The net interest margin stabilised at seven per cent, even as yields on treasury assets dropped in the last quarter of 2017. Our core transaction banking offerings gained strong momentum, with income from these business lines growing by double digits.

“We remain committed to our responsible approach to balance sheet management, with focus on growing risk asset and broader balance sheet in a profitable and prudent manner. Amidst a subdued Nigerian credit market, we grew our loan portfolio by 10%, leveraging our robust liquidity and capitalization to support good businesses through this challenging economic cycle.



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