The audited 2016 half-year financial results of United Bank for Africa Plc (UBA) for the period ended June 30, 2016 have shown that it recorded gross earnings of N166 billion, net operating income of N109 billion and profit before tax of N40 billion.
According to a statement, the bank also recorded a significant growth in total assets, rising 20 per cent to N3.3 trillion, crossing the three trillion mark.
Following this performance, the bank’s board recommended the payment of 20k interim dividend on every ordinary share of 50k each, amounting to N7.26billion.
Speaking on the results, Kennedy Uzoka, the GMD/CEO, UBA Plc said the results were achieved amid waning economic fundamentals:
“We delivered profit in excess of N40 billion and grew balance sheet by 20%, with our on-balance sheet total assets crossing the N3 trillion mark. Even as Naira depreciation and inflationary pressure increased the cost of doing business in Nigeria, we leveraged our economics of scale, enhanced operational efficiency and Group shared service structure to moderate our cost-to-income ratio by 90bps.”
UBA achieved several strong positives in its performance for the half year. The bank’s net loan position rose 29 per cent to N1.29 trillion partially boosted by the depreciation in the value of the Naira. UBA also recorded a significant 16 per cent growth in deposits to N2.41 trillion already surpassing the 15 per cent target growth in deposits set at the beginning of the year. Another positive for UBA was a drop in cost to income ratio to 63 per cent as at half year compared to 64 per cent in same period of 2015. It is noteworthy that the bank maintained its strong asset quality, with non-performing loans ratio at 2.4 per cent; well below the CBN set limit of 5 per cent for the banking industry.
Uzoka said: “UBA will sustain its culture of keeping a healthy balance sheet, with strong liquidity and capitalization, as reflected in the liquidity and BASEL II capital adequacy ratios of 45 per cent and 18 per cent respectively.”
“Notwithstanding the current slowdown in economic activities, we see bright spots ahead, especially as we see strong prospect to grow market share across all chosen economies, through our enhanced dedication to customer service”.
Explaining the major drivers behind UBA’s strong performance, the Group CFO, Ugo Nwaghodoh, said, “This impressive performance was driven by increased transaction volume, balance sheet growth and efficiency as well as a disciplined management of operating cost. We achieved a 60bps moderation in funding cost, despite the tighter interest rate environment, as we continue to improve our deposit mix, towards low cost savings and current accounts.”
Nwaghodoh said that UBA’s performance in the period endorses the bank’s resilient ability to profitably grow its business from sustainable core banking offerings.
“Notwithstanding the challenging macro and regulatory environment, we achieved a 17.3 per cent return on average equity in the period” even as the total equity of the Bank grew 23% to N407 billion.
He explained that the bank’s African subsidiaries continue to record significant milestones in their performance, as two erstwhile loss making subsidiaries are now profitable and having positive contribution to the bank’s bottom line.
“Overall, African subsidiaries, contributed a quarter of the Group’s profit, with an even stronger outlook, as we deepen our penetration of the respective markets, the Group CFO added.”