United Bank for Africa (UBA) Plc has announced its audited half year financial results for the period ended June 2019, showing that profit before tax rose by 21 per cent to N70.3 billion, up from N58.1 billion recorded during the same period in 2018.
According to results filed with the Nigerian Stock Exchange (NSE), the bank’s profit after tax also improved to N56.7 billion, a 29.6 percent growth compared to N43.8 billion achieved in the corresponding period of 2018.
The profit for the first half of the year translated to an annualised return on average equity of 21.7 per cent.
The report also show that UBA recorded a 14 percent year-on-year rise in top-line, with gross earnings of N293.7 billion, compared to N257.9 billion recorded in the corresponding period of 2018.
Analysts say that this result emphasises the capacity of the Group to deliver a strong performance through economic cycles in spite of the overall challenging business environment.
As at 30 June 2019, the bank’s total assets grew by 4.8 per cent crossing the N5 trillion mark to N5.10 trillion.
Customer deposits also rose by 4.8 per cent to N3.51 trillion, compared to N3.35 trillion as at December 2018.
In line with its culture of paying both interim and final cash dividend, the board of directors declared an interim dividend of N0.20 per share for every ordinary share of N0.50 each held by its shareholders.
Commenting on the results, the group managing director and chief executive officer of UBA, Mr. Kennedy Uzoka said: “I am pleased with the half performance of the Group, having delivered 14 per cent growth in gross earnings and 21 per cent growth in profit before tax. Despite the subdued yield environment in some of our large markets, we achieved a 9 per cent growth in interest income and defended the net interest margin. We also achieved a 39 per cent growth in our electronic banking revenues, as we broaden and deepened our digital banking play across Africa. Revenues from our remittance and funds transfer businesses grew 69 per cent and 53 per cent respectively. All these factors attest to the efficacy of our strategies and the resilience of our business model.”
“I am very optimistic that the ongoing Group-wide transformation program, will in the quarters ahead, enable the Bank deliver substantial operational efficiencies and best-in-class customer service, which will ultimately boost earnings. We sustained our asset quality with the NPL ratio down to 5.62 per cent, from 6.45 per cent as at 2018 financial year. We will continue to adopt best practice standards to grow and manage the portfolio in the quarters ahead.”
In his remarks, the bank’s chief financial officer, Ugo Nwaghodoh said: “We had a strong start in the year given the prevailing macroeconomic environment across our various markets. There is better diversification in profit contribution as our banking subsidiaries across Africa contributed 38 per cent of the profit before tax, whilst our recently re-positioned UK business contributed 4 per cent. We expect this dispersion to continue, as the subsidiaries consolidate on their share of the various markets.
“I am particularly delighted that the key ratios are trending in the right direction. The net interest margin is trending upwards and will continue to improve as we responsibly grow the risk asset portfolio and realign the funding mix to lower our cost of funds.
“The cost-to-income ratio trended down to 60 per cent with our focus on balance sheet and operational efficiencies which should enable us deliver our medium term CIR target. Capital adequacy ratio increased to 28 per cent from 23.6 per cent in December 2018, providing a very strong buffer for asset growth.”
