" />

How UBA Defied gloom: Grows profits and stock value

By OKEY ONYENWEAKU

Kennedy Uzoka, GMD UBA

Sweeping past recession troubles, United Bank for Africa (UBA) has grown its third quarter (Q3) 2017 profit by 33.2 per cent, one of the strongest year-on-year earnings growth rate amongst first tier deposit money banks (DMB’s) in Nigeria.

UBA also pushed up its gross earnings by 25% from N265.5billion in Q3 2016 to N333.9billion in Q3 2017. The banks fees and commissions rose slightly from N56.215billion in 2016 to N57.885billion in the contemporary period of 2017, while its operating income leapt 29% from N183.2 billion to N236.9billion.

Sweeping past recession troubles United Bank for Africa (UBA) has grown its third quarter (Q3) 2017 profit by 33.2 per cent, one of the strongest year-on-year earnings growth rate amongst first tier deposit money banks (DMB’s) in Nigeria.

UBA also pushed up its gross earnings by 25% from N265.5billion in Q3 2016 to N333.9billion in Q3 2017. The banks fees and commissions rose slightly from N56.215billion in 2016 to N57.885billion in the contemporary period of 2017, while its operating income leapt 29% from N183.2 billion to N236.9billion. Surprisingly the bank saw its electronic banking revenue slump 37 per cent dropping from N24.804billion in Q3 2016 to N15.605billion in the contemporary period of 2017.

The banks total assets inched up from N3.5trillion in 2016 to N3.7trillion in 2017. Its total operating expenses rose by 26% from N115.2billion the previous year to N145.6billion in 2017.  Total deposits rose by 1.3% from N2.485billion in 2016 to N2.519billion in 2017.

In half year (H1) 2017, UBA latched on to the relative stability of the foreign exchange market to strengthen its performance, resulting in shareholders smiling with 20 kobo interim dividends tucked in their wallets.

The bank’s half year performance showed a 56.19 per cent rise in post-tax profit to N42.34 billion 2017, propped by a 238.43 per cent rise in forex income to N19.62 billion and a 170.57 per cent increase in fixed income securities to N5.61 billion and a -95.70 per cent slicing of the banks forex revaluation loss to N179 million from N4.17 billion in 2016.

The country’s forex market has enjoyed visible stability since the Central Bank of Nigeria (CBN) commenced aggressive intervention in February, supplying over $10 billion into the market so far and introducing a new Forex window, the Nigerian Autonomous Foreign Exchange (NAFEX). The naira had previously reached a record N525 against the dollar in February before the regulator took measures t stem the bloodletting, which brought about convergence between the NAFEX window and the parallel market, where the currency now exchanges for between N360 and N370 to a dollar.

UBA’s H1 2017 performance was impressive as its interest income grew at double digits, Robert Omotunde, a financial analyst with Afrinvest West Africa Limited noted that, “the banks African foray has proven prescient as a large chunk of its earnings now come from outside Nigeria, reducing the banks country risk’. He expressed optimism that UBA would sustain its performance.

The bank saw its gross earnings climb 34.51 per cent to N222.72 billion on the back of a 44.25 per cent rise in interest income to N154.95 billion and 44.09 per cent increase in other income to N28.29 billion, although, fees and commissions slipped by -1.27 per cent to N36.47 billion (H1 2016: N36.94 billion), due to a -45.92 per cent drop in electronic banking income.

The bank raised significant proportion of its interest income from term loans which grew 59.90 per cent to N74.73 billion in the first six months of this compared to N46.74 billion in the same period in 2016. There was also a whopping 456.06 per cent increase in its loans to and advances to bank to N1.47 billion (H1 2016: N264 million).

UBA boasts of one of the lowest non-performing loan (NPL) portfolio in the Nigerian banking industry, the bank made an impairment provision of N9.44 billion, which was 38.41 per cent higher than N6.82 billion it provided for in toxic loans in H1 2016.

The bank’s total assets grew 5.30 per cent to N3.69 trillion with loans and advances to customers increasing 3.65 per cent N1.56 trillion, while loans and advances to banks almost halved to N11.51 billion. On the other hand, the bank’s total liabilities upped 4.93 per cent to N3.21 trillion, following 28.01 per cent rise in deposits from banks to N139.63 billion, but a slight -1.49 per cent decline in deposits from customers to N2.45 trillion in H1 2017.

The Kennedy Uzoka-led bank is one of the few commercial lenders in Nigeria that has taken advantage of the African market as more than 18 per cent of its N42.43 billion profit for the period came from other African countries.

Its earnings per shares appreciated 22.5 per cent to N1.74 from N1.42 in nine months results

UBA share which traded for N4.45 as January 3, 2017 has gained 103 per cent to close at N9.06 per share at the close of Business Wednesday October 18, 2017.

Commenting on the results, Managing Director, Crane Securities Limited, Mr. Mike Ezeh believes the marginal improvement in the third quarter was a good indication of a strong year end result.

Its dividend history shows that the bank paid 10 kobo in 2010, 5 kobo in 2011, 50 kobo in 2013, 50 kobo in 2014 , 60 kobo in 2015 and 0.75 kobo in 2016.

The Bank had earlier paid an interim dividend of 20k to shareholders this year as investor are optimistic for better dividend package at the end of year 2017

The bank’s 19 subsidiaries, reportedly has contributed more than 28 per cent to the groups bottom line in 2015. The bank repeated that with a bolder step, increasing its subsidiary contribution to the bottomline to 30 per cent in 2016. In a depressed economy with very tight regulatory and fiscal regulatory authorities, the group’s foresight helped to cushion the sad effect.

FIVE YEAR PERFORMANCE

A critical assessment of the bank’s performance since August 2010 reveals that its profit has grown on a compound annual basis by 38.13 per cent; profit grew from N2.167 billion in 2010 to N47.475billion in 2010. Other relevant indicators also show that gross Earnings grew by 69 per cent from N157billion in 2010 to N265.5billion in 2016. Similarly, its total assets grew 113 per cent from N1.432trillion in 2010 to N3.056 trillion in 2016. Loans and advances to customers also grew by 168 per cent from N569.3billion in 2010 to N1.527 trillion in 2016.

 

Leave a comment

XHTML: You can use these html tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

Most Shared

Recent posts

  • Nigeria’s GDP rises 1.95%, non-oil sector accounts for 90.3%

    The oil sector’s contribution to Nigeria’s Gross Domestic Product, GDP remains below 10 per cent in Q1 figures of the nation’s GDP released by the National Bureau of Statistics in Abuja today. According to the NBS, the nation’s GDP grew by 1.95 per cent year-on-year- in real terms in the first quarter of 2018. Although […]

  • National healthcare delivery threatened as sector’s crises worsen

    . JOHESU strike is sheer blackmail – NMA  By BAYO OBAJEMU These are troubling times for the health sector beset by the panoply of problems, some of them of long-standing nature while others are offshoots of long years of neglect by the authorities. But the spectre of war drums that hovers over the sector now […]

  • Foreign CEOs take over Corporate Nigeria

    . They are trying to protect their interests – Experts  By AYOOLA OLAOLUWA Foreigners have taken over the management of most multinational companies in Nigeria, BusinessHallmark findings have revealed. A two-week survey conducted by BH in May 2018, which involved fifty top companies, show that twenty-eight of the companies are headed by expatriates, while only […]

  • UBA’s Uzoka steps out of the shadows

    By TESIM SHITTA-BEY United Bank for Africa (UBA) has had a chequered history of good times and bad times but with its blazing first quarter (Q1) 2018 results setting the tone for a new twist in the tale analysts have begun to take out calculators as they forecast the bank’s potential year-end earnings. With profit […]

  • Ikeja Hotels returns to Lagos bourse

    The Nigerian Stock Exchange (NSE) has given the management of Ikeja Hotels the approval to resume trading after reviewing the two-year suspension placed on the shares of the company on Nov. 10, 2016. According to a ‘facts behind the restructuring’ document released by Ms Tinuade Awe, NSE Executive Director Regulation, trading would commence on the […]

  • Pharmacist council begins recall of Codeine cough syrup

    The Pharmacists Council of Nigeria (PCN) says it has started recalling cough syrup containing Codeine from its stakeholders in compliance with Federal Government directive. The Registrar of PCN, Mr Elijah Mohammed, revealed this in an interview with the News Agency of Nigeria (NAN) on Saturday in Abuja. The Minister of Health, Prof. Isaac Adewole, had […]

  • N5bn fraud: Akingbola has case to answer – Supreme Court

    The Supreme Court on Friday ordered, Erastus Akingbola, to return to the Federal High Court, Lagos, to answer his alleged five billion Naira fraud charge. Akingbola is a former Managing Director of the defunct Intercontinental Bank Plc. Justice Tanko Muhammad, leading a five-man panel, affirmed the Feb. 20, 2015 judgment of the Court of Appeal […]

  • AMCON takes over Sen. Oduah’s assets

    The Asset Management Corporation of Nigeria (AMCON) has taken over Sea Petroleum Oil & Gas Ltd. and other assets belonging to Sen. Stella Oduah-Ogiemwonyi over an unpaid debt of about N20 billion. AMCON said the takeover followed an injunction granted by Justice M.S. Hassan of the Federal High Court, Lagos against Sea Petroleum Oil & […]

  • Not so sir, Army panel tells General TY Danjuma

    The Nigerian Army on Friday said allegations against it by retired Gen. T.Y Danjuma that it colluded with militia in Taraba and refused to protect the people were untrue. The Chief of Army Staff, Lt.-Gen. Tukur Buratai, made this known at a news conference in Abuja where he gave details of the findings of the […]

  • Total, Mobil oil top losers’ chart on NSE

    Total Nigeria Plc on Friday at the Nigerian Stock Exchange (NSE)  topped the losers’ chart, dropping by N9.80 to close at N212 per share, the News Agency of Nigeria (NAN)reports. Mobil Oil trailed with a loss of N7 to close at N181, while Dangote Cement was down by N3 to close at N245 per share. […]

  • Invest more in science education, academic tasks FG

    The Federal Government has been advised to increase its funding of the education sector if Nigeria is to become globally competitive. An academic at the Obafemi Awolowo University, Ile Ife in Osun State, Dr Babatunde Ogundare, gave the recommendation on Tuesday at the Faculty of Science Secondary Schools Quiz Competition held at the institution. Addressing […]

  • Timeline of Ebola virus since first known outbreak

    Following is a recap of past epidemics of Ebola as the Democratic Republic of Congo (DRC) battles a new outbreak of the deadly tropical disease: 1976: First known outbreak  Ebola was first identified in central Africa in 1976 and named after a river in northern Democratic Republic of Congo (DRC). It claimed 431 lives that […]

  • Crude prices hits above $80 since late 2014

    Benchmark oil contract Brent North Sea briefly surged above $80 a barrel Thursday, hitting its highest level since late 2014 and extending a recent run higher fuelled by tight supply concerns. European stock markets meanwhile rose as the euro weakened against the dollar, but Wall Street pulled back in early New York trading. Brent North […]

  • AfDB approves $100m to boost fertilizer production in Nigeria

    The African Development Bank (AfDB) says it has approved 100 million dollars senior loan to Nigerian firm, Indorama Eleme Fertilizer and Chemicals Limited, to support the production of Fertilizer in Nigeria. The Bank disclosed this in a statement, on Thursday adding that it would help the company’s plans to double its fertilizer production from 1.4 million […]

  • FG opens online portal for investors

    The Federal Government has launched an up-to-date online portal, `iGuide Nigeria’, containing necessary information and relevant data for willing investors. The Minister of Trade and Investment, Mr Okechukwu Enelamah, at the launch in Abuja on Thursday, said the portal would greatly improve the Ease of Doing Business in the country. The Permanent Secretary of the […]

  • Governors threaten NNPC over fuel subsidy

    National Economic Council (NEC), comprising the 36 State Governors in the country has threatened to take over the responsibility of subsidising petroleum products in their states based on consumption following the huge amount of money being spent by the NNPC as fuel subsidy payment annually. The Chairman of Governors’ Forum, Gov. Abdulazeez Yari of Zamfara […]