How UBA Defied gloom: Grows profits and stock value


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.


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.


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