UBA boosts assets quality with $500m 5-year Eurobond redemption
UBA head office, Lagos

Okey Onyenweaku

UBA has once again shown consistency in posting strong performance in its first quarter ended March 2022 outlook. From a comfortable position in the year end 2021, the pan African institution has raked in N44.484 billion, representing 8.76 per cent over the N40.581billion in 2021. Its Net interest income advanced by 14.10% from N74.38 billion to N84.87 billion in the current period.

Market observers admit that the banks growth rode on the back of incomes from interest, trading income and fees and commission income, which all appreciated year on year. Details show that net income from fees and commission rose 19.30 per cent to N24.30billion from N20.366billion in 2021.

At the end of business in the first quarter, the bank also grew its deposits from customers by 4.47% to N6.65 trillion while its total assets are now put at N8.89 trillion. At the same time, Net assets rose 2.60% to N825.75 billion.

Total operating expenses grew 20.4 per cent from N64.545 billion in 2021 to N77.642billion in 2022, Earnings per share for the period was reported as N1.14, a 9.62% increase from the N1.04 reported a year earlier in 2021.

Overall, UBAs net operating income after impairments still appreciated by 16.33% to stand at N121.71 billion despite the 223 per cent spike in loan losses

To its credit, the bank harnessed and efficiently deployed its Electronic banking channel and raked in N15.11billion representing 21.04 per cent increase from N12.48million in Q1,2021.

UBAs Group Managing Director/Chief Executive Officer, Mr Kennedy Uzoka, explained that despite the myriad of economic challenges on the global front which shaped the first three months of the year, the banks business model continued to show resilience.

These challenges among others, he noted include the ongoing crisis between Russia and Ukraine that has resulted in a huge supply shock, pushing up commodity prices; and the hike in the interest rates in most advanced countries aimed at tackling spiralling inflation, which has however sparked capital flow reversal from emerging and frontier markets.

Notwithstanding these developments, we were able to leverage gains from our large customer base and vast geographical spread to bolster earnings. We recorded double-digit growth of 18 percent in our gross earnings to N183.9 billion, with our Nigerian operation raking in 65 percent of the revenue while our operations in other countries accounted for the remainder, showing the diversity in our operations, Uzoka said.

The GMD pointed out that amid the Great Resignation wave that has seen a record number of employees across the globe quit their jobs, disrupting the performance of many businesses, UBA, in the last quarter of 2021, thoughtfully reviewed upwards, the salaries of its staff as part of broad measures to retain talents, adding, We believe our staff is part of our success story with their welfare as a top priority.

The tier 1 bank had also impressed its shareholders with its end of year performance in 2021

At the end of the 2021 financial year, UBAs Profit Before Tax was impressive with a 20.3 percent growth to N153.1 billion, compared to N127.3 billion at the end of the 2020 financial year; while Profit After Tax rose grew by 8.7 percent to N118.7 billion in 2021, compared to N109.2 billion recorded the previous year.

As a result, the Bank proposed a final dividend of 80 kobo for every ordinary share of 50 kobo for the financial year ended December 31, 2021, bringing the total dividend for the year to N1.00 as the Bank had earlier paid an interim dividend of 20kobo.

In the last five years UBA has expanded in all measurement indicators. In the area of profit before tax, the bank posted a profit of about 50 per cent in the last five years from 2017 to 2021.

While its Profit Before tax grew from N104.2billion in 2017 to N106.76billion in 2018, N111.28billion in 2019, N127.25billion in 2020 and N153billion in 2021.

The lender (Company) has remained formidable in the midst of all odds.

In fact, the previous years its strong performances have also provided a sturdy base for the vigour and strength which the lender has displayed.

Analysts are bullish on the bank which has shown vigour and promise.

One significant thing about UBA is that it has long left its contemporaries behind and remained a leader.

UBA has paid dividend in 2021. I will take it from the historical perspective. UBA was one of the three old dominant banks and among them, I mean Union Bank and First bank have been seriously troubled to the point that they fallen down the pecking order. Union Bank and First Bank rubbing shoulders with the tire 2 and 3 banks .

But UBA has remained entrenched as a tier 1 bank. That shows that the bank is resolute and has continued to grow from strength to strength. For several years it has been bedeviled by the kind of challenges that have burdened the other banks.

Though it has its own internal problems. But it has been able to weather the storm. It has been able to do that because of the kind of re-invigorated leadership that one person has brought to the table and that is Tony Elumelu. Tony has kept that pedigree and has been able consolidate the bank, making a very vibrant and competitive brand.

Then their cross border expansion has added huge value to the bank. The bank is now entrenched in the international arena, I think for that bank the sky is its limit, especially now that there is AFCTA, the African continental trade area which will push most African countries to trade more among themselves. Most of those transactions will run through banks and UBA is one of the banks that is positioned to benefit from that trade, said Adonri

 

Key highlights of its results

§ The Nigerian lender earned N125.08 billion from its lending business as Interest income grew by 15.18% from N108.59 billion.

§ Despite a 223% spike in loan losses, net operating income after impairments still appreciated by 16.33% to stand at N121.71 billion.

§ The bank, however, grew its net income from fees and commission rising 19.30% to N24.30 billion year on year.

§ .

§ The bank also made Income from the disposal of property, dividends, rental, and cash handling, which raked in a total of N1.76 billion.

§ The banks Electronic banking income raked in N15.11 billion, representing a 21.04% increase from N12.48 million in Q1 2021, indicating that the bank has efficiently utilized its use of electronic banking channels to deliver financial services to its consumers.

§ Trade transactions income for the Q1 2022 period grew by 109.19% from N7.42 billion in the corresponding period of 2021 to N3.55 billion.

§ In addition, the bank also grew its deposits from customers by 4.47% to N6.65 trillion while its total assets are now N8.89 trillion. Net assets rose 2.60% to N825.75 billion.

United Bank for Africa Plc last traded at N8.10 per share and its market capitalization stood at N277.02 billion as of Tuesday, April 26, 2022. Year-to-date performance shows that the share price of the company has appreciated by 0.62%.

The bank recently paid a final dividend per share of N0.80 per share, to its eligible shareholders, for the period ended December 31, 2021. The dividend was paid to the shareholders on April 7, 2022.

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