UBA Bolsters Earnings Performance, Profit Rises 4.3%
Pan African financial service boutique, United Bank for Africa (UBA) Plc bolstered earnings performance in the financial year 2021 as profit inched up 4.3% year on year amidst a tough operating environment.
Due to a relatively healthier outturn amidst pressures in the banking sector, the group board of directors doubled down dividend payment to 80k per share in the financial year 2021, from 35k in the comparable period in 2020.
According to the group audited result, there was a 2.8% year on year growth in gross earnings, driven by an increased appetite for credit creation with moderate support from revenue from investment securities.
The group financials show that UBA Plc’s gross earnings printed at N651.75 billion, up from N634 billion in the pandemic year 2020.
The bank’s core income growth and lower funding costs attributed to an improved current account, savings account (CASA) supported its strong performance, analysts said in a commentary.
The Pan African financial services group after-tax profit inched higher 4.3% in the year to N118.68 billion from N113.77 billion in the comparable period last year.
This resulted in 9.4% earnings per share growth to N3.39 from N3.10 last year, according to the detail of the audited statement. The board of directors approved a final dividend of N0.80/share, a significant increase of 128.6% from N0.35 per share from the corresponding period last year.
Details from the audited result show that interest income recorded double-digit growth of 10.8% year on year to N472.26 billion propelled by all contributory lines.
The group’s audited financial statement shows that income from loans and advances to customers increased 11.9%, loans and advances to banks expanded 117.7%, investment securities grew 4.3% and cash with banks rose 5.2%.
Amidst low-interest rate environment, UBA interest expense declined by 6.4% to N157.55 billion driven by a 28.5% drop in the cost of borrowings to N32.54 billion.
UBA saw its non-interest income decline by 14.1% to N128.21 billion due to losses from FX revaluation and derivative contracts compared to the gains recorded in 2020.
In addition, FX trading gains fell 31.2% year on year and mark-to-market gains from trading investment securities dipped 6.6%. Analysts said the decline across these lines offset the robust growth in net fees and commission income which surged 18.6% to N45.77 billion.
In 2021, the group’s operating expenses increased by 11.7% as the balance sheet growth and increasing inflationary pressures drove most expense items higher. Regulatory charges for NDIC premium rose 38.5% year on year to N15.91 billion and AMCON levy jumped 21.0% to N27.98 billion.
Overall, profit-before-tax was 16.1% year on year higher at N153.07 billion but further weighed down by the higher income tax expense that increased 90.1% year on year to N34.40 billion. In the last 12-month, UBA group balance sheet size has inched up 11% to N8.541 trillion from N7.697 trillion in 2020.
#UBA Bolsters Earnings Performance, Profit Rises 4.3%
