UBA Bolsters Earnings, Profit Spikes 29% in Q1
It was a good start to the year as Pan African lender, United Bank for Africa (UBA) posts a 29% year-on-year increase in after tax profit, according to its latest unaudited financial statement submitted to the regulators.
UBA profit after tax printed at N53.59 billion in the first quarter of 2023, from N41.50 billion reported in the comparable period in 2022. Consequently, its earnings per share grew by 29% to N1.47 versus N1.14 reported in the comparable period.
Analysts said the expansion in the group’s EPS was buoyed by the impressive growth across the core and non-core income in the first quarter of 2023.
Specifically, income from core operations spiked by more than 53% year on year while non-core side delivered a 35.3% year-on-year growth.
Detail from the unaudited result shows that UBA group reported N191.88 billion as interest income, up by 53.4% year on year. The strong increase was driven by gains recorded across all the major lines.
Analysts noted that the group generated higher income from loans and advances to customers, investment securities, cash and bank balances, and loans and advances to banks.
In the period, UBA recorded a 79.7% growth in interest expense to N72.25 billion due to the higher cost incurred on deposits from financial institutions, borrowings, and deposits from customers.
Analysts at Cordros Capital attribute the higher expense incurred on deposits from customers to the increase in the bank’s deposits amidst deterioration in its current and saving accounts mix.
The unaudited statement showed that customers’ deposits spiked 10.5% from the beginning of the year to date to N8.65 trillion. The group CASA mix printed at 84.0% versus 85.1% at the year-end of 2022.
Also supporting earnings, non-interest income advanced during the period by 35.3% to N56.08 billion, driven by gains from investment securities, net fees and commission income, and FX trading.
In its financial scorecard, UBA reported that its operating income increased by 38.1% year on year to N168.68 billion.
The bank’s operating expenses closed higher by 38.2% year on year, triggered by the increasing regulatory costs and persistent inflationary pressures.
In Q1, UBA’s unaudited report showed that profit-before-tax grew by 38.0% to N61.37 billion. The group recorded a 29.1% growth in profit-after-tax, amid the higher income tax expense.
UBA group’s tax provisions grew by 160.5% year on year to N7.78 billion in the period. UBA Bolsters Earnings, Profit Spikes 29% in Q1
