United Bank for Africa Posts 36% Earnings Growth
Pan African lender, United Bank for Africa sees a surge in profitability in the third quarter of the financial year 2021 following a better than expected net operating income.
In its financial statement released to the Nigerian Exchange today, the Pan Africa lender profit for the 9-month financial year 2021 settled at about N105 billion, representing a 36% jump from N77.132 billion in the comparable period in 2020.
The result shows there was an improvement in interest income year on year while interest expenses moderated amidst a low-interest environment driven by the Central Bank pro-growth policy stance on the Nigerian economy.
Its net interest income printed at N229.265 billion, as against N186.022 billion recorded in a similar period last year, The slowdown observed in the group impairment charges for the period, dropping to N3.405 billion from the pandemic level of N11.476 billion amidst gradual economic recovery.
The bank’s profitability was driven by increased revenue as net interest and fees/commission income witnessed a significant jump but for a moderate rise in operating expenses.
Trended behind average inflation rate condition in the country, UBA’S operating expenses expanded by 7% to N206.013 billion in the last 12-month, from N192.659 billion recorded at the end of 9-months of the financial year 2020.
With increased activities level, UBA group total assets increased to N8.349 trillion from the beginning of the year to date, from N7.697 trillion as of the end of the financial year 2020.
This was majorly driven by an increase in the group interest yielding assets – to banks and customers in the period. UBA loans and advances to other banks jumped to N134.507 billion from N77.419 billion at the beginning of the year.
Similarly, loans to customers witnessed a significant jump, rising from N2.554 trillion at the beginning of the year to close at N2.872 trillion at the end of 9-month, 2021 result amidst the Central bank 65% loan to deposit target.
The increase in the Pan Africa bank interest yielding asset was made possible by sky-high jump customers’ deposits in the period. UBA deposits taken from customers increased to N6.084 trillion from N5.676 trillion in 9-month.
Meanwhile, deposits from other banks saw a moderate growth to N555.027 billion from N418.157 billion. It is observed that the board of directors’ lower interim dividend payout raised the bank retained earnings.
This resulted in improved shareholders’ funds as total equity rise to N798.279 billion in the period from N724.148 billion, propelled by growth in retained earnings and other reserves. #United Bank for Africa Posts 36% Earnings Growth
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