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Nigeria’s UBA posts 6% growth in 9-month income to N454 billion

By on November 20, 2020 0 115 Views

United Bank for Africa (UBA) on Friday reported 5.99 percent growth in gross earnings for the first nine months of the year to N454.4 billion, up from N428.7 billion recorded in September 2019.

In a regulatory statement filed with the Nigerian Stock Exchange (NSE) on the third quarter and nine months performance, the bank said it recorded a Profit Before Tax of N90.4 billion in the first nine months of 2020 compared with N98.2 billion posted in the corresponding period of last year.

The bank also posted a profit after tax of N77.1 billion, thus putting its annualised return on average equity at 16.4 percent.

Its operating income also improved by 10.4 percent year-on-year to close at N293.7 billion, up from N265.9 billion achieved in the corresponding period of 2019.

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The Bank said it continues to maintain a very strong balance sheet, with Total Assets of N7.1 trillion, a 26 percent increase over the N5.6 trillion recorded at the end of December 2019.

The bank said it benefitted largely from its technology-led initiatives targeted at improving customer experience over the past few years, as Customer Deposits leaped to N5.2 trillion from N3.8 trillion at the end of the last financial year.

The shareholders’ funds remained very strong at N655.3 billion rising by 9.6% from N598.0 billion recorded in December 2019, thus reflecting a strong capacity for internal capital generation and growth.

Kennedy Uzoka, the bank group chief executive said, “In spite of the current turbulence in the operating environment, occasioned by the global pandemic, we have continued to record significant progress in our business segments.

“Notably, our innovative financial inclusion propositions have helped us moderate cost-of-funds to 3.2 percent (4.0 percent in FY 2019), as low-cost deposits (which accounts for 76.2 percent of our customer deposits) grew 40.8 percent by the end of the third quarter.

“Our Direct Sales Agents, Agency Banking Network, and Digital Banking propositions have positioned us at the forefront of financial inclusion across geographies where we operate,” Uzoka stated.

The CEO noted that during the period under review, the Bank was able to provide support to customers across its footprint, assisting them to navigate the negative impact that the Covid-19 pandemic on livelihoods, businesses and social life.

“Since March 2020, we have provided transaction fee waivers to customers, rescheduled loans where business cashflows have been impacted and donated generously to governments and communities to help catalyse a comprehensive pan-African response to the fight against the COVID-19 Pandemic.”

Uzoka said while the outlook for the rest of 2020 is expected to remain challenging, the bank diversified model provides sufficient resilience, enabling it to continue to delight its customers with innovative banking products within itsrobust risk management framework.

On his part, the Group CFO, Ugo Nwaghodoh said: “we achieved substantial growth in the underlying business, having grown loans by 15.6 percent to N2.4 trillion and deposits by 35.7 percent to N5.2trillion within the period as interest and fee income from loans settled at N172.9 billion and N8.9 billion respectively.

“Credit impairment charges increased by N4.8 billion YoY to N11.5billion, providing adequate reserve for impaired loans, which should help moderate the need for further reserves later in the year.

“NPL ratio and cost-of-risk settled at 5.2% (5.3% in FY 2019) and 0.64% (0.9% in FY 2019) respectively.

“As we deploy rigorous balance sheet management strategies to protect our margins, we will sustain cost discipline to push cost-to-income ratio to our desired sub-60% target in the short-term. The Group continues to target 15% loan growth, a NIM of >6.0% and ROE of >16% for the 2020 financial year, but targets remain subject to the evolution of the COVID-19 pandemic and its implications on the operating environment”, the GCFO explained.

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