UBA earns N166bn, makes N40bn profit

United Bank for Africa Plc has announced its audited 2016 Half Year Financial Results for the period ended 30 June 2016 showing gross earnings of N166 billion, net operating income of N109 billion and profit before tax of N40 billion.

The bank also recorded a significant growth in total assets, rising 20 per cent to N3.3 trillion, crossing the three trillion mark. Following the performance, the bank’s board recommended the payment of N0.20 interim dividend on every ordinary share of N0.50 each.

Speaking on the results, Kennedy Uzoka, the GMD/CEO, UBA Plc, said the results had been achieved amidst waning economic fundamentals.

“We delivered profit in excess of N40 billion and grew balance sheet by 20 per cent, with our on-balance sheet total assets crossing the N3 trillion mark. Even as Naira depreciation and inflationary pressure increased the cost of doing business in Nigeria, we leveraged our economics of scale, enhanced operational efficiency and Group shared service structure to moderate our cost-to-income ratio by 90bps.”

UBA achieved several strong positives in its performance for the half year. The bank’s net loan position rose 29 per cent to N1.29 trillion partially boosted by the depreciation in the value of the Naira.

The bank also recorded 16 per cent growth in deposits to N2.41 trillion already surpassing the 15 per cent target growth in deposits set at the beginning of the year. Another positive for UBA was a drop in cost to income ratio to 63 per cent as at half year compared to 64 per cent in same period of 2015.

UBA also maintained its strong asset quality, with non-performing loans ratio at 2.4 per cent well below the CBN set limit of 5 per cent.

Uzoka assured that; “UBA will sustain its culture of keeping a healthy balance sheet, with strong liquidity and capitalization, as reflected in the liquidity and BASEL II capital adequacy ratios of 45% and 18% respectively.” He further stated; “notwithstanding the current slowdown in economic activities, we see bright spots ahead, especially as we see strong prospect to grow market share across all chosen economies, through our enhanced dedication to customer service”.

Explaining the major drivers behind UBA’s strong performance, the Group CFO, Ugo Nwaghodoh said; “This impressive performance was driven by increased transaction volume, balance sheet growth and efficiency as well as a disciplined management of operating cost. We achieved a 60bps moderation in funding cost, despite the tighter interest rate environment, as we continue to improve our deposit mix, towards low cost savings and current accounts.”