UBA grows earnings to N454.4bn

UNITED Bank for Africa (UBA) Plc, the Pan African financial institution, has announced commendable performance in its unaudited 2020 Third Quarter Financial Results, with impressive growth in Gross Earnings, which rose to N454.4 billion, up from N428.7billion recorded in September 2019.

According to the report filed with the Nigerian Stock Exchange (NSE), UBA reported a Profit Before Tax of N90.4 billion compared to N98.2 billion recorded at the end of the third quarter of 2019. Similarly, the Bank recorded a Profit After Tax of N77.1 billion, thus putting its annualised return on average equity at 16.4 per cent. Operating income also improved by 10.4 per cent year-on-year to close at N293.7 billion, up from N265.9 billion achieved in the corresponding period of 2019.

Commenting on the results, the Group Managing Director/CEO, UBA Plc, Kennedy Uzoka, 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 per cent, as low-cost deposits, which accounts for 76.2 per cent of our customer deposits grew 40.8 per cent 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.

He pointed out 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 Covid-19 pandemic has had on livelihoods, businesses and social life, adding that “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.”

Speaking on the expectations for the rest of the year, Uzoka said, “whilst the outlook for the rest of 2020 is expected to remain challenging, our diversified model provides sufficient resilience, enabling us to continue to delight our customers with innovative banking products within our robust risk management framework.”

Also throwing more light on the Bank’s financial performance and position, the Group CFO, Ugo Nwaghodoh said: “we achieved substantial growth in the underlying business, having grown loans by 15.6 per cent to N2.4 trillion and deposits by 35.7 per cent to N5.2 trillion within the period as interest and fee income from loans settled at N172.9 billion and N8.9billion 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 per cent (5.3 per cent in FY 2019) and 0.64 per cent (0.9 per cent 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 per cent target in the short-term. The Group continues to target 15 per cent 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.

The Bank continues to maintain a very strong balance sheet, with Total Assets of N7.1 trillion, a 26 per cent increase over the N5.6 trillion recorded at the end of December 2019. UBA benefitted largely from its technology-led initiatives targeted at improving customer experience over the past few years.

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