The United Bank for Africa Plc posted a profit before tax of N40bn, gross earnings of N166bn and net operating income of N109bn for its audited 2016 half-year financial results for the period ended June 30, 2016.
The bank, in a statement, said it also recorded a significant growth in total assets, rising 20 per cent to N3.3tn, crossing the three trillion mark. Following the performance, the bank’s Board of Directors recommended the payment of N0.20 interim dividend on every ordinary share of N0.50 each.
Speaking on the results, the Group Managing Director/Chief Executive Officer, UBA Plc, Kennedy Uzoka, said the results were achieved amidst waning economic fundamentals.
“We delivered profit in excess of N40bn and grew balance sheet by 20 per cent, with our on-balance sheet total assets crossing the N3tn mark. Even as the naira depreciation and inflationary pressure increased the cost of doing business in Nigeria, we leveraged our economies of scale, enhanced operational efficiency and group-shared service structure to moderate our cost-to-income ratio by 90 basis points.”
The bank said its net loan position rose 29 per cent to N1.29tn, partially boosted by the depreciation in the value of the naira. UBA also recorded a significant 16 per cent growth in deposits to N2.41tn already surpassing the 15 per cent target growth in deposits set at the beginning of the year.
It also recorded a drop in cost to income ratio to 63 per cent as of half year compared to 64 per cent in the same period of 2015. “It is noteworthy that the bank maintained its strong asset quality, with non-performing loans ratio at 2.4 per cent; well below the Central Bank of Nigeria’s set limit of five per cent for the banking industry,” the statement explained.
Uzoka, therefore, said, “UBA will sustain its culture of keeping a healthy balance sheet, with strong liquidity and capitalisation, as reflected in the liquidity and Basel II capital adequacy ratios of 45 per cent and 18 per cent respectively.
“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 the bank’s performance, the Group Chief Financial Officer, 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.”
Nwaghodoh said that UBA’s performance in the period endorsed the bank’s resilience and ability to profitably grow its business from sustainable core banking offerings.
“Notwithstanding the challenging macro and regulatory environment, we achieved a 17.3 per cent return on average equity in the period,” he said, even as the total equity of the Bank grew 23 per cent to N407bn.
He explained that the bank’s African subsidiaries continue to record significant milestones in their performance, as two erstwhile loss-making subsidiaries are now profitable and having positive contribution to the bank’s bottom line.