UBA’s performance in 5 key areas throughout first half-year: United Bank for Africa Plc (UBA), a leading Nigerian financial institution, just revealed its financial results for the first half of fiscal year 2023.
Results showed growth across major income groups and notable progress in growing market share globally and in Africa, according to analysis by BusinessDay.
After-tax profits for the bank was N378.2 billion in H1 2023, up 437.8 percent from the N70.33 billion recorded in the corresponding period in 2022.
Its pretax profit of N404 billion represented a 371% rise from the N85.6 billion reported previously. As a result, the return on average equity increased to 57% from 17% in the prior year.
According to Oliver Alawuba, UBA’s group managing director/chief executive officer, “the result also reflects the effect of sizable revaluation gains, arising from the harmonisation of currency exchange rates in Nigeria.” This growth was “strong double digits” for the group.
In a report released on Wednesday, analysts at Cordros Securities said that UBA’s H1 result was consistent with the earnings growth of its tier 1 rivals, which was bolstered principally by the foreign currency liberalisation adopted during the period.
Because of the combined effect of the increased interest rates and the devaluation of the naira in the period, “we envisage this strong earnings growth to remain by year-end,” they stated.
Highlights from the company’s statements are provided below.
Earnings from Important Tasks
After the Central Bank of Nigeria raised interest rates, UBA’s interest income from core businesses increased by N257.4 billion, or 66.4%, to N428.3 billion.
CSL Stockbrokers analysts attributed the expansion to gains in cash flow and interest from investments.
They noted that “interest income on investment securities and on cash and bank balances grew significantly,” accounting for the majority of the 66.4 percent year-on-year increase in UBA’s Interest Income to N428.3billion.
Earnings not from interest
The organisation saw a rise in its non-interest income of N505.9 billion, or 544.2 percent, from N78.5 billion.
Gains from currency revaluation (N29.2 billion), net fees and commissions (N78.3 billion), and trading in investment securities (N25.4 billion) all contributed to this expansion.
Money in the bank
From N960.8 billion, we see a rise to N1.1 trillion in liquid assets.
Net cash generated from operating activities drove this change, increasing by N2 trillion, or 320.8 percent, from N477.5 billion.
In H1’23, a negative cash flow of N1.9 trillion was reported as a result of net cash used in investment activities, while a positive cash flow of N215.2 billion was recorded as a result of net cash used in financing activities.
A accusation of impairment
The impairment charges increased dramatically, from N8.3 billion to N153.9 billion.
As a result, the annualised cost of risk in H1 rose to 7.7 percent, from 0.6 percent a year earlier.
CSL claims that the effect of devaluation on impairments connected to FX loans is responsible for some of the recent increase in impairment costs.
Profit for each share
Earnings per share at UBA increased dramatically, from N1.98 to N10.95.