The Pan African financial institution, United Bank
for Africa (UBA) has released its unaudited first quarter results, showing
significant growth across major income lines.
Following a
sterling performance in 2016 financial
year, UBA Group delivered another impressive 41% percent year-on-year growth in
profit-before-tax in the first three months of 2017. Leveraging on strong
growth in both interest and non-interest income as well as increased
efficiency, UBA recorded N25.5 billion in profit before tax in the first
quarter, ending March 31st 2017, compared to N18.1 billion achieved in the first
quarter of 2016.The Group also recorded a profit after tax of N22.4
billion in the first quarter, an impressive 32 percent year-on-year growth
compared to N17.0 billion achieved in the corresponding period of 2016. The
group sustained its strong profitability recording an annualized 19.4% Return
on Average equity(RoAE).
Driven by an unprecedented 43% year-on-year
growth in interest income, UBA Group recorded a 38% percent year-on-year growth
in gross earnings to close at N101.2 billion for
the three months period ending March 2017, compared to N73.7 billion recorded in the
first three months of the year 2016.
The Group Managing Director/CEO of the United Bank
for Africa Group (UBA), Mr. Kennedy Uzoka, expressed
satisfaction with the Bank’s impressive performance in the first quarter of 2017,
despite intensifying competition and a very challenging business
environment.
"Our performance in the first quarter of the
year strengthens our optimism on economic and business recovery in Nigeria and
many of our markets across Africa. More importantly, this result is evidence of
efficiency gains in our pricing, balance sheet management and
operations,” Uzoka said.
“Driven by our balance sheet liquidity, we grew
interest income by 43% to an unprecedented quarterly run-rate of N77 billion.
Buoyed by improving foreign currency supply in Nigeria, remittance and trade
services fees almost doubled and foreign currency trading income grew by 148%
year-on-year, as we leveraged our Customer First initiatives to gain market
share in these offerings. More so, it is my pleasure to report that we made
further progress in our consistent retail penetration, as reflected
in the 12% year-to-date growth in retail savings and current account deposits.
Notwithstanding the tight interest rate environment, we recorded a 30bps
reduction in cost of funds to 3.4%, a positive result of our customer
service-led approach to low cost deposit mobilization. As at Q1, low cost
savings and current accounts (CASA) represent 80% of our deposit funding,”
Uzoka explained.
While emphasizing the increasing
relevance of its African operations to its bottom line, Uzoka said, “Our
businesses outside Nigeria continued to wax stronger, contributing 35% of our
earnings. We remained prudent in risk asset creation growing net loans by 2%
year-to-date, as we have continued to monitor development in key sectors of the
economy to take advantage of emerging bankable opportunities in due time.
Albeit the structural challenges that exist in Africa, the opportunities and
returns are immense and compelling. We will deepen our penetration across our chosen
markets, as we diligently execute our strategies for consistent market share
gain.”
Also speaking on UBA’s financial performance and
position, the Group CFO, Ugo Nwaghodoh,said the Bank’s performance in the first quarter
further proves its resilience and verystrong
prospect of the business across itschosen markets. He said that beyond the
sterling growth in top and bottom lines, heremained particularly
impressed with the quality of the earnings, which reflects the bank’s focus
on the core business of financial intermediation and transaction banking.
“We remain steadfast on our prudent and proactive
risk management, which helps to minimize the impact of the macroeconomic
pressures on our portfolio. Our non-performing Loan ratio stood at 3.95%, with
a 136% provisions coverage, inclusive of regulatory risk reserve. We
remain well capitalized and liquid to fulfill our growth strategy; 19.4% BASEL
II capital adequacy ratio and 41% liquidity ratio, which present opportunity to
explore the headroom in our low LTD of 61%,” Nwaghodoh said.
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