By Dipo Olowookere
If the Yoruba saying that a fruitful Saturday is known from Friday is to be applied here, then the 2021 financial year of United Bank for Africa (UBA) Plc will be exciting.
This is because the lender, in its financial performance for the first quarter of this year, started the year on an impressive note with double-digit growth in its net profit.
In the results briefly analysed by Business Post, the post-tax profit increased by 26.9 per cent to 38.2 billion from N30.1 billion recorded in the first quarter of 2020.
The firm said its pre-tax profit was N40.6 billion in the period under consideration compared with N32.7 billion achieved in the same time of last year, while the earnings per share (EPS) jumped to N1.04 from 83 kobo a year ago.
On the top line of the results, the banking institution grew its gross earnings by 5.6 per cent to N155.4 billion from N147.2 billion, though the interest income slumped to N108.6 billion from N109.1 billion as a result of a significant decline in the income generated from investment in treasury bills (N19.0 billion versus N29.7 billion in Q1 2020) despite a jump in earnings from investment in bonds (N19.1 billion versus N11.0 billion).
In the period under consideration, the interest expense dropped to N34.2 billion from N43.7 billion due to a reduction in interest paid by UBA to customers for depositing their funds in the bank (N18.5 billion in contrast to N26.6 billion of the corresponding quarter in 2020).
This raised the net interest income higher to N74.4 billion from N65.4 billion as the fee and commission income jumped to N35.0 billion from N28.2 billion, with the fees and commission expense rising to N14.6 billion from N9.5 billion, leaving the net fee and commission income at N20.4 billion in the first three months of this year as against N18.7 billion in the same period of last year.
Also, the non-interest income of UBA increased to N32.3 billion from N28.5 billion, while the operating income improved to N104.6 billion from N91.3 billion.
However, the lender could not cut its operating expenses, which skyrocketed to N64.5 billion from N58.7 billion due to increases in banking sector resolution cost, deposit insurance premium, contract services, advertising, promotion and branding, printing, stationery and subscriptions, penalties, amongst others.
Adedapo Adesanya