UBA on Track to Meet FY2019 Target as Q3 Earnings Hit N428bn
**Credit Expansion, Others Buoy Non-Interest Income
By Modupe Gbadeyanka
The United Bank for Africa Plc this week released its financial statements for the nine months ended September 30, 2019 to the Nigerian Stock Exchange (NSE).
During the period under review, the company improved its gross earnings by 14.2 percent to N428.2 billion from N374.8 billion achieved in September 2018 and according to the Group Chief Financial Officer of UBA, Mr Ugo Nwaghodoh, this showed that “bank remains on track to deliver its earnings target for the [present financial] year.”
The lender, which boasts of a network that spans 20 African countries, the United Kingdom, the USA and France, grew its profit before tax by 24.2 percent to N98.2 billion from N79.1 billion in the same period of 2018, while the profit after tax significantly rose by 32.3 percent to N81.6 billion from N61.7 billion, leaving the company with an annualised return on average equity of 20.6 percent.
In the same period under consideration, the net operating income improved by 11.6 percent year-on-year to N266.0 billion from N238.4 billion achieved in the similar period of 2018, while it achieved a 22.1 percent growth in non-interest income, driven largely by the increased penetration of its superior digital banking offerings, credit expansion, remittances and other lifestyle transactional services.
Despite the double-digit inflation rate in Nigeria (its largest market) coupled with uncertainties in the business environment in the country, and in some countries in the rest of Africa, UBA’s curtailed operating expenses only increased by 8.4 percent and this was largely due to regulatory costs.
The financial institution continues to maintain a very strong balance sheet, with total assets of N4.96 trillion, an increase over the N4.87 trillion recorded in December 2018, while customer deposits increased to N3.37 trillion, with the shareholders’ fund remaining very strong at N555.53 billion, rising by 10.5 percent and reflecting a strong capacity for internal capital generation.
Group Managing Director/CEO of UBA Plc, Mr Kennedy Uzoka, while commenting on the results, stated that, “The resilience of our business model and our focused growth of earning assets have yielded a 10.8 percent growth in interest income.
“In addition to the commendable yield on interest earning assets, we also achieved a 22.1 percent growth in non-interest income, driven largely by the increased penetration of our superior digital banking offerings, credit expansion, remittances and other lifestyle transactional services.”
Commenting further, he said, “UBA remains committed to its vision of becoming the undisputed leading and dominant financial services institution in Africa.
“We will continue to innovate and lead in all our business segments, whilst delivering top-notch operational efficiencies and best-in-class customer service. We are beginning to realise early gains from our ongoing Transformation Program and I am indeed excited about the days ahead.”
Also throwing more light on the bank’s financial performance and position, the Group CFO, Mr Ugo Nwaghodoh, said “with the results achieved in the quarter under consideration, the bank remains on track to deliver its earnings target for the year.
“We were able to grow the loan book by 14.7 percent, (well ahead of our guidance) focusing on growth poles of various economies in which we operate.
“We have also developed new credit products targeted at specific consumer and SME market segments, and will continue to do so with strict adherence to best credit/underwriting standards, as we strive to achieve the statutory loan-to-funding ratio threshold set by the apex bank.”