The United Bank for Africa Plc (UBA) on Thursday released its audited half-year result after days of high expectation which led to a 20 kobo cash dividend per share, same as in the corresponding period of 2016 but with a 56.19% net profit rise.
The said audited half-year result of the UBA Plc on Thursday, which the directors offered a 20 kobo cash dividend per share, same as in the corresponding period of 2016 and 56.19% rise in net profit was faster than the 34.5% gross earnings growth, and despite the 98.61% increase in tax expenses. The management moved closer to achieving plans to de-risk the group, with earnings and profit from other parts of Africa (UBA Africa) rising to a significant 34%.
Gross earnings rose by N57.138bn or 34.5% to N222.718bn, from N165.58bn restated figure of half-year 2016, the bulk of which was the N154.954bn interest income, representing a rise of about N47.538bn or 44.25% from NN107.418bn. The lion’s share, about N151.979bn or 68.23% was earned in Nigeria, while the rest of Africa contributed N70.99bn or 31.87%. Interest expense climbed to N53.575bn, representing a N10.289bn or 23.76% from N43.286bn; resulting in N37.247bn or 58.07% increase in net interest income from N64.132bn in the first half of 2016 to N101.379bn. Impairment loss on loans and receivables increased to N9.441bn from N6.821bn; resulting in net interest income after impairment on loans and receivables of N91.938bn, which rose by N37.247bn or 58.07% from N57.311bn in 2016 to N91.938bn.
Fees and commission income was flat at N36.466bn from N36.936bn, as against the fees and commission expense, which climbed to N7.366bn from N6.098bn; net trading and foreign exchange income rose to N28.294bn from N19.637bn. Other operating income rose from N1.589bn to N3.004bn; employee benefit expenses also rose from N29.273bn to N33.958bn; just as depreciation and amortization crawled to N4.792bn from N4.065bn. Other operating expenses increased from N41.202bn to N56.054bn; following which profit before income tax jumped by N22.775bn or 65.52% to N57.531bn from N34.756bn in the corresponding period of 2016. Income tax expense soared by N7.543bn or 98.61% to N15.192bn; resulting in profit after tax of N42.339bn, up by N15.232bn or 56.19% from N27.107bn. Also, N25.599bn or 60.46% of the net profit was recorded in Nigeria, while the rest of Africa contributed N14.387bn or 33.98%.
Exchange differences on translation of foreign operations in the period fell to N7.694bn from N32.432bn; just as other comprehensive income for the period, net of tax also dropped from N56/161bn to N10.877bn; bringing total comprehensive income for the period to N53.216bn from N83.268bn in the corresponding period of 2016. Earnings per share rose to 121 kobo (based on 34.199bn shares) from 78 kobo (based on 36.28bn).
On the balance sheet, total assets rose to N3.69tr from N3.504tr, with customer loans and advances rising slightly to N1.56tr from N1.505tr; just as total liabilities increased from N3.056tr to N3.207tr, helped by customer deposits that crawled to N2.448tr from N2.485tr, while borrowings soared to N401.984bn from N259.927bn. Shareholders’ funds rose to N483.131bn from N448.069bn.
Further analysis of the result showed that corporate banking contributed N95.139bn or 42.71% of revenue; followed by N84.665bn or 38% from the retail and commercial banking segment; while treasury followed with N42.914bn or 19.26%.
The lion’s share of operating expenses or N76.945bn (about 85.48% of the N90.012bn total) was recorded by the retail and commercial business.
Corporate banking achieved a net profit of N24.04bn or 56.77% of total; followed by N10.176bn or 24.03% from treasury and financial markets’ business; while retail and commercial banking fetched N8.123bn.
In terms of loans and advances, corporate banking customers got N1.091tr or 69.44%; followed from afar by retail and commercial customers that got N336.632bn or 21.41%; just as retail and commercial banking contributed N1.922tr or 74.28% of deposits from customers and banks; ahead of corporate banking is 21.31%.