UBA grows nine months profit by 33%, sees increased contributions from offshore subsidiaries

United Bank for Africa (UBA) Plc Monday announced its unaudited third quarter earnings results ended September 30, 2017, showing remarkable performance across key financial indicators with profit growth of 33 percent.

The banking group’s earnings grew by 26 percent to N333.9 billion, driven by strong performance in core revenue lines as against N265.5 billion reported in September 2016.

It also recorded an impressive profit before tax (PBT) of N78.3 billion, representing a significant growth of 33.2 percent as against N58.8 billion recorded in the similar period of 2016.

Operating income in the review period stood at N236.9 billion as against N183.3 billion recorded in the corresponding period of 2016, which represents a 29.3 percent growth.

In the same vein, profit after tax (PAT) grew to N60.9 billion or 23 percent growth over the N49.5 billion recorded in the corresponding period of 2016.

Total assets of the bank stood at N3.77 trillion as at September 30, representing a year-to-date (YTD) growth of 7.6 percent, while its loan book grew by 6.0 percent year-to-date to N1.6 trillion. Shareholders’ fund grew by 13.3 percent to N507.6 billion, whilst it delivered an annualized 18 percent return on average equity (RoAE).

According to a statement from the bank, the impressive performance defies the slow economic recovery in Nigeria as well as some African markets, where the bank operates just as it reflected its enhanced customer engagement in the review period.

Kennedy Uzoka, the group managing director/CEO, said, “These extremely positive third quarter results are an attestation of our ability to sustainably grow earnings and market share, notwithstanding the challenging operating environment. They are a tribute to our enhanced customer engagement and focus on continuous improvement in service quality.”

Uzoka equally stated that the bank’s investments in digital channels are being rewarded as its market share of digital banking continues to grow.

“We have also seen strong momentum in the trade and remittance businesses, where we have doubled the monthly run-rate in fee income, a testament to an increasingly optimistic business and currency environment,” he pointed out.

According to him, the slow, but steady, recovery in economic activities in Nigeria is presenting new opportunities for growth, particularly as improving foreign currency liquidity and the multiplier effect of rising public sector spending are stimulating economic activities.

“We continue to benefit from the strategic diversification of our business, with non-Nigerian business now contributing more than a third of revenues this quarter. These positive developments reinforce our constructive outlook on earnings and balance sheet growth for the last quarter of the year,” Uzoka said, adding that the bank would progressively deliver superior return to its shareholders, as it extracts new growth opportunities in its unique pan-African franchise.

Ugo Nwaghodoh, the bank’s group chief financial officer (CFO) reiterated that the group recorded strong growth across its diversified business segments and geographies.

“Our Africa operations (ex-Nigeria) again grew strongly in the period, contributing a third of top-line and approximately 40% of earnings. As we consistently gain market share in digital banking, remittance and trade flows, we are sustainably growing the non-funded income line, which currently represents 28% of our earnings,” he said.

He explained that whilst high domestic inflation, notably in Nigeria and Ghana, raised external cost pressures, alongside the lag impact of Naira devaluation, the bank remains focused on cost efficiency initiatives.

“I remain positive about our earnings outlook, as we complement our revenue drive with cost and operational efficiency gains,” he noted.

UBA was incorporated in Nigeria as a limited liability company after taking over the assets of the British and French Bank Limited who had been operating in Nigeria since 1949. The United Bank for Africa merged with Standard Trust Bank in 2005 and from a single country operation founded in 1949 in Nigeria – Africa’s largest economy – UBA has become one of the leading providers of banking and other financial services on the African continent.

It provides services to over 14 million customers globally, through one of the most diverse service channels in sub-Saharan Africa, with over 1,000 branches and customer touch points and robust online and mobile banking platforms.