UBA sets new benchmark to emerge Nigeria’s most profitable bank in HI’23

By Onome Amuge

The United Bank of Africa (UBA) has emerged the most profitable bank in Nigeria so far in 2023 as its key financial metrics  and revenues from its operations  surpassed that of its counterparts in the banking industry, setting new benchmarks for profitability, resilience and expansion within the Nigerian banking space.

During the first half of the year, the Nigerian banking sector recorded significant growths in key financial indices, as the financial service institutions defied the challenging economic and regulatory headwinds to post impressive revenues to the delight of investors and shareholders alike.

The period under review saw Nigerian banks gain significant foreign exchange revaluation profits estimated at N1.7 trillion. This is attributed to the devaluation of the Naira following harmonisation of the currency exchange rate by the Central Bank of Nigeria.

Notably, UBA’s  profit-before-tax soared 371 per cent from N85.75 billion in the first half of 2022 to N404 billion in H2’23. Business A.M gathered that the figure is the highest pre-tax revenue generated by any of the country’s tier-one banks.

In comparison,Zenith Bank had a pre-tax profit of N350 billion,Guaranty Trust Holdings Company (GTCO) recorded N327.40 billion,First Bank’s profit before tax stood at N206 billion,while  Access Bank disclosed N167.6 billion pre-tax profit.

UBA also led in profit after tax revenue for the first half period ended June 30 2023, as it delivered a profit after tax of N378.23 billion. In the same period, Zenith Bank recorded N291.7 billion after-tax revenue, Access Bank had a profit after tax of N280.482 billion, GTCO’s profit after tax advanced to N280.48 billion,while First Bank’s Profit after tax  stod at N187.2 billion.

UBA attributed its strong financial performance to group profit contributions from the bank’s operations in 20 African countries including UBA America, UBA UK, UBA UAE, UBA France, reflecting the effectiveness of the lender’s global strategy and positioning as the financial intermediary for Africa and the rest of the World, while delivering on the ‘Elumelu strategy’.

Based on the significant increase in profit, shareholders’ funds increased to N1.712 trillion, reflecting the financial institution’s strong capacity for internal capital generation. In line with the Group’s culture of paying both interim and final cash dividends.

Thus, the board  approved an interim dividend of 50k per share compared to 20k last year, which represents an annualised interim dividend yield of 7.2 per cent.

Commenting on the financial performance, Oliver Alawuba, UBA’s group managing director/chief executive Officer, said the exceptional performance underscored the group’s commitment to consistently deliver value to its shareholders.

Alawuba added that the bank made progress in digital payments, retail penetration and also benefited from the effect of revaluation gains, arising from the harmonisation of foreign exchange rates at the different access windows in Nigeria.

According to the UBA chief, the results again demonstrate the benefits of the bank’s long-held diversification strategy across Africa and globally.