UBA’s expanding market share lifts profit after tax 437.8% to N378bn in H1’23

By Cynthia Ezekwe. 

United Bank for Africa (UBA) Plc, recorded a 437.8 per cent surge in profit after tax to  N404 billion, for the half year ended June 30, 2023, from N70.33 billion recorded in the same period  of 2022, driven by growth across key income areas and substantial progress in expanding market share from its subsidiaries in Africa and globally.

The  multinational pan-African financial services group, also reported a profit before tax of N404 billion, a 371 per cent increase compared to the N85.6 billion of half year 2022.  The jump in profitability  translated to an annualised return on average equity of 57.7 per cent as against 17.1 per cent the same period last year. .

According to UBA’s financials, the group recorded double and triple-digit growth across its major income lines, as it continued to show substantial progress in increasing the contribution and market share from its subsidiaries in Africa and globally.

Operating income grew by 206.6 per cent to N783.96 billion in June 2023, higher than N255.67 billion reported a year earlier.

UBA also delivered a 164 per cent growth in its gross earnings which rose to N981.78 billion as at June 2023, up from N372.36 billion recorded last year in June 2022.  Total assets continued a strong upward trajectory, rising above the N15 trillion mark, as it hit N15.38 trillion, representing a 41.7 per cent increase from N10.86 trillion recorded at the end of last year.

Customer deposits also rose sharply bt 42.4 per cent to N11.14 trillion in the period under review,  against N7.8 trillion recorded at the end of 2022.

On a similar note, shareholders’ funds increased to N1.712 trillion reflecting the group’s strong capacity for internal capital generation.

In line with the group’s culture of paying both interim and final cash dividends,

Meanwhile, UBA’s board of directors has approved an interim dividend of 50k per share from the retained earnings account as at 30 June 2023, which represents 150 per cent increase compared to N20k per share the prior year.

Business A.M gathered that the proposed interim dividend amounts to a pay-out ratio of 7.3 per cent from 2.9 per cent in the corresponding period of 2022.

According to UBA, the interim dividend will be subject to the deduction of appropriate withholding tax, which will be deducted at the time of payment.

Commenting on the company’s half year 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 noted further that the group 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.

 “The Group recorded strong double-digit growth in revenues and profits from its operations, the result also reflects the effect of sizable revaluation gains, arising from the harmonisation of currency exchange rates in Nigeria. Our reporting currency found a new exchange level at about N756 to 1$ as of 30 June 2023, compared to N465 at the beginning of the year. The results again demonstrate the benefits of our long-held diversification strategy across Africa and globally.  The growth of our international business, most recently in the UAE, only reinforces this earnings quality,’’ Alawuba said.

The UBA CEO  stated that the  business is set on a steady growth trajectory,underpinned by sustained risk management traditions and technology investments aimed at  delivering premium service to our customers.

On the plans for the rest of the year, Alawuba noted that  as the last quarter of the year draws close, the group remains strategically positioned to sustain the strong performance, consolidating on H1 2023 results, to deliver superior returns to its esteemed shareholders.