Pan-African financial services provider, United Bank for Africa (Plc) recorded the biggest profit growth among peers in the first quarter of 2019, excluding Access Bank due to consolidation effect which skyrocketed profit by 86 percent, and First Bank, that is yet to release its Q1 results.
Net income for the bank grew by 21 percent to N28.66 billion from N23.74 billion in corresponding quarter of 2017. The result was on the back of a double digit growth in interest income on financial assets at fair value through profit or loss to N96.89 billion in the review period.
Net interest income which is the difference between the interest gained and interest paid by UBA rose 9.58 percent from N58.68 billion in the first quarter of 2018 to N53.55 billion in 2019.
UBA also saw significant improvement in its net fee and commission income which increased to N16.76 billion, 11.73 percent more than N14.996 it posted for first quarter 2018.
Despite an 8.76 percent decline in net trading and foreign exchange income, the bank’s other operating income increased at a faster rate to buoy the gains in net fee and commission, and grow UBA’s total net non-interest income by 7 percent in the quarter.
Net operating income after impairment loss on loans and receivables rose by 7.75 percent to N81.998 billion for the first three months of 2019, driven by a 7.94 increment in operating income while Net impairment loss on loans and receivables increased 17.88 percent with allowance from credit loss to customers and banks fuelling the uptick.
Total operating expense for the bank rose by 4.56 percent to N51.94 billion; however, profit before tax grew 13 percent to N30.17 billion in the first quarter of 2019 compared to N26.56 billion in the same period last year.
Owing to the bank’s ability to drive growth, its profit after tax surged 21 percent as UBA raked in N28.664 billion compared to N23.736 billion in first quarter 2018, consequently resulting 22.73 percent appreciation in earnings per share to 82 kobo in the review quarter.
Analysis of the lender’s balance sheet showed considerable improvement in total assets. UBA gained 4.73 percent value in aggregate assets to N5.11 trillion in the first three months of 2019 on the back of appreciation in cash & bank balance, investment securities and property & equipment.
The lender’s total liabilities settled at N4.57 trillion in the review quarter, indicating 4.58 percent increase over N4.37 trillion reported a year ago, triggered by elevated customer deposits, other and subordinated liabilities.
Shares of UBA gained 3.01 percent after Tuesday’s trading (April 23) to N6.80, outperforming the All Share index and NSE banking index that shed 0.03 percent and 0.44 percent respectively.
UBA is a financial services group in Sub-Saharan Africa with presence in Africa, United Kingdom, United States and France. The lender offers range of banking, pension fund custody and other financial services to customers in retail, corporate and commercial segments of African market.
Segun Adams & Israel Odubola
