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Five things to note from UBA’s 2022 financials

Five things to note from UBA’s 2022 financials

United Bank for Africa (UBA) reported 43.5 percent growth in profit after tax to N170.3 billion in 2022 on the back of 17.5 percent and 69.0 percent increase in interest income and non-interest revenue, findings by BusinessDay has shown.

The bank’s interest income grew 17.5 percent to N557.2 billion, net trading and foreign exchange income grew to N72.2 billion while net fee and commission income increased by 27 percent to N128 billion.

“We attribute the former to an elevated yield environment as management was able to reprice its interest-earning assets accordingly. The bank’s non-interest revenue was supported by an increase in trading income and net fee and commission income,” analysts at CardinalStone said in a note.

UBA’s Group shareholders’ funds rose to N922.1bn, as at December 2022, achieving a growth of 14.6 per cent, compared to the prior year.

The bank’s total assets rose by 27.2 per cent, crossing the N10tn mark, to close at N10.9tn in December 2022; up from N8.5tn in 2021.

Commenting on the result, UBA’s CEO, Oliver Alawuba, said notwithstanding the tight and challenging operating environment, the bank continued to deliver significant performance.

UBA’s executive director, finance and risk management, Ugo Nwaghodoh, said going by the recent performance, UBA remained on strong footing and was comfortably positioned to take on more opportunities in Nigeria, Africa and beyond.

Here are five takeaways from UBA’s latest financial books.

Impairments from Ghana slow profit

United Bank for Africa’s profit after tax rose to N170.3 billion in 2022 from N118.7 billion in 2021 which indicates 43.5 percent growth.

The bank recorded an N17.98 billion impairment charge on investment securities in 2022, which indicates a 129 percent year-on-year growth from N784 million in 2021.

“Included in the N17.98 billion impairment charge on investment securities was N17.28 billion impairment loss attributable to the group’s exposure in Ghana investment market which significantly lost its value due to Domestic Debt Exchange Programme launched by the Government of Ghana in December 5, 2022,” United Bank for Africa said in its financial statement.

CardinalStone said in a note that management noted that its Ghana exposures were through UBA Ghana (local bonds and Eurobonds), UBA UK (Eurobonds) and UBA New York (Eurobonds).

“Total impairment charges due to Ghana were N17.3 billion, which also comprised haircuts of 30.0 percent and 59.0 percent on its UBA New York and UBA UK holdings, respectively,” CardinalStone said.

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Net interest income

UBA

UBA’s net interest income grew 20 percent to N379.5 billion in 2022 from N316.7 billion in 2021, recording a 17.5 percent surge in interest income while interest expense grew by 13 percent.

The bank’s interest income grew 17.5 percent to N557.2 billion in 2022 from N474.3 billion in 2021, driven mainly by growth in interest income on investment securities.

However, the bank’s interest expense climbed 13 percent to N177.7 billion in 2022 from N157.6 billion in 2021.

Net fee and commission income

United Bank of Africa saw its net fee and commission hit N128.2 billion in 2022, indicating a 27 percent increase from N100.9 billion in 2021.

The bank’s fees and commission income rose to N210.5 billion in 2022, up 33 percent from N158.6 billion in 2021 while fees and commission expense rose 42.6 percent to N82.3 billion in 2022 from N57.7 billion in 2021.

UBA’s net trading and foreign exchange income grew to N72.2 billion, a 340 percent increase from N16.4 billion in 2021.

Loan and advances to customers

UBA’s loan and advances to customers grew 16.3 percent year on year to N3.14 trillion in 2022 from N2.7 trillion in 2021.

The bank’s loan and advances to customers hit N3.14 trillion, indicating the highest in five years. United Bank for Africa loans and advances to customers were at N2.55 trillion, N2.06 trillion and N1.72 trillion in 2020, 2019 and 2018 respectively.

Deposit from customers

United Bank for Africa’s customers deposited the sum of N7.8 trillion in the full year of 2022, 21.9 percent increase from N6.4 trillion in the full year of 2021.

“While customer deposits were up 22.9 percent year on year, interest expense on such deposits were up 25.3 percent year on year, pointing to a slight increase in funding costs,” analysts at CSL Stockbrokers Limited said in a note.