United Bank for Africa (UBA) Plc’s consistent earnings growth in a tough operating environment has made the lender’s share price palatable to investors.
UBA’s stellar performance was underpinned by excellent risk management strategy, cost efficiency, and digitisation of processes to enhance the customer experience.
For the first three months through March 2017, UBA’s net income increased by 31.61 percent to N22.35 billion from N16.98 billion the previous year.
The growth at the bottom line was supported by foreign exchange income of N7.74 billion in the period under review.
The Nigerian lender is efficient while increasing profit as cost to income ratio fell to 60.68 percent in March 2017 from 63.16 percent the previous year.
Analysts are of the view that the decision of the central bank to let the market determine the exchange rate will ease the flow of dollars to UBA and other lenders that have been grappling with liquidity crisis and rising Non Performing Loans (NPLs).
The system — called the Investors’ and Exporters’ FX Window — is the central bank’s latest attempt to lure back traders who fled in the past two years.
Experts say that such a policy could woo foreign investor that had jettisoned naira assets because of a fret that the local currency could be devalued.
The bank’s share price gained 5.52 percent to close at N5.52 as of 2:00pm.
