UBA 2016 Third Quarter Profit Grows By 7.6 Percent

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United Bank of Africa Plc (UBA) released its nine month results for the period ended 30 September, 2016, with profit after tax increased by 7.6 percent to N52.269 billion, which is above N48,557 billion that was reported same period in 2015. Gross earnings also went up by 8.2 percent to N265,527 billion above N245,492 billion that was reported same period in 2015.

Profit before tax was up by 7.3 percent to N61,555 billion against N57,366 billion in 2015. Earnings per share grew by 4.4 percent to 1.50 kobo against 1.43 kobo in 2015. Net interest income increased by 61.4 percent a quarterly basis. The high interest rate environment post the July Monetary Policy Committee (MPC) rate hike is reflected in the result, with interest income and interest expense expanding by 44.0 percent quarter on quarter and 21.4 percent quarter on quarter respectively.

Kennedy Uzoka led UBA also recorded a 48.6 percent growth in its loan book and a 19.9 percent expansion in customer deposits. Analyst noted that the significant increases in net loans and customer deposits are likely to be as a result of the effect of the naira devaluation on foreign currency portions of loan and deposits.

Non-interest income increased by 9.0 percent year on year but slumped by 45.7 percent quarter on quarter following a significant drop in foreign currency derivative earnings to a loss of N1.4 billion, from a gain of N15.9 billion as at half year. Impairment charges increased by 68.6 percent year on year but fell by 60.6 percent quarter on quarter.

Operating expenses increased 7.6 percent year on year but increased by 17.5 percent quarter on quarter following increases in “personnel costs” and “other operating costs. ” Cost-to-income ratio (CIR) increased to 64.6 percent in the period under consideration from 63.1 percent as at second quarter of 2016.

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