The board of United Bank for Africa Plc, on Thursday, presented its score-card for the half-year ended June 30, 2021, which should an improvement in key metrics, with gross earnings for the period rising to N315.326bn, from N300.257bn in the corresponding period of last year, while net profit stood at N60.581bn, against N44.431bn.
A major highlight of the result was the fact that although Nigeria continues to contribute the bulk of gross earnings, net profit from the group’s “rest of Africa” at N42.02bn, was double that of the home country’s N21.137bn, despite the income tax of N14.078bn and N1.527bn respectively. Earnings and profit from the “rest of the world” stood at N9.616bn and N3.751bn.
In the 2020 half-year also, gross earnings from the Nigerian business stood at N189.608bn, followed by N107.203bn from the rest of Africa and N9.219bn from the rest of the world; net profit from the rest of Africa, however, took the lead also, contributing N28.023bn, also double the N14.693bn from Nigeria and representing 63.07%; while the rest of the world contributed N2.712bn. This was despite income tax expenses of N7.619bn and N5.079bn respectively.
A further breakdown of the earnings showed that the retail and commercial business contributed N156.942bn, down from the previous N184.766bn; followed by the corporate business’ N88.296bn, representing an improvement over the N55.25=86bn of 2020H1; while treasury and financial markets accounted for N70.088bn, up from N60.223bn. The corporate business, however, drove the net profit line, contributing N31.827bn, after a tax of N6.723bn; followed by treasury and financial markets with N24.046bn net profit and N5.719bn tax expense; while retail and commercial reported N7.871bn net profit and N3.163bn tax expense.
The directors have therefore recommended a dividend per share of 20 kobo for the period, from its Earnings Per Share of N1.69; representing an improvement over previous half-year’s 14 kobo per share from the N1.24 EPS. Payment will be made electronically on September 30, to shareholders whose names appear on the register of members by close of business on September 23, 2021.
Specifically, interest income rose to N222.631bn from N205.586bn; and interest expenses drop from N86.262bn to N74.563bn; leaving net interest income at N148.068bn, compared with the previous N119.324bn, a drop in impairment charge for credit losses from N7.807bn in the first half of 2020 to N4.137bn, left net interest income after impairment charge of N143.931bn, up from N111.517bn.
Fee and commission income jumped to N74.085bn from N55.286bn, boosted by the N29.603bn earned from electronic banking services, which rose from N17.932bn; while expense equally leaped to N28.317bn from N17.286bn, driven by the growth in e-banking expenses from N14.512bn to N22.493bn. This resulted in net fee and commission income of N45.768bn, compared to N38.582bn in the prior half-year.
Net trading and foreign exchange income sagged from N35.208bn to N9.102bn, resulting from forex trading losses of N2.841bn and net fair value loss on derivatives of N5.266bn, against the income and gain of N7.997bn and N9.432bbn respectively in 2020; other operating income improved to N9.102bn from N3.595bn, helped by the N9.508bn generated as ‘other income’ from N819m; employee benefit expenses declined marginally from N44.565bn to N42.623bn; armotisation and depreciation increased to N11.457bn from N9.59bn. Other operating expenses stood at N78.753bn from N77.971bn, driven mainly by the N27.821bn contributed to the Asset Management Corporation of Nigeria (AMCON), as Banking Sector resolution cost, which rose from N22.417bn; while profit before tax, therefore stood at N76.186bn, from N57.129bn.
There was also an improvement in the bank’s balance sheet, with total assets growing from N7.697tr to N8.315tr, lifted by the customer loans and advances of N2.634tr, up from N2.554tr at the end of December 2020. Total liabilities equally grew to N7.562tr from N6.973tr, lifted by customer deposits that grew from B5.676tr in December 2020 to N6.095tr.
