The board of the United Bank for Africa, on Monday, published its unaudited financials for the nine-month ended September 30, 2021, highlights of which included the 35.61% jump in net profit to N104.597bn, up from N77.132bn, despite a 1.81%% limp in gross earnings income, after interest expense dropped by 12.72% and a net impairment charge on financial assets recorded a 70.3% decline.
Gross earnings income for the period stood at N461.863bn from N453.67bn, boosted by interest income amounting to N343.709bn, up from N317.142bn; while interest expense dropped to N114.444bn from N131.12bn. Fee and commission income rose to N110.982bn from N85.011b, helped the growth in electronic banking income that rose from N27.867bn to N41.914bn; followed by the commissions on transactional services from N13.052bn to N17.402bn; credit-related fees and commission of N11.631bn, from N8.924bn. Fees and commission expenses grew to N43.064bn from N28.755bn, lifted by the N37.155bn e-banking expense that rose from N24.237bn. Net fee and commission income stood at N229.264bn, up from N186.022bn reported in the corresponding period of last year.
Net trading and foreign exchange income dropped from N45.721bn to N27.329bn, resulting from the N11.2bn foreign currency revaluation loss, compared to the previous N9.225bn gain; and N.267bn net fair value loss on derivatives that were enough to erode the impact of the N35.555bn income from foreign exchange trading, which improved from the previous N19.882b. Other operating income rose to N7.172bn from N5.796bn, helped by the N4.045bn earned from rental income, up from N2.711bn; which brought total non-interest income to N102.419bn, a drop from the previous N107.762bn.
Operating income for the period amounted to N331.684bn from N293.784bn; net impairment charge on financial assets dropped from N11.476bn to N3.405bn, representing a combination of improved risk management framework and recovery of loans previous tagged ‘lost and doubt.’ A breakdown of these figures according to the notes to the accounts showed that impairment charge on customer loans dropped to N7.163bn from N11.555bn; write-off of loans and advances dropped from N3.548bn to N2.478bn; while N7.11bn was recovered from loans previously written-off, from N2.702bn.
Net operating income after impairment loss on loans and receivables rose to N328.279bn from N282.308bn; employee benefit expense was flat at N66.492n, compared to N66.617bn in the same period of 2021,; depreciation and amortization rose to N16.304bn from N14.371bn; other operating expense stood at N123.217bn, against the N111.671bn of 2020 nine-month. Total operating expenses, therefore, stood at N206.013bn from N192.659bn; after which profit before tax improved from N90.372bn to N123.354bn; and tax expense from N13.24bn to N18.757bn. Net profit for the period, therefore, translated to Earnings Per Share of N2.94; up from N2.16 each.
The balance sheet also showed some improvement over the level in December last year, with total assets growing from N7.697tr to N8.349tr; boosted by the customer loans and advances of N2.872tr, which improved from N2.554tr in December 2020. Total liabilities improved to N7.551tr from N6.973tr; lifted by customer deposits amounting to N6.084tr, up from N5.676tr; following which shareholders’ funds rose from N695.068bn to N766.723bn.
