UBA Plc 9-Month Profit Up 20%, Hits N81.63bn, on 38% Loan Loss Decline

The board of United Bank for Africa Plc, on Monday presented its unaudited score-card for the nine-month ended September 30, 2019, showing that net profit grew at a faster pace than earnings, helped in part by the N4.011bn or 37.57%.
According to the report presented to the Nigerian Stock Exchange (NSE), UBA Plc reported gross earnings of N428.22bn, an improvement of N53.39bn or 14.24% over the N374.83bn reported in the corresponding period of 2018.
Interest income for the period stood at N297.903bn, up by N28.966bn or 10.77% from N268.937bn; while interest expenses climbed from N118.239bn to N138.989bn; leaving net interest income at N158.914bn, compared to N150.698bn in the first nine months of the prior year.
Fee and commission income rose from N68.756bn to N86.53bn, rising by N17.774bn or 14.18% from N68.756bn, a breakdown of which showed that the bank earned N26.707bn from electronic banking, up by N6.759bn or 33.88% from N19.948bn in 2018; followed by credit-related fees and commissions of N13.494bn, an increase of 71.24% over the N7.88bn of the prior nine-month; just as commission on transactional services rose from N9.246bn to N13.393bn. Fee and commission expenses stood at N23.236bn, compared to N18.226bn, mainly driven by electronic banking expenses which rose from N15.643bn to N19.92bn; just as funds transfer expense soared from N114m to N2.334bn. These translated to net fee and commission income of N63.294bn, as against N50.53bn reported in the prior nine-month. Net trading and foreign exchange income for the period rose slightly from N32.401bn to N35.72bn, helped by the income of N19.572bn foreign exchange trading income, which rose from N17.242bn; fixed income securities trading earned N11.312bn from N5.363bn; among others.
Other operating income jumped from N4.735bn to N8.066bn, which was principally the N5.911bn dividend income, which rose from N2.986bn.
This left total non-interest income at N107.08bn, as against the previous N87.666bn, representing a growth of N19.414bn or 22.15%; resulting in an operating income of N265.994bn, up from N238.364bn. Net impairment loss on loans and receivables dropped from N10.674bn to N6.663bn; following which net operating income after impairment loss on loans and receivable rose from N227.69bn to N259.331bn. Further analysis of the figure showed that the group made N11.183bn allowance for credit losses on credit loss to customers, up from N10.183bn in the previous nine-month; N1.31bn was written-off loans and advances, down from N2.101bn. The management however recovered N3.273bn from loans previously written off, slightly lower than the Previous N3.682bn; while another N1.903bn was impairment reversal.
Total operating expenses increased from N149.085bn to N161.621bn, boosted by the N94.811bn other operating expenses, which rose from N87.221bn. Of this amount, banking sector resolution cost (paid to the Asset Management Corporation of Nigeria) climbed from N14.659bn to N19.992bn; fuel, repairs, and maintenance dropped slightly from N15.458bn to N14.836bn; occupancy and premises maintenance cost fell from N10.176bn to N9.37bn; among others.
Profit before tax rose by N19.122bn or 24.17% from N79.111bn in 2018 nine-month to N98.233bn; taxation charge dropped mildly to N16.605bn from N17.414bn; resulting in a net profit of N81.628bn, an improvement over the N61.698bn reported in 2018. This translated to Earnings Per Share of N2.32, up from N1.72 each.
Total assets for the period increased marginally from N4.869tr to N4.96tr, boosted by the N1.936tr customer loans and advances, which rose from N1.715tr; followed by the N1.242tr cash and bank balances, rising marginally from N1.22tr.
Total liabilities stood at N4.405tr from N4.367tr, the lion’s share of which was the N3.372tr customer deposits, compared to N3.349tr in 2018Q3; resulting in N536.533bn shareholders’ fund, up from N483.469tr.