The United Bank for Africa Plc presented its unaudited financials for the nine months ended September 30, 2022, with such highlights as a N115.629bn or 23.48% growth in gross earnings, which could not be replicated in the bottom-line, as net profit could only rise by 10.94%, following the sustained growth in interest and total operating incomes, as well as the net impairment charge during the period.
Gross earnings income stood at N607.978bn, up from N492.35bn in the corresponding period, the bulk of which was the interest income of N420.234bn, a rise from N343.709bn in the corresponding period of last year. Interest income for the period was driven by the N163.039bn from term loans, up from N142.247bn. Interest expense rose from N114.444bn to N137.721bn, with payments on deposits from banks amounted to N17.157bn from N6.726bn; while the lion’s share was payments on customer deposits of N99.229bn from N78.49bn. This left a net interest income of N282.513bn, compared to N229.265bn.
Fees and commission income improved from N110.982bn to N138.079bn, helped by the N18.406bn credit related fees and commission, which rose from N11.631bn; electronic banking income increased to N47.957bn from N41.914bn; funds transfer fee dropped from N7.816bn to N6.589bn; trade transactions income soared from N13.555bn to N23.88bn. Commissions on transactional services also dropped to N15.577bn from N17.402bn; among others. Fees and commission expense rose to N55.86bn from N43.064bn, lifted by the N45.72bn in electronic banking expense, which rose from N37.155bn; trade related expenses jumped to N7.612bn from N3.222bn; while funds transfer expense was flat at N2.528bn, compared to the previous N2.682bn; leaving net fee and commission income at N82.219bn from N67.918bn.
Net trading and foreign exchange income stood at N38.409bn from N27.329bn; after trading income from fixed income securities leaped from N8.241bn to N23.244bn; fixed income securities feted N40.774bn, against N35.555bn in the corresponding period of last year. Loss from foreign exchange trading dropped N2.999bn from N11.2bn; just as net fair value loss on derivatives grew from N5.267bn to N22.61bn. Other operating income rose to N11.256bn from N10.334bn driven by other income of N6.8bn from N7.208bn, as well as dividend income of N3.962bn, up from the previous N2.91bn. This brought total non-interest income to N131.884bn from N105.581bn; while operating income to N414.397bn, up from N334.846bn.
Net impairment charge on loans and receivables rose more than 100% from N6.567bn to N13.587bn, a bring down of which showed that impairment charge on customer loans rose significantly from N7.163bn to N15.691bn; while impairment charges on loans to banks stood at N1.379bn, from almost nil in the comparative period of 2021. The situation was helped by the N4.037bn write off on loans and advances, from N2.478bn; recoveries on loans written off dropped from N3.948bn to N2.457bn, among others. Net operating income after impairment loss on loans and receivables rose from N328.279bn in the first nine months of last years to N400.81bn.
Employee benefit expenses rose to N80.769bn from N66.492bn; depreciation and amortization inched from N16.304bn to N18.438bn; other operating expenses soared to N163.421bn from N123.217bn, with banking sector resolution cost accounting for N31.184bn from N27.821bn; coming behind the N34.877bn spent on fuel, repairs and maintenance, up from the previous N19.526bn. This resulted in total operating expenses of N262.628bn from N206.013bn.
Profit before tax, therefore rose to N138.493bn from N123.354bn; while the income tax expense of N22.451bn, from N18.252bn, left net profit for the period at N116.042bn, up from N104.597bn. This translated to Earnings per share of N3.27, up from N2.94 each in the comparative period of last year.
Total assets for the period stood at N9.22tr, compared to N8.445tr as of December 31, 2021, lifted mainly by customer loans and advances which rose from N2.68tr to N3.049tr; just as total liabilities increased to N8.51tr from N7.736tr at the end of last year, the bulk of which was the customer deposits that rose from N6.369tr to N7.028tr. Total equity was flat within the periods at N776.668bn from N776.174bn.