• African Subsidiaries Contribute 31.7% To Earnings, 33% To Profit

Directors of the United Bank for Africa Plc, on Friday evening presented the group’s audited result for the year ended December 31, 2016, indicating that earnings grew by N68.803bn or 21.85%, and net profit by N12.61bn or 21.13% to N72.264bn, from N59.654bn.
The shareholders are expected to approve the recommendation of the board of a 55 kobo final dividend per share, when they meet at the Annual General Meeting on April 7. Payment of the dividend is slated for April 10, to those whose names appear on the register of members when it closes on April 3, 2017.
The result also showed over 30% contribution from the group’s African operation in terms of earnings and profit, from around 10%, a few years ago.
Details of the result show that gross earnings rose from N269.895bn in the corresponding period of 2015, to N383.647bn; with interest income contributing N263.97bn, as against the previous N177.
Interest income rose to N263.97bn from N229.629bn; and interest expense from N96.03bn to N98.77bn, leaving net interest income at N165.2bn, compared with the N133.599bn recorded in the 2015 financial year.
The group also reported net impairment loss on loans and receivables of N27.683bn, almost six times the previous year’s N5.053bn, leaving a net interest income after impairment on loans and receivables of N137.517bn, up from N128.546bn.
Fee and commission income rose from N61.892bn to N73.199bn; and fee and commission expense to N13.988bn from N8.557bn.
UBA also recorded a net trading and foreign exchange income of N43.82bn, more than double the previous year’s N20.366bn.
While employee benefit and expenses increased to N64.614bn from N57.446bn; other operating expenses stood at N79.237bn from N71.226bn; bringing profit before tax to N90.642bn from N68.454bn.
With income tax expenses jumping by almost N10bn, net profit for the year was N72.264bn, representing basic earnings per share of 204 kobo; from N59.654bn profit or 179 kobo EPS in 2015. The 55 kobo final dividend brings total payout for the year to 75 kobo, considering the 20 kobo interim dividend paid earlier, as against 60 kobo total payout in 2015.
The bank also reported exchange differences on translation of foreign operations of N38.96bn from a N1.937bn deficit in prior year; as well as net fair value gain of N28.114bn from N7.31bn; which brings other comprehensive income for the year to N138.15bn, up by N72.328bn or 109.88% from N65.822bn.
According to the balance sheet information, of the total assets of N3.504tr, up from N2.752tr in 2015, customer loans and advances rose to N1.505tr from N1.036tr. Total liabilities increased to N3.056tr from N2.42tr
A further breakdown of the report also showed that N255.404bn or 66.57% of the gross revenue came from UBA’s Nigerian operations, while N121.941bn was contributed from the rest of Africa, just as impairment loss recognized on profit of N24.626bn or 88.95% was also from the home front, and N8.499bn or 30.7% aggregated from the rest of the continent.
UBA Nigeria raked N47.236bn or 65.36% of profit after tax, and N24.323bn or 33.65% from its African operations.
However, the earnings and profit figures need to be improved upon, considering the fact that N2.601tr or 74.24% was deployed to its home country operations, leaving N1.144tr or 32.67% for the rest of Africa; which is similar to total liabilities of N2.229tr or 72.95% and N1.021tr or 33.41% respectively.
Revenue according to the bank’s various business segments shows that corporate banking contributed N146.863bn or 38.28%; followed by Retail and Commercial Banking with N163.838bn or 42.7%, while treasury and financial markets raked in N72.946bn or 19.01%. Retail and commercial banking segment contributed N121.857bn or 84.71% to UBA’s operating expenses for the year; and N15.382bn or 10.69% attributable to the Treasury and financial markets segment.
The lion’s share of net profit came from corporate banking- N37.868bn or 52.4%; followed by retail and commercial banking- N20.052bn or 27.74%; while treasury and financial market operations contributed N14.526bn or 20.1%.
The bulk of loans went to corporate banking customers, who got N1.115tr or 73.01% of total, after contributing N439.117bn; while N266.38bn or 17.43% went to retail and commercial clients, who pooled N1.971tr or 75.96%.