UBA Plc’s African Arm Now Most Profitable With 56.22% Of N118.678bn Net Profit

Directors of the United Bank for Africa have recommended a final dividend of 80 kobo per share for the financial year ended December 31, 2021, for approval at the next annual general meeting, bringing total payout for the year to N1.00 from its Earnings Per Share of N3.39, from the previous 57 kobo paid from the EPS of N3.10 at the end of 2020.

The closure date for the register of members is March 21, following which only those who are shareholders as of March 18, qualify for the payment on April 7, 2022, same date as the Annual General Meeting.

A major highlight of the result is that UBA Group’s African business has become the most profitable for the second successive years, judging by the restated numbers for the year ended December 31, 2020. The African business accounted for N96.81bn or 63.24% and N66.714bn, or 56.21% of profit before and after tax respectively; compared to N70.52bn, or 55.42% and N54.672bn, or 51.92% restated for the prior year. The performance of the African arms, therefore, dwarfed the N57.274bn and N52.974bn respectively contributed by the Nigerian arm in the period under review; just as it did preceding year when the bank recorded N50.828bn and N54.672bn. The African arms also contributed N30.096bn of tax expenses, up from N15.848bn; compared to Nigeria’s N4.3bn, from N2.366bn.

According to the result, gross earnings rose to N658.291bn; up from N615.772bn, the bulk of which was the N372.778bn from the group’s Nigerian arm, as against N372.223bn; followed by the N275.499bn from the rest of Africa, from N227.452bn; while the rest of the world pooled N23.912bn, from N19.75bn. Interest income rose by 10.84% to N474.262bn from N427.862bn; interest expense dropped 6.44% from N168.395bn to N157.551bn, with parent arm accounting for N100.657bn; and the rest of Africa, N17.335bn. This resulted in Net Interest Income of N316.711bn, up 22.06%, compared to the previous N257.467bn.

Impairment charge for credit losses on loans dropped significantly from N22.443bn to N9.851bn; just as net impairment charge oh other financial assets fell from N4.566bn to N3.012bn; bringing net interest income after impairment on financial and non-financial instruments to N303.848bn, up from N232.458bn in the corresponding period of 2020.

Fees and commission income improved also from N126.943bn to N158.648bn; and expense from N44.335bn to N57.746bn, leaving net fee and commission income at N100.902bn, up from N82.608bn.

Net trading and foreign exchange income fell from N54.847bn to N16.385bn; other operating income rose to N8.996bn from N6.12bn; and employee benefit expenses increased to N93.244bn from N87.545bn. Depreciation and amortization rose from N20bn to N22.7bn; just as other operating expenses jumped to N163.062bn, from the previous year’s N142.297bn; resulting in a 20.29% growth in profit before income tax at N153.073bn, from N127.257bn. The almost 100% growth in income tax expense at N34.398bn from N18.095bn, following which profit after tax could only grow by 8.72% from N109.162bn, up from N118.678bn.

A further breakdown of the result by the reporting segment showed that corporate banking contributed N292.797bn and N92.725bn to gross earnings and net profit in the 2021 full-year; compared to N201.024bn and N62.319bn in the preceding year. It was followed by N241.991bn and N16.465bn from retail and commercial banking, as against N209.759bn and N25.626bn in 2020; while treasury and financial markets followed with N123.503bn and N30.323bn respectively, as against N204.959bn and N21.217bn previously.

Total assets for the period rose to N8.541tr from N7.693tr, boosted by customer loans and advances amounting to N2.68tr, up from N2.554tr; while total liabilities increased from N6.973tr to N7.736tr, buoyed by the N6.369tr customer deposits, which grew from N5.676tr; as total equity stood at N804.807bn from N719.546bn.