Group Managing Director/Chief Executive of the United Bank for Africa Plc, Kennedy Uzoka, at the weekend, expressed satisfaction with the group’s performance for the half-year ended June 30, 2019, especially as profit before tax at 21% grew at a faster pace than the 14% growth in gross earnings.
Encouraged by such performance, he promised that the group could yet close with improved returns on investment at full-year aided by its ongoing transformation programme, as it continues to “deliver substantial operational efficiencies and best-in-class customer service, which will ultimately boost earnings.”
The hope for a juicier full-year for investors, he noted, is “despite the subdued yield environment in some of our large markets. We achieved a 9% growth in interest income and defended the net interest margin.”
Specifically, Uzoka according to a statement, the group “also achieved a 39% growth in our electronic banking revenues, as we broaden and deepened our digital banking play across Africa. Revenues from our remittance and funds transfer businesses grew 69% and 53% respectively. All these factors attest to the efficacy of our strategies and the resilience of our business model.
“We sustained our asset quality with the NPL (Non-Performing Loans) ratio down to 5.62%, from 6.45% as at 2018FY. We will continue to adopt best practice standards to grow and manage the portfolio in the quarters ahead.”
Also commenting on the score-card, UBA’s Group Chief Financial Officer, Ugo Nwaghodoh described the half-year as “a strong start in the year, given the prevailing macroeconomic environment across our various markets.
“There is better diversification in profit contribution as our banking subsidiaries across Africa contributed 38% of the profit before tax, whilst our recently repositioned UK business contributed 4%. We expect this dispersion to continue, as the subsidiaries consolidate on their share of the various markets.
“I am particularly delighted that the key ratios are trending in the right direction. The net interest margin is trending upwards and will continue to improve as we responsibly grow the risk asset portfolio and realign the funding mix to lower our cost of funds. The cost-to-income ratio trended down to 60% with our focus on balance sheet and operational efficiencies which should enable us to deliver our medium-term CIR target. Capital adequacy ratio increased to 28% from 23.6% in December 2018, providing a very strong buffer for asset growth,” he stated.
According to the audited half-year financial results, the group reported profit before tax as it rose by 21% to N70.3bn, up from N58.1bn recorded in the similar period of 2018, just as the Profit after Tax improved to N56.7bn, a 29.6% growth, compared to N43.8bn achieved in the corresponding period of 2018.
The profit for the first half of the year, in spite of the increasingly unpredictable environment witnessed in some of its countries of operations, the pan African financial institution delivered double-digit growth, translating to an annualised return on average equity of 21.7%.
Gross earnings stood at N293.7bn, compared to N257.9bn recorded in the corresponding period of 2018, just as total assets grew by 4.8%, crossing the N5tr mark to N5.1tr. Customer deposits climbed by 4.8% to N3.51tr, compared to N3.35tr as at December 2018, in what the group said underscores its market share gain, as it increasingly wins customers through its revitalized customer service culture coupled with innovative digital banking offerings. The bank’s Shareholders’ Funds stood at N542.5bn, reflecting its strong capacity for internal capital generation.
In line with its culture of paying both interim and final cash dividend, the Board of Directors of UBA Plc declared an interim dividend of N0.20 per share for every ordinary share of N0.50 each held by its shareholders.