UBA: Impressive performance in PBT, PAT, Assets, amid challenges in banking sector

By Philemon Adedeji

Despite numerous challenges in banking sector, A leading multinational pan-African financial institution, United Bank of Africa (UBA), has delivered a strong double digit growth in both  top and bottom line in its audited half year results ended June 30, 2022 released to the Nigerian Exchange Group (NGX).

The group maintained upward trajectory across all key indicators such as Profit Before Tax (PBT), Profit After Tax (PAT), Assets, and return on assets.

In the period under review, the group reported a significant increase in gross earnings among other financial parameter  to deliver double digit growth in profit.

On the impressive performance delivered, the board of Directors of United Bank of Africa (UBA) PLC declared an interim dividend of 20 kobo per share for every ordinary share of N0.50 each held by its shareholders.

The group reported a 17.8 per cent growth in gross earnings to N372.4 billion in half year H1 2022 from N316.036 billion achieved in the half year H1 2021, causing 20 per cent increase in net-interest income. The grow growth that occurred in gross earnings simply means the sales figure in H1 2022 grew far better than it did in the prior-year of 2021.

Net fee and commission income grew by 20 per cent to N177.5 billion in H1 2022 from N148.1 billion in H1 2021.

The group Profit Before Tax (PBT) stood at N85.749 billion in H1 2022, representing an improvement of a remarkable 12.6 per cent as against N76.2 billion recorded for the period of six months in 2021.

Profit After Tax (PAT), reported by the group for H1 2022 gained a 16.1 per cent to N70.334 billion in H1 2022 from N60.581 billion achieved in H1 2021.

Deposits from banks grew to N846.2 billion in six months of 2022 from N654.2 billion in FY 2021, reflecting a marginal difference of 29.3 per cent, while the rate of deposits from customers rose by 6 per cent to N6.7 billion in H1 2022 from N6.4 billion as of end of December 2021.

PROFITABILITY RATIOS

According to the analysis, it reveals that the group recorded profitability for the half year ended June 30, 2022, However when making comparison to its preceding year results almost all the parameters are seen on upward performance. Firstly to achieve profit margin of the bank dipped by 2.03 per cent in H1 2022 from N24.1 per cent in H1 2021. It means for every N100 earned by the bank in the course of the year N23.00 can be translated into to better profit lower than N24.10 in the corresponding year.

STRONG BALANCE SHEET POSITION

In the audited half year results, A leading pan-African financial institution recorded stronger total assets as growth total liabilities improved further.

The group total assets gained 5.4 per cent to N8.998 billion in H1 2022 from N8.541 billion achieved as at end of December 31, 2021 audited results and account for the period ended December 31, 2020. As total liabilities gained 6.13 per cent to N8.210 billion in six months of 2022 from N7.736 billion as at end of December 31, 2021, But total equity slightly declined by 2.03 per cent to N788.5 billion in six months of 2022 from N804.8 billion in FY 2021

UBA’s Group Managing Director/Chief Executive Officer, Oliver Alawuba, commenting on the result, said the stellar performance was in line with management’s expectation, adding that the Bank’s continued focus on its Customer 1st philosophy to pursue the mission of providing superior value to our stakeholders had increased low-cost customer deposits, and boosted the growth of its payment and transaction banking.

“The financial year 2022 showed initial signs of recovery of economies across the globe, despite continued COVID-induced supply-chain disruptions. However, geopolitical challenges including the Russia and Ukraine conflict, resulted in escalation of global commodity prices, particularly that of grains and crude oil, which have taken a toll on several economies.

“Notwithstanding these developments, our half-year numbers came out stronger than the previous year, with top and bottom-line reaching new record highs,” Alawuba said.

According to him, The Group’s profitability increased by 12.6 per cent to N85.7 billion, with double-digit growth recorded across key income line. The Bank also recorded a decent 20 per cent growth in net interest income as it continues to moderate cost of funds whilst improving yield  assets, there by contributing to the strong 20 per cent growth in operating income.

“Our investments in state-of-the-art technology has continued to yield expected results and this is evident in the huge boost of our digital banking income, which grew 22.7 per cent year-on-year to N36.3 billion. These gains have enabled us optimise net earnings amid the accelerating inflationary pressure, currency devaluation, and increased regulatory-driven costs,” he said.

Alawuba also noted that he is delighted at the strides made by the Bank in growing its market share across Africa.

In his words, “Our retail business has continued to grow as we ride on our agency banking network, trusted brand, competitive product offerings and quality service delivery, to deepen our retail penetration.”

He also commented on his recent appointment as Group Managing Director/Chief Executive Officer, alongside five other Group Executive Directors and assured the investing public of his relentless commitment to the growth of the business.

“Together, with our highly motivated workforce, we are poised to usher the business into a new era of growth that will deliver superior value to all stakeholders,” he said.

UBA is a leading pan-African financial institution, offering banking services to more than 37  million customers across 1,000 business offices and customer touch points in 20 African countries.

With presence in New York, London and Paris and now the UAE, UBA is connecting people and businesses across Africa through retail, commercial and corporate banking, innovative cross-border payments and remittances, trade finance and ancillary banking services.