United Bank for Africa Plc has announced its audited half year financial results for the period ended June 2019, showing a 30 percent growth in Profit After Tax (PAT).
Board of directors for the company thus declared an interim dividend of N0.20 per share for every ordinary share of N0.50 each held by its shareholders.
The bank said the declaration is in line with its culture of paying both interim and final cash dividend.
According to a statement from the financial institution, the result showed impressive growth across key performance indices as well as a significant contribution from its African subsidiaries.
The lender noted that in spite of the increasingly unpredictable environment witnessed in some of its countries of operations, it succeeded in delivering double digit growth in its bottom lines.
Profit before tax rose by 21 percent to N70.3bn for the half year to June 2019, up from N58.1bn recorded in the similar period of 2018.
Likewise, the Profit after Tax also improved to N56.7 billion, a 29.6 percent growth compared to N43.8 billion achieved in the corresponding period of 2018.
The profit for the first half of the year, translated to an annualised return on average equity of 21.7 percent.
According to its results filed with the Nigerian Stock Exchange, UBA recorded a 14 percent year-on-year rise in top-line, with gross earnings of N293.7 billion, compared to N257.9 billion recorded in the corresponding period of 2018.
Analysts say that this result emphasises the capacity of the Group to deliver a strong performance through economic cycles in spite of the overall challenging business environment.
As at 30 June 2019, the Bank’s total assets grew by 4.8 percent crossing the N5 trillion mark to N5.10 trillion.
Customer Deposits also rose by 4.8 percent to N3.51 trillion, compared to N3.35 trillion as at December 2018. This growth trajectory underscores UBA’s 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 remained strong at N542.5 billion, reflecting its strong capacity for internal capital generation.
Commenting on the results, Kennedy Uzoma, the group managing director/CEO, United Bank for Africa Plc (UBA), said: “I am pleased with the half performance of the Group, having delivered 14 percent growth in gross earnings and 21 percent growth in profit before tax.
Despite the subdued yield environment in some of our large markets, we achieved a 9 percent growth in interest income and defended the net interest margin.
We also achieved a 39 percent 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 percent and 53 percent respectively. All these factors attest to the efficacy of our strategies and the resilience of our business model.”
He further stated “I am very optimistic that the ongoing Group-wide transformation program, will in the quarters ahead, enable the Bank deliver substantial operational efficiencies and best-in-class customer service, which will ultimately boost earnings. We sustained our asset quality with the NPL ratio down to 5.62 percent, from 6.45 percent as at 2018FY. We will continue to adopt best practice standards to grow and manage the portfolio in the quarters ahead.”
Also speaking on UBA’s results, Ugo Nwaghodoh the group CFO, said; “We had 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 percent of the profit before tax, whilst our recently repositioned UK business contributed 4 percent. 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 percent with our focus on balance sheet and operational efficiencies which should enable us deliver our medium term CIR target. Capital adequacy ratio increased to 28 percent from 23.6 percent in December 2018, providing a very strong buffer for asset growth,” he stated.