UBA Plc defies headwinds and records N42 billion profit growth

Kennedy Uzoka

May 01 (THEWILL) – Despite intense headwinds impacting the economy in the last quarter (Q1 2022), Africa’s world bank, United Bank for Africa (UBA) Plc, performed subdued but impressive, signaling a positive outlook for the year as a whole. In the bank’s first quarter 2022 interim financial results released last week, the Tier 1 lender posted positive performance across key metrics that underscored the resilience and unyielding efficiency of its business practice.

The interim financial results revealed profit after tax (PAT) of N41.5 billion in the quarter compared to N38.2 billion recorded in the corresponding period of 2021, reflecting moderate growth of 8.7% . Profit before tax (PAT) was 44.5 billion naira compared to 40.6 billion naira, which shows an increase of 10%. Interest income increased by 15.2% to N125.0 billion from N108.6 billion for the corresponding period.

Notwithstanding the large total impairment provision of N4.1 billion (covering loans and receivables), which reflects an increase of 106.4% from the N2 billion authorized in the first quarter of 2021, the bank posted a net operating income of N121.7 billion versus N104 billion. 6 billion over the corresponding period, an increase of 16.4%. Loans and advances to customers recorded a positive increase of 7% from N2.68 trillion in the prior period to N2.86 trillion in the first quarter of 2022. This suggests the bank’s dependence on stimulus the economy through strong credit support to companies that operate mainly in the real sector.

Another snapshot showed the bank’s net income from fees and commissions increased by 19.30 percent to N24.30 billion year-on-year from N20.36 billion the previous year. Along with the growth trajectory that underlined the bank’s performance in the first quarter, the leading lender generated a total of N14.96 billion in net trading and foreign exchange income; which represents a growth of 42.89% from N10.47 billion for the comparable period of 2021.

The bank’s commitment to effectively applying technology has paid off. It raked in a total of 15.11 billion naira during the quarter, reflecting a growth of 21% from 12.48 billion naira in the corresponding period. It had spent 14.9 billion naira on online banking expenses in the first quarter of 2022 compared to 13.52 billion naira in the first quarter of 2021, an increase of 10.1%. Total interest income recorded an increase of 15.2% to N125.07 billion from N108.59 billion in the corresponding period.

The effective use of its electronic banking channels to provide superior financial services to its customers was also reflected in the 110% jump in business transactions revenue from N3.54 billion in the first quarter. 2021 at N7.42 billion during the reporting period. Earnings per share increased from 104 kobo to 114 kobo in the corresponding period, total assets which stood at 8.54 trillion naira in the first quarter of 2021 increased by 4.06% to 8 .88 trillion naira in the first quarter of 2022.

The inflationary trend which worsened in the first quarter was reflected in the bank’s operating expenses, which rose to N46.32 billion from N38.29 billion in the first quarter of 2022, showing an increase by 4.06%, with a 28% increase in the cost of “fuel, repairs and maintenance”. percent to 8.55 billion naira from 6.68 billion naira in the first quarter of 2021. Human capital formation and development gobbled up 905 million naira from 281 million in 2021 or 222.06 percent.

“The huge commitment to training and human capital shows that the bank is unwavering in its focus on human resource development which is critical to achieving the organizations vision and goals. Significant resources committed to human capital, online banking and IT-related spending by UBA in the first quarter of 2022 have rubbed off on the bank’s revenues and results. This is the way to go if she is determined to stay on top,” said HR specialist Rosemary Akhimien.

Nigeria’s inflation rate rose to 15.70% in February 2022 after falling the previous month, January, to 16.87% as the country faced fuel shortages that were a major contributor to the spike the prices. The National Bureau of Statistics announced that the increase in the consumer price index (CPI) between February 2021 and February 2022 was 15.70%, higher than the 15.70% recorded in January.

Nigeria has been facing fuel shortages since February after importing substandard fuel, leading to weeks of severe shortages and long queues at petrol stations. The shortage has led to increased transportation costs, thus affecting goods and commodities across the country. Inflation in March rose slightly to 15.9% from 15.7% in February. Many banks have reduced their working hours due to the high cost of diesel, the main source of energy used to run their operations.

UBA’s first quarter of 2022 was precipitated by its fiscal 2021 results for the period ended December 31, 2021. Tier 1 bank’s PBT increased 20.3% to 153.1 billion naira, down from 127.3 billion naira at the end of the previous year. Similarly, Profit After Tax (PAT) increased by 8.7% to N118.7 billion in 2021 from N109.2 billion recorded in 2020. The bank had also explained that the impressive result had been obtained in a context of enormous commercial difficulties and slow economic recovery in most of the countries in which its (subsidiaries) operate.

The lender’s gross revenue increased significantly to N660.2 billion, an increase of 7% from the N616.8 billion recorded at the end of fiscal 2020. Total assets also followed the growth trajectory, reaching an unprecedented increase of N8.5 trillion or 11% for the year under review, from N7.7 trillion in 2020.

Commenting on the result, Group Managing Director/CEO Kennedy Uzoka said that despite the tough and challenging operating environment, UBA continues to deliver significant performance, Uzoka explained that the quality of UBA’s portfolio, as well as the bank’s credit strength frameworks and risk management policies, remain the foundation of the positive results the bank has recorded over the years, adding that the year’s performance highlights UBA’s relentless customer focus and leverage on its key strategic levers – people, process and technology.

“Looking ahead, I am particularly excited about our ongoing business transformation program, which is designed to improve the bank’s process agility, service delivery and customer experience. We are also making significant investments in advanced technology and cybersecurity, to keep our innovative digital banking offerings above the curve, as we equip and revamp our human resources to compete and win in a rapidly changing landscape. . This will ensure that the bank continues to achieve respectable revenue and earnings growth over the medium to long term,” the GMD said.

The effect was the impressive financial results for the first quarter of 2022.