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In Third Quarter Results, UBA Sees Fall in Profit

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United Bank for Africa (UBA) Plc has released its unaudited 2020 Third Quarter Financial Results, posting gross earnings of N454.4 billion, up from N428.7billion recorded in September 2019.

The bank reported a drop in Profit Before Tax, posting N90.4 billion which is less than the N98.2 billion recorded at the end of the third quarter of 2019. Similarly, the Bank recorded an after-tax net profit of N77.1 billion, thus putting its annualised return on average equity at 16.4%. Operating income also improved by 10.4% year-on-year to close at N293.7 billion, up from N265.9 billion achieved in the corresponding period of 2019.

UBA’s balance sheet showed total assets of N7.1 trillion, a 26% increase over the N5.6 trillion recorded at the end of December 2019. Customer Deposits grew from N3.8 trillion to N5.2trillion at the end of the last financial year. The shareholders’ funds remained very strong at N655.3 billion rising by 9.6% from N598.0 billion recorded in December 2019.

Commenting on the results, the Group Managing Director/CEO, UBA Plc, Kennedy Uzoka, said, “In spite of the current turbulence in the operating environment, occasioned by the global pandemic, we have continued to record significant progress in our business segments. Notably, our innovative financial inclusion propositions have helped us moderate cost-of-funds to 3.2% (4.0% in FY 2019), as low-cost deposits (which accounts for 76.2% of our customer deposits) grew 40.8% by the end of the third quarter. Our Direct Sales Agents, Agency Banking Network, and Digital Banking propositions have positioned us at the forefront of financial inclusion across geographies where we operate.”

Mr Uzoka said that UBA was able to provide support to customers across its footprint, assisting them to navigate the negative impact that Covid-19 pandemic has had on livelihoods, businesses and social life, adding that “since March 2020, we have provided transaction fee waivers to customers, rescheduled loans where business cashflows have been impacted, and donated generously to governments and communities to help catalyse a comprehensive pan-African response to the fight against the COVID-19 Pandemic.”

The bank’s chief executive was bullish on UBA’s future and said that “whilst the outlook for the rest of 2020 is expected to remain challenging, our diversified model provides sufficient resilience, enabling us to continue to delight our customers with innovative banking products within our robust risk management framework.”

UBA’s Group Chief Financial Officer Ugo Nwaghodoh said: “We achieved substantial growth in the underlying business, having grown loans by 15.6% (to N2.4trillion) and deposits by 35.7% (to N5.2trillion) within the period as interest and fee income from loans settled at N172.9 billion and N8.9billion respectively. Credit impairment charges increased by N4.8billion YoY (to N11.5billion), providing adequate reserve for impaired loans, which should help moderate the need for further reserves later in the year. NPL ratio and cost-of-risk settled at 5.2% (5.3% in 2019) and 0.64% (0.9% in 2019) respectively. As we deploy rigorous balance sheet management strategies to protect our margins, we will sustain cost discipline to push cost-to-income ratio to our desired sub-60% target in the short-term.”

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