United Bank for Africa (UBA) Plc has released its third-quarter financial statement for the period ending September 30, 2021, revealing a 37 per cent increase in profit as gross earnings increased to N490.3 billion, up from N454.4 billion in the similar period of 2020.
The bank’s operating income increased by 13% year on year to finish at N331.7 billion in September 2021, up from N293.7 billion in the third quarter of 2020. The bank’s profit before tax increased to N123.4 billion from N90.4 billion at the end of the third quarter of 2020, according to the bank’s latest financials disclosed on the Nigerian Exchange yesterday.
Profit after tax climbed by 36% to N104.6 billion from N77.1 billion the previous year, resulting in a 19.2% annualised return on average equity for Q3 2021, compared to 16.4% in the same period of 2020.
Its balance sheet remained solid, with total assets of N8.3 trillion, up 8% from N7.7 trillion at the end of December 2020, and Customer Deposits growing to N6.1 trillion, up 7.2 per cent from N5.7 trillion at the end of the previous financial year.
The shareholders’ funds remained very strong at N798.3 billion, up 10.3% from N724.1 billion in December 2020, indicating a strong capacity for internal capital generation and growth.
Kennedy Uzoka, group managing director and chief executive of UBA Plc, commented on the results, saying, “once again, the bank has demonstrated resilience in delivering on its commitment to shareholders, stakeholders, and the investing public, as evidenced by the strong positive financial metrics recorded in the reporting period”.
Gross earning was up eight per cent to N490.3 billion in the nine months, mirroring the improvements seen in both the domestic and international economies as countries roll out vaccines, helping to return economic activities nearer to pre-pandemic levels.
“Similarly, our profit before tax was up by a record 37 per cent to N123.4 billion, with an annualised RoAE of 19.2 per cent, showing our renewed commitment to creating more value for our shareholders”, Uzoka explained.
The GMD stated that UBA’s prudent approach to risk management, as well as the efficacy of its digital-first customer-centric business strategy, assisted in maintaining loan growth in the double digits while still being able to moderate our costs during the period, adding that, through the help of digital-first strategy, they were able to increase the number of their gent network in the period by over 140 per cent, increasing the controlling stake in the market.
“Looking ahead, we believe our huge investments in digital business following lessons learned from the pandemic will continue to pay off in delivering significant growth opportunities across our business operations even as the economy quickly heals from the impact/effect of the pandemic,” Uzoka said.
“We will continue to be a bank holding company, leveraging our strong balance sheet and diverse customer base to provide (beyond our shareholders’ expectations) solid returns to our shareholders”.
Ugo Nwaghodoh, Group CFO, also shed more light on the bank’s financial performance and position, saying, “the performance reflects our progressive efforts in building on our robust balance sheet, strong customer base, and our people, in delivering impressive earnings. I am particularly pleased with the period’s 90bps reduction in Cost of Funds (CoF) from 3.2 per cent to 2.3 per cent”.
This was despite a 7.2 per cent increase in customer deposits to N6.1 trillion, demonstrating the Bank’s deliberate effort to substitute high-cost funds for low-cost deposits.
He noted that UBA has continued to optimize its digital banking offerings, which has paid off handsomely, as evidenced by a 50.4 per cent increase in electronic banking income to N41.9 billion.
“As we continue to pursue a cautious loan growth strategy in 2021, we have strategically maintained strong capital adequacy and liquidity ratios at 23.9% and 43.9% respectively, ensuring adequate buffer to withstand impending shocks and good headroom for growth and the Bank will sustain this growth momentum, to ensure we consistently deliver sustainable value to our valued stakeholders,” the GCFO explained.