UBA grows profit by 32% to N91bn, declares 55kobo final dividend

United Bank for Africa (UBA) Plc has released its audited 2016 full year results, showing significant growth in gross earnings and profits, an attestation to its resilience, enhanced productivity and geographic diversification, as evident in the impressive contribution from its African subsidiaries.
The banking Group recorded an impressive 22 per cent growth in gross earnings to N384 billion as at December 2016 from a comparative figure of N315 billion recorded at the end of the 2015 financial year, dousing concerns about the possible negative impact of the relatively low economic activity in Nigeria on the bank.
In addition to the opportunities in the high yield government securities, rising adoption of electronic banking channels and strong franchise, UBA was able to leverage its expansive geographical footprint in recording this impressive earnings growth.
As reflected in the results released on Friday at the Nigerian Stock Exchange (NSE), covering the period from January to December 2016, the Group witnessed a significant 32 per cent growth in profit before tax to N91 billion compared to N68 billion profit recorded over the same period of 2015.
In the same vein, UBA’s profit after tax grew by 21 per cent to N72 billion, from N60 billion recorded the previous year. Notably, the performance was buoyed by considerable growth in both interest and non-interest income.
Furthermore, UBA’s subsidiaries outside of Nigeria are increasingly gaining market share across the 18 African countries, thus reinforcing the strong and impressive subsidiary contribution to the Group, estimated at one-third of profit in 2016, from less than a quarter in 2015 financial year.
Following the impressive performance, the Board of Directors proposed a final dividend of 55kobo, subject to the approval of the shareholders.
The Bank had earlier paid an interim dividend of 20k to shareholders, bringing the total dividend for the 2016 financial year to N0.75, an unprecedented yield of 13.9per cent, based on the stock’s unit price of N5.40 on 23 March, 2017 on the floor of the NSE.
Commenting on the results, the bank’s Group Managing Director and Chief Executive Officer, Kennedy Uzoka expressed satisfaction at the resilience of the Bank, as reflected in the outstanding performance, despite the macroeconomic challenges in a number of countries where UBA operates.
“Considering the challenging operating environment, I am pleased with our profitability in the year; an impressive 32per cent growth in profit before tax to N91 billion. We improved on our cost-to-income ratio, closing the year at 63per cent, in line with our target.
Notably, the N72 billion post-tax profit translates to 19per cent return on average equity, which is broadly in line with our guidance for the 2016 financial year”, Uzoka said.
Speaking on its outlook for the 2017 financial year, Uzoka expressed optimism, as the bank’s pan-African operations increasingly gain critical mass across its chosen markets.
“As we further our Customer First Philosophy, we are approaching 2017 with stronger optimism, especially as the outlook remains positive in most of our markets. We are not unaware of the macro challenges, competition and constantly changing customer preferences. Rather, we believe we are well equipped to win in the market. We reiterate our pledge to delivering excellent service to our customers, as we remain committed to creating superior and sustainable return for our shareholders.”
Chief Financial Officer (CFO) of UBA Group, Ugo Nwaghodoh, said the bank extracted efficiency gains across its operations to boost profitability. He stated that the bank has seen significant improvement in key areas across all business lines, including a decent improvement in the net interest margin. “Our performance in 2016 reflects the strong potential and resilience of the business. We grew top and bottom lines by 22per cent and 32 per cent respectively, despite the stagflation in Nigeria, our core market,” the CFO noted.
He also expressed delight at the performance of the Group’s African subsidiaries (ex-Nigeria), which according to him, contributed a third of the profits recorded, adding that the bank will continue to leverage innovative offerings to grow its share of the respective markets. “As we diligently execute our Customer First initiative, I am particularly upbeat on the future of our business and the value creation for shareholders. We will further extract latent potentials, as we simultaneously mine new opportunities for growth,” he noted.