United Bank for Africa Plc achieved double-digit growth in earnings and profits in the half year ended June 30, 2015, the bank’s results for the period showed.
Filed with the Nigerian Stock Exchange on Thursday, the results showed that UBA grew its earnings by 21 per cent from to N166.9bn in the first six months of this year, compared to the N138.2bn it earned in the same period of 2014.
The bank’s profit before tax rose by 35.1 per cent to N39bn, while its profit after tax soared by 40 per cent to N32bn within the same period.
In view of the performance, the bank has declared an interim dividend of 20 kobo per share.
The bank explained in a statement that during the period under review, it continued to benefit from its determination to provide value to its large customer base in Nigeria.
It said it also benefitted from its increasingly important pan African network, which contributed over 23 per cent of profit after tax, and its prudent management of costs and risk.
A review of the results, showed improvement in operational efficiency; with the bank’s net operating income rising by 21 per cent to N108.7bn in June 2015, as against N90bn in the corresponding period of 2014.
The bank’s focus on operational efficiency also resulted in a cost to income ratio of 64 per cent; as against 68 per cent in the same period in 2014.
According to the bank, which opted to have its half-year results audited in line with best practices in corporate governance, despite the increased economic challenges, it has continued to extend loans to support domestic Nigerian businesses.
The Group Managing Director/Chief Executive Officer, UBA, Mr. Phillips Oduoza, was quoted in a statement by the bank as saying, “In spite of a challenging operating environment, our business strategy has proved to be resilient, balancing prudence, with an ability to significantly grow bottom line and continue to focus on operating effectiveness.”
Oduoza added, “We delivered strong growth of 21 per cent in gross earnings and 40 per cent in profit after tax, reflecting better extraction of value across all business segments and our ongoing process optimisation. It was also satisfying to see our cost-to-income ratio decline further.
“We understand that many in Nigeria are facing difficult economic circumstances and we are very much shouldering our responsibility to support and grow wealth creation.”
In view of that, the UBA GMD said the bank looked forward to sustaining its support for customers and working with them to achieve financial success for them and the wider Nigerian and African economies.
The bank explained that it had been able to maintain a healthy loan book as a result of its risk management and the robustness of its clients’ businesses, with non-performing ratio at just 1.8 per cent of total loans granted – one of the lowest in the industry.
On the performance of the bank’s African subsidiaries, the Group Chief Financial Officer, Ugo Nwaghodoh, said, “Our business in Africa (ex-Nigeria) is beginning to significantly impact our returns, contributing 23 per cent of profit after tax, with an even stronger outlook.”
He added that recent initiatives taken by the bank to improve operational efficiencies were “yielding positive results, thus reinforcing our optimism on the future of UBA’s African business”.
Analysts at FBN Capital Research, who observed that the results were generally strong across the board, said the bank’s consensus full-year earnings forecasts were likely to be revised up due to the positive performance.
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Source : Punch