Improved forex supply aids UBA profit to 41% growth

The United Bank for Africa (UBA) says that its profit increased by 41% year-on-year profit before tax in the first quarter of 2017.

A statement by the bank attributed the growth to improved foreign currency supply as foreign currency trading income grew by 148% year-on-year.

UBA said it recorded a profit of N25.5 billion before tax in Q1 of 2017 and N22.4 billion profit after tax, compared to N17.0 billion in the same quarter of 2016.

“Our performance in the first quarter of the year strengthens our optimism on economic and business recovery in Nigeria and many of our markets across Africa. More importantly, this result is evidence of efficiency gains in our pricing, balance sheet management and operations,” Kennedy Uzoka, group managing director of the bank, said.

“Driven by our balance sheet liquidity, we grew interest income by 43% to an unprecedented quarterly run-rate of N77 billion. Buoyed by improving foreign currency supply in Nigeria, remittance and trade services fees almost doubled and foreign currency trading income grew by 148% year-on-year, as we leveraged our customer first initiatives to gain market share in these offerings.

“Our businesses outside Nigeria continued to wax stronger, contributing 35% of our earnings.

“It is my pleasure to report that we made further progress in our retail penetration, as reflected in the 12% year-to-date growth in retail savings and current account deposits.

“Notwithstanding the tight interest rate environment, we recorded a 30bps reduction in cost of funds to 3.4%, a positive result of our customer service-led approach to low cost deposit mobilization. As at Q1, low cost savings and current accounts (CASA) represent 80% of our deposit funding.”

Uzoka also said the bankable opportunities in Africa are immense and the bank will deepen penetration across chosen markets to execute strategies for market share gain.

Ugo Nwaghodoh, group chief financial officer, expressed satisfaction at the quality of earnings saying the bank’s performance proved its resilience and prospects for business.