Interest income, retail deposit push UBA’s profit by 18% in Q1

United Bank for Africa recorded an 18 percent year-on-year profit in the first quarter of 2018 after recording growth in interest income and retail deposit.

According to the bank’s recently released unaudited Q1 report, the group recorded N26.6 billion in profit before tax compared to the N25.5 billion recorded in the same period in 2017.

It also recorded a N23.7 billion profit after tax as against the N22.4 billion recorded in the corresponding period in 2017 and an annualised 18 percent return on average equity (RoAE).

Following a sterling performance in the 2017 financial year, UBA Group delivered another impressive 18% percent year-on-year growth in gross earnings in the first three months of 2018.

“Driven by an 18 percent year-on-year growth in interest income, UBA Group recorded an 18 percent year-on-year growth in gross earnings to close at N119.4 billion for the three months period ending March 2018, compared to N101.2 billion recorded in the first three months of the year 2017,” a statement by the company read.

Commenting on the results, Kennedy Uzoka, Group managing director of the United Bank for Africa (UBA) Plc, said the bank maintained its performance despite “intensifying competition and moderation in yield environment in Nigeria and Ghana”.

“This set of first quarter result is a good start to the year and a reflection of our capacity to sustainably grow earnings over the medium to long term. We recorded 18 percent growth in gross earnings, as both interest and non-interest income grew 18 percent and 19 percent respectively,” Uzoka said.

“Notwithstanding the moderation in sovereign yield in Nigeria and Ghana, we achieved a 60bps improvement in net interest margin (NIM) to 7.6%, as we extract efficiency gains from balance sheet management

“I am particularly pleased with the eight percent year-to-date growth in our retail deposit, as it reflected the benefit of improved customer service and continued customer acquisition. We are committed to exceeding our 2018 deposit growth target in the year, with strategic focus on retail, low cost savings and current accounts, which is critical to sustaining our NIM uptrend.

“We are committed to responsible lending, as we seek to maintain our asset quality. We achieved a 40bps year-on-year savings in cost of risk, a reflection of the quality of our loan portfolio.”

He expressed confidence in the steady recovery of the Nigerian economy and improving fundamentals of most African countries, where the bank operates.

Uzoka emphasized the increasing relevance of its African operations to its bottom line, adding that, “Barring unforeseen circumstances, we look forward to sustaining this strong performance through the year, with the primary objective of delivering superior return to our shareholders.”

Also speaking on UBA’s financial performance and position, the Group CFO, Ugo Nwaghodoh, said management is committed to deliver the group’s 2018 financial goals.