UBA posts 26.8% jump in Q1 net profit, double-digit growth on income lines

The United Bank for Africa (UBA) Plc says its profit after tax (PAT) increased by 26.8 percent in the first quarter (Q1) for the period ended March 31, 2021.

The bank’s PAT jumped to N23.2 billion in Q1 2021 from N30.1 billion in the same period in 2020.

According to a statement from the bank, it also recorded a double-digit growth across most of its major income lines in period under review.

The tier-1 bank said between January and March, it recorded N40.6 billion, representing a 24 percent year-on-year growth in profit before tax compared with N32.7 billion recorded in the first quarter of 2020.

“Interestingly, UBA again sustained its strong profitability recording an annualised 20.5% Return on Average Equity (RoAE) compared to 19.9% in the same period of 2020,” the statement read.

“Driven by a year-on-year growth in interest income, UBA Group recorded another impressive 5.5% percent year-on-year growth in Gross Earnings to close at N155.4 billion for the three month period ending March 2021, compared to N147.2 billion recorded in the first three months of last year 2020.

“The bank’s total assets also rose by 2.5% to N7.9 trillion in the period under review, compared to N7.7 trillion recorded at the end of the 2020 financial year whilst shareholders’ funds grew to N762.4 billion up by 5.3% from N724.1 billion as at FY 2020.”

Reacting to the result, Kennedy Uzoka, group managing director of UBA, said the result reflects the bank’s capacity to grow earnings in a highly uncertain macroeconomic environment.

He expressed satisfaction with the bank’s performance, adding that its current capital and liquidity ratio have positioned the bank as it continues to support its customers across diverse sectors and markets, guided by prudent risk management practices.

Uzoka said the bank is committed to sustaining its performance through a customer driven approach for the rest of the year.

“This impressive 2021 Q1 results reflect the capacity of our business to sustainably grow earnings even in a highly uncertain macroeconomic environment,” he said.

“We remain upbeat on the macroeconomic outlook of the countries in which we operate, especially as the COVID-19 vaccine distribution gains traction globally, whilst commodity prices and currencies continue to stabilise. Our robust capital and liquidity positions have positioned us to continue to support our customers across diverse sectors and markets, guided by prudent risk management practices.

“The bank is making strong progress in Nigeria where our continuous market share and efficiency gains are translating into higher profits. We are committed to sustaining this strong start throughout the year, leveraging our customer-first (C-1st) philosophy and unparalleled execution to deliver even stronger returns to our esteemed shareholders in 2021 and beyond.”

Also commenting on the first quarter results, Ugo Nwaghodoh, UBA’s group chief finance officer, expressed confidence in the bank’s earning.

He said UBA will meet and surpass its target for the remaining three quarters of the year.

“I am particularly pleased with our annualised return on average equity of 20.5% and return on average asset of 2.0%, as these indices buttress our commitment to delivering sustainable value to our stakeholders,” he said.

“We continued to deploy our balance sheet efficiency and digital-led cost optimisation initiatives to achieve desired outcomes. Cost-to-income ratio improved by 200bps to 60.4% during the period, whilst cost of funds settled at 2.0%, a 130bps reduction from 3.3% in 2020Q1.

“We are confident on the strong prospect for earnings growth, particularly as we are better positioned to consolidate recent market share gains in Nigeria and other geographies where we operate. This result is a strong start for the year, and we are optimistic about sustaining the exciting performance throughout the year and beyond.”