UBA posts N70.3bn profit in H1 2022 — up by 16%

The United Bank for Africa (UBA) says its gross profit rose to N85.7 billion in the first half of 2022, up from N76.2 billion recorded in the same period of 2021.

According to the audited financial results for the half year ended June 30, 2022, the figure represents a 12.6 percent appreciation in profit before tax.

The bank’s total assets “continued on an upward trajectory, increasing 5.4 percent to about N9 trillion”.

“Despite numerous business, economic as well as geopolitical environmental challenges including continued supply-chain interruptions due to COVID-19, the Russia and Ukraine conflict, and the resultant rise in prices of global commodities, that characterised the first six months of the year, the tier-1 lender delivered impressive numbers, with gross earnings hitting N372.4 billion, a solid 17.8 percent growth when compared with N316 billion that was posted the same period in the prior year,” the bank said in a statement.

“Operating income also grew by 20.1% to N256 billion in the period, while the firm’s profit after tax closed the first half stronger at N70.3 billion, up by 16.1 percent compared to the N60.6 billion same period in 2021.”

UBA said its loans and advances increased by 4 percent to N3 trillion; whilst deposits rose by 7.9 percent to N7.6 trillion at the end of the period.

Shareholders’ funds, however, declined marginally by 2 percent to N788.5 billion, owing mainly to the decline in its foreign operations translation reserve as well as fair value losses suffered from the investment securities valuation occasioned by the increasing interest rate regime across the globe.

With double-digit growth in PAT vis-à-vis the marginal decline in shareholder’s fund, the bank said its return on equity (RoE) closed the period stronger at 17.7%, whilst return on assets (RoA) came to 1.6%, up by 9 basis points.

The board also declared an interim dividend of 20 kobo per share for every ordinary share of N0.50 each held by its shareholders.

Commenting on the result, Oliver Alawuba, UBA’s group managing director/chief executive officer, said the stellar performance was in line with management’s expectations.

He added that the bank’s continued focus on its “customer-first philosophy” to pursue the mission of providing superior value to our stakeholders had increased low-cost customer deposits and boosted the growth of its payment and transaction banking.

“The financial year 2022 showed initial signs of recovery of economies across the globe, despite continued COVID-induced supply-chain disruptions,” Alawuba said.

“However, geopolitical challenges, including the Russia and Ukraine conflict, resulted in the escalation of global commodity prices, particularly that of grains and crude oil, which have taken a toll on several economies.

“Notwithstanding these developments, our half-year numbers came out stronger than the previous year, with top and bottom-line reaching new record highs.”

According to him, the group’s profitability increased by 12.6 percent to N85.7 billion, with double-digit growth recorded across key income lines.

He said the bank also recorded a decent 20 percent growth in net interest income as it continues to moderate the cost of funds whilst improving yield on assets, thereby contributing to the strong 20 percent growth in operating income.

“Our investments in state-of-the-art technology have continued to yield expected results and this is evident in the huge boost of our digital banking income, which grew 22.7% year-on-year to N36.3 billion,” he added.

“These gains have enabled us optimise net earnings amid the accelerating inflationary pressure, currency devaluation, and increased regulatory-driven costs.”