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United Bank for Africa (UBA) Plc, the pan Africa lender with presence across the continent, has recorded the fastest profit growth in a decade, as its consistent outstanding performance makes it appealing to value investors.
The Bank’s net profit surged by 166.10 percent to N142.58 billion as at March 2024 from N53.58 billion as at March 2023.
That compares with profit growth of 29.10 percent in 2023; 8.76 percent, 2022; 26.76 percent, 2021; 5.01 percent, 2020; 20.77 percent, 2019; 6.20 percent, 2018; 31.63 percent, 2017, 0.18 percent, 2016, and 37.74 percent in 2015, according to data gathered by MoneyCentral.
An upward repricing of yields in the loan book to pass on funding cost pressures and faster growth across all other income streams that helped tame any further expansion in cost served as tailwind to the Bank.
For instance, a 82.23 percent increase in foreign exchange gains to N23.69 billion and a 117.76 upsurge in fees and commissions income to N113.65 billion added impetus to the bottom line (profit).
A breakdown of fees and commission income shows electronic banking income spiked by 118.89 percent to N44.35 billion as at March 2024 while commission and transaction services were up 451.54 percent to N30.28 billion in the same period.
The growth in E-banking income is underpinned by the lender’s sustained emphasis on technology-led innovation and best customer experience
Through effective cost management and expansion in operating income, UBA recorded the lowest cost to income ratio among Nigeria lenders.
Taking advantage of the central bank’s aggressive monetary policy, the lender’s net interest income (NII) spiked by 155.13 percent to N300.67 billion.
Net interest income is defined as the difference between interest revenues and interest expenses.
UBA’s balance sheet witnessed an expansion as this growth reflects strong deposit traction and the impact of foreign currency revaluation. Total assets were up 17.76 percent to N25.36 trillion as at March 2024.
Analysts at Chapel Hill Denham Limited say the plans to roll out a special financing initiative through the company’s 3-year partnership programme with Africa Continental Free Trade Area (AfCFTA) is business accretive.
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