Africa’s global bank, the United Bank for Africa (UBA) delivered a strong performance across major indices as gross earnings rose from N183.90 billion in the first quarter of 2022 to N271.20 billion, representing 47.5 per cent gross earnings growth in the first quarter of 2023.
The first quarter financials, filed by the bank on the floor of the Nigerian Exchange Limited (NGX), showed that the bank recorded significant growth across all indices despite the highly challenging global economic and business environment.
Notably, the bank’s profit before tax (PBT) rose 37.97 per cent to close the quarter under review at N61.37 billion, from N44.48 billion recorded in the first quarter of 2022. The growth in pre-tax profits was due to the increase in interest income boosted by loans and advances to customers and banks, investments in treasury bills, and bonds among others.
UBA outsmarts volatile environment to grow PAT by 36% to N60.6bn in H1Profit after tax (PAT) also increased by 29.16 per cent to N53.59 billion in Q1 2023, compared to N41.49 billion recorded in the corresponding quarter of 2022.
Commenting on the result, UBA’s Group Managing Director/ Chief Executive Officer, Mr. Oliver Alawuba, explained that despite the high inflationary, and challenging global environment, UBA was able to leverage the uptick in interest rates and improved digital offerings, in growing funded and non-funded income, adding that he is particularly excited at the growth in PBT, which has helped to drive increased returns to shareholders, with a 22.6% Return on Average Equity (ROAE) compared to 19.7% recorded in December 2022.
“We have continued to record improved gains in our customer acquisition and retention strategies across our countries of presence, evident in the 10.5% growth in customer deposits to ₦8.6 trillion from ₦7.8 trillion at the end of 2022FY. This has enabled the Group drive increased loan growth and interest income, with loans to customers at ₦3.6 trillion, representing a year-to-date(YTD) increase of 5%. For 2023, we remain committed to improving the Group’s performance as we strategically position our entities to take advantage of emerging developments within their jurisdictions and across the globe. We will continue to deliver excellent rewards to our stakeholders,” Alawuba said.
Also speaking on the performance, UBA’s Executive Director, Finance and Risk, Ugo Nwaghodoh, said that the performance demonstrates the group’s resilience and commitment towards delivering value and enhancing the confidence of its customers, stakeholders and the wider public notwithstanding the competitive landscape and current global trend in the industry.
“The impressive performance of UBA Group in first quarter 2023 is hinged on its continuous improvement and growth in gross earnings and balance sheet size as gross earnings grew by 47.5% year-on-year to ₦271.2billion and total assets up by 4.6% to ₦11.4 trillion from ₦10.9 trillion as at December 2022, ” Nwaghodoh stated.
Continuing, he said, “The growth in gross earnings is on the strength of increase in both interest income and non-interest income while growth in total asset is attributable to increased deposits due to aggressive deposit mobilization drive that resulted in a 10.5% growth in customer deposit in the first quarter.”
On a similar trend, UBA’s interest income grew by 53.4 per cent year-on-year to N191.88 billion, driven by gains recorded across all the major lines. In nominal terms, the group generated higher income of 36.6 per cent from loans and advances to customers, investment securities gained 64.8 per cent, cash and bank balances appreciated 210.2 per cent, and loans and advances to banks increased 92.7 per cent year-on-year. The bank said the growth in the income lines was induced by a combination of the higher yield environment and the rise in the group’s interest-earning assets which rose 4.8 per cent year-to-date to N9.31 trillion.
Also supporting interest earnings, the bank’s non-interest income advanced during the period by 35.3% y/y to N56.08 billion, against N41.02 billion in the same period of 2022, driven by gains from investment securities, net fees and commission income, and FX trading. Consequently, operating income grew by 38.1 per cent year-on-year to N168.68 billion.
