Connect with us

BUSINESS

UBA Grows Gross Earnings By 16%, Delivers 17% Return on Average Equity, Sustains Interim Dividend

Avatar

Published

on

Africa’s leading financial institution, United Bank for Africa Plc has announced its audited 2018 half-year financial results, showing strong growth across key performance metrics as well as a significant contribution from its African subsidiaries.

Despite declining yield environment in two core markets, Nigeria and Ghana, the pan Africa financial institution delivered double-digit growth in gross earnings, as it recorded a 16 percent year-on-year rise in top-line to N258 billion, compared to N223 billion recorded in the corresponding period of 2017. This performance, according to analysts, underscores the capacity of the Group to deliver strong performance through economic cycles, even in a challenging business environment.

According to the report filed to the Nigerian Stock Exchange on Wednesday, UBA, reported strong growth in operating income at N168.5 billion, compared to N161.8 billion in the first half of 2017, an increase of 4.1 percent. Notwithstanding the inflation-induced cost pressure in the period, UBA finished the first half of the year strongly, with a Profit Before Tax of N58.1 billion. The Profit After Tax also improved to N43.8 billion, a 3.4 percent growth compared to N42.3 billion achieved in the corresponding period of 2017. The first half of the year profit translated to the pre-tax and post-tax return on average equity of 23% and 17% respectively.

UBA’s foreign operations continue to grow in importance, contributing 40% of the Group’s profit, which according to analysts attests to the benefit of UBA’s pan-African strategy and reinforces the Bank’s objective of achieving 50 percent earnings contribution from offshore subsidiaries.

In the first six months of the year, the Bank’s Total Assets grew 4.9% to N4.27 trillion and Customer Deposits rose by 6.1 per cent to N2.90 trillion, compared to N2.73 trillion as at December 2017. This growth trajectory underlines UBA’s market share gain, as it increasingly wins customers through its re-engineered customer service and innovative digital offerings. The Group’s Shareholders’ Funds remained strong at N496.3 billion, even as implementation of IFRS 9 impacted the total equity of the bank and its peers.

In line with its culture of paying both interim and final cash dividend, the Board of Directors of UBA Plc declared an interim dividend of N0.20 per share for every ordinary share of N0.50 each held on the qualification date – Wednesday, September 05, 2018.

Commenting on the results, the Group Managing Director/CEO, United Bank for Africa Plc (UBA), Mr Kennedy Uzoka said: “Our performance in the first half the year reflects the resilience of our business model and strategies. Despite declining yields in two core markets, Nigeria and Ghana, we delivered double-digit growth in gross earnings. Our performance demonstrates the success of our digital banking initiatives and broader Customer-First strategies”

“We are integrating banking to our customers’ lifestyle, simplifying processes for routine transactions and driving financial inclusion by making banking services accessible and affordable. We are creating opportunities for wealth creation and economic progress, as we empower our customers through innovative platforms and solutions that support their personal and business growth. Our commitment to delivering excellent service is paying off, as we increasingly win a bigger share of customers’ wallet across our chosen markets. We won the highly coveted “Africa’s Best Digital Bank” Award by Euromoney, demonstrating our pioneering initiatives are being recognised with Leo, our digital banker having been name-checked by Mark Zuckerberg ” Uzoka said.

“Our enhanced asset-liability management strategies improved asset yield and grew interest income by 21% despite prevailing yield environment. Our re-engineered sales structure provided the impetus for renewed retail deposit growth. I am particularly pleased by the 24% year-to-date growth in retail savings and current account deposits, underpinning the increasing penetration of our digital offerings and the Group’s overarching goal of democratizing banking across Africa. We improved net interest margin to 7.4%in line with our 2018 target, notwithstanding strong competition for wholesale deposits and the impact of rising global interest rates on our foreign currency funding,” he concluded

Also speaking on UBA’s financial performance and position, the Group CFO, Ugo Nwaghodoh said; “We finished the first half of the year in a stronger position and we are optimistic on the future of our business. Amidst economic recovery and uncertainties in Nigeria, our largest market, we grew net interest income and operating income by 9.6% and 4.1% respectively. We doubled revenue from trade services and grew e-banking income by 24%, a testament to our market share gain, which is driven by innovative offerings. Our foreign operations contributed 40% of the Group’s profit, underlining the benefit of our Pan-African strategy.

“We sustained our asset quality, with a cost of risk at 0.8%. Whilst the loan book declined by 6.5% due to prepayments from some customers in Nigeria and Ghana, we grew the overall balance sheet by 5% in the first half of the year. The Group’s capital adequacy ratio of 23%, Bank’s liquidity ratio of 48% and a loan-to-deposit ratio of 57% all reinforce our capacity to grow, with ample headroom for risk asset creation,” Nwaghodoh said.

In recognition of UBA’s dominance in Africa’s digital banking space, UBA emerged the Best Institution in Digital Banking across Africa, courtesy of Euromoney. Earlier in the year, UBA launched Leo, an e-chat service using artificial intelligence to help customers execute transactions on Facebook, the first of its kind in Africa. The Bank is set to replicate the success of Leo on WhatsApp on September 1st, bringing convenience to its growing youthful customer base across Africa.

UBA is one of Africa’s leading banks with operations in 20 African countries. It also has a presence in the global financial centres; London, New York and Paris.

UBA provides banking services to more than 15 million customers globally, through diverse channels.

BUSINESS

Zenith Bank Sustains Market Dominance With Improved Profitability, Declares N57Billion PBT Q1 Unaudited Result

Gbemileke Ajayi

Published

on

In the first quarter ended 31 March 2019, Zenith Bank Group recorded improved numbers across key metrics, driven by a solid performance in all business segments.

This resulted in a Profit before Tax (PBT) of ₦57 billion, representing a 6% growth over the ₦54 billion achieved in the corresponding period in 2018.

The Group’s on-going commitment to cost optimization on the income statement and statement of financial position ensured earnings per share increased by 7% to ₦1.60 compared to Q1 2018.

The growth in net interest income and operating income by 23% and 1% respectively mitigated the decline in gross earnings. The effective management of cost-to-income ratio, cost of funds and cost of risk offset top-line declines to deliver an enhanced operating income in the period.

Our risk and asset quality continue to improve as cost of risk dropped significantly by 52% from 0.9% in the prior year to 0.4% for the period. This was achieved as impairment charges declined by 54%(₦2.5billion year on year reduction).

Our cost of funds also improved, declining by 25% from 4%in Q1 2018 to 3% at quarter-end. This was supported by a 22% decrease in interest expense of ₦10billion over the same period, affirming the Group’s robust treasury and liquidity management. Our prudent cost management led to a 5% decline in our cost-to-income ratio by 5% from 53.3% in 2018 to 50.9% in the period with an absolute reduction in operating expenses by ₦2.3 billion year-on-year.

The Group’s retail franchise continues to increase as retail deposits grew by N80bn between December 2018 and March 2019 representing a 9% growth notwithstanding the fact that total customer deposits dropped marginally by 3%. The drop in customer deposits was as a result of rebalancing of the deposit mix as expensive purchased deposits were forgone in favour of cheaper and stickier retail deposits.

The volume and value of transactions across our electronic and digital platforms continue to grow as new customers are being acquired. Our balance sheet continues to strengthen as liquidity ratio is at 66.7%, loan to deposit ratio closed at 43%, and capital adequacy ratio ended the period at 25% respectively and remain above the relevant regulatory thresholds as at 31 March 2019.

Going into the rest of the year and with improving economic fundamentals, we are confident of delivering value to all our stakeholders on our commitments even as we create more opportunities for businesses by supporting them through selective risk asset creation. We shall continue our investments in the retail segment of the market as we consolidate our leadership position in the corporate segment while maintaining a strong balance sheet.

Continue Reading

BUSINESS

GTBank Releases Q1 Unaudited Results, Reports Profit Before Tax Of N57.0Billion

Avatar

Published

on

Guaranty Trust Bank plc has released its unaudited Financial Results for the quarter ended March 31, 2019, to the Nigerian and London Stock Exchanges.

The Bank recorded positive performance across all financial metrics with gross earnings for the period growing by 1.2% to ₦110.3billion from ₦109.0billion posted in March 2018. Profit before tax improved to ₦57.0billion from ₦52.6billion recorded in the corresponding period of March 2018, representing a growth of 8.3%.

Customers’ deposits also rose by 6.0% to ₦2.410trillion in March 2019 from ₦2.274trillion in December 2018, whilst the Bank’s Loan book grew by 1.6% from ₦1.262trillion as at December 2018 to ₦1.282trillion in March 2019.

Balance sheet remained strong with the Bank closing the quarter ended March 31, 2019 with Total Assets of ₦3.556trillion and Shareholders’ Funds of ₦627.2Billion.

In terms of Assets quality, NPL ratio and Cost of Risk closed 7.03% and 0.05% in March 2019 from 7.30% and 0.34% in December 2018 respectively.

In addition, coverage for NPL stood at 90.12% while Full Impact Capital adequacy ratio remained very strong, closing at 22.25%. On the backdrop of this result, Post Tax Return on Equity (ROAE) and Return on Assets (ROAA) closed at 32.79% and 5.76% respectively. These indices are pointer to GTBank’s strategic positioning in Nigeria and other Countries where the Group operates.

Commenting on the first quarter results, the Managing Director/CEO of Guaranty Trust Bank plc, Mr Segun Agbaje, said; “Going into 2019, we knew that it would be a challenging year, but our strategy and unwavering focus on delivering value for our customers and shareholders continues to underpin our ability to consistently deliver solid results despite changing market variables. We carried on the momentum of the previous year, posting strong growth in earnings, effectively managing costs and leveraging our digital-first customer-centric strategy to deliver world-class services that are simple, cheap and easily accessible.”

He further stated that; “Whilst ensuring the long-term growth of our business is the greatest value that we can create for our communities, we are also leveraging our resources, expertise and network to help people thrive. That’s why, from April 28 to May 1, 2019, we are organizing the biggest food and drink festival in Africa to give small businesses in the food industry the platform, network and access to the markets that they need to grow.”

GTBank has continued to be best in class in terms of Profitability, Efficiency and Capital among Peers and other Financial Institutions in Nigeria. This is evidenced by its Earnings per Share of ₦1.74, Return on Equity (ROAE) of 32.79%, Cost to Income Ratio of 38.64% and Capital Adequacy of 22.25%.

These metrics are a testament to the efficient management of the Bank.

In recognition of the Bank’s bias for world class corporate governance standards, excellent service delivery and innovation, GTBank has been a recipient of numerous awards over the years.

Some of the Bank’s recent awards include 2018 Bank of the Year – Nigeria from the Banker Magazine and 2018 Best Banking Group and Best Retail Bank Nigeria from World Finance Magazine.

Continue Reading

BUSINESS

NOVA Merchant Bank Limited Rated Investment Grade by 2 Leading Rating Agencies

Gbemileke Ajayi

Published

on

In furtherance of its plans to scale its operation this year, NOVA Merchant Bank Limited, in yet another milestone, has received an investment grade rating from both Agusto & Co (Bbb) and Global Credit Ratings (BBB-).

The reasons given for the Bank’s rating include the strength of the Board and management team, robust capitalization, prudent risk profile, good asset quality, and strong liquidity.

This achievement follows the recent publication of the Bank’s financial results where it declared a profit after tax of N1.15bn for the year ended 31st of December 2018, an increase from N510.6m in 2017.

Anya Duroha, the Managing Director/CEO, commented “The award of investment grade ratings by two leading rating agencies is another significant milestone in the history of the Bank. It further assists us in our plans to scale up our operations this year and deliver value to our customers and all other stakeholders”.

Mr. Phillips Oduoza, the Chairman of NOVA Merchant Bank further noted “These ratings are further validation of the strength of the foundation which has been laid for the continued future success of the Bank. On behalf of the Board, I will like to commend the management team for all their effort in achieving this milestone debut rating record.”

NOVA Merchant Bank will continue to focus on delivering on its overarching philosophy of “New Thinking, New Opportunities” to sustainably grow its business as it seeks to assist its clients achieve their strategic objectives and re-establish merchant banking as a key economic driver in the country.

Continue Reading

Most Popular