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UBA Half-year Profit Rises by 65.5%

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  • UBA Half-year Profit Rises by 65.5%

United Bank for Africa Plc has recorded a significant rise of 65.5 per cent in its profit before tax for the audited half-year financial results ended June 30, 2017.

Its PBT for the period stood at N57.5bn as against N34.8bn posted in the corresponding period of 2016.

The pan-African financial institution, in a statement on Thursday, grew its gross earnings for the period by 34.5 per cent to N222.7bn, as against N165.6bn reported in June 2016.

The bank’s soaring business performance and increasing share of customers’ wallet were driven by the 44.3 per cent and 16.0 per cent growth in interest income and non-funded income, respectively. The group’s operating income stood at N161.8bn, compared to N116.2bn recorded in the corresponding period of 2016, representing a 39.2 per cent growth.

Notwithstanding the impact of naira devaluation and double-digit inflation in Nigeria and a number of other African countries where UBA operates, the group said it managed through its cost lines to deliver a sterling result and grow shareholders’ wealth.

In the same vein, the group recorded a profit after tax of N42.3bn, translating to a 56.2 per cent growth over the N27.1bn recorded in the half-year of 2016. This profitability, the statement explained, further reflected the earnings capacity of the group and its capability to progressively deliver superior returns to shareholders.

While the group closed the half year with total assets of N3.69tn, a growth of 5.3 per cent, it grew gross loans to N1.6tn, a four per cent growth when compared to the group loan book as at December 31, 2016.

Reflecting a strong capacity for internal capital generation, the group’s shareholders’ fund grew by eight per cent to N483.1bn, while it delivered an annualised 18.2 per cent return on average equity and an Interim dividend of N0.20 per share.

In his comments with respect to the result, the Group Managing Director/Chief Executive Officer UBA, Kennedy Uzoka, said that, “The results again demonstrate the strong momentum of the bank, as we deliver continuous improvement across our businesses and key performance metrics.”

Uzoka said the bank’s “unwavering focus on customer service excellence is translating to strong operational and financial efficiency gains. We have achieved better pricing on assets and liabilities, leading to continued improvement in the net interest margin to 7.3 per cent.

“Leveraging our service-focused strategy and treasury management, we grew non-interest income by 17 per cent year-on-year, reinforcing our transaction-banking-led approach towards deepening financial inclusion in sub-Saharan Africa.”

According to him, UBA has made considerable progress in its retail banking penetration, gaining market share in deposits, at a time when a sizeable percentage of households are challenged due to inflationary pressures on disposable income. The bank grew its retail savings and current account deposits by 23 per cent and five per cent year-to-date,respectively.

Also commenting, the bank’s Group Chief Financial Officer, Ugo Nwaghodoh, said the bank had “a strong start in the year, despite protracted recession in Nigeria, our largest market. Our profit after tax of N42bn translates to 18.2 per cent return on average equity, broadly in line with our 2017 full-year guidance.”

He further said that the bank’s African subsidiaries (ex-Nigeria) contributed 32 per cent of the group’s earnings, leveraging digital offerings to gain market share across the different markets.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Banking Sector

Peter Obaseki Retires as Chief Operating Officer of FCMB Group Plc

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The Board of Directors of FCMB Group Plc has announced the retirement of Mr. Peter Obaseki, the Chief Operating Officer of the financial institution, with effect from March 1, 2021. He was also an Executive Director of the Group.

His retirement was approved at a meeting of the Board of the Group on February 26, 2021. This has also been announced in a statement to the Nigerian Stock Exchange (NSE) by the financial institution.

The Chairman of FCMB Group Plc’s Board of Directors, Mr Oladipupo Jadesimi, thanked Mr. Obaseki for his valuable service and excellent support to the Board for many years.

FCMB Group Plc is a holding company divided along three business Groups; Commercial and Retail Banking (First City Monument Bank Limited, Credit Direct Limited, FCMB (UK) Limited and FCMB Microfinance Bank Limited); Investment Banking (FCMB Capital Markets Limited and CSL Stockbrokers Limited); as well as Asset & Wealth Management (FCMB Pensions Limited, FCMB Asset Management Limited and FCMB Trustees Limited).

The Group and its subsidiaries are leaders in their respective segments with strong fundamentals.

For more information about FCMB Group Plc, please visit www.fcmbgroup.com.

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Banking Sector

COVID-19: CBN Extends Loan Repayment by Another One Year

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Central Bank Extends One-Year Moratorium by 12 Months

The Central Bank of Nigeria (CBN) has extended the repayment of its discounted interest rate on intervention facility by another one-year following the expiration of the first 12 months moratorium approved on March 1, 2020.

The apex bank stated in a circular titled ‘Re: Regulatory forbearance for the restructuring of credit facilities of other financial institutions impacted by COVID-19’ and released on Wednesday to all financial institutions.

In the circular signed by Kelvin Amugo, the Director, Financial Policy and Regulation Department, CBN, the apex bank said the role-over of the moratorium on the facilities would be considered on a case by case basis.

The circular read, “The Central Bank of Nigeria reduced the interest rates on the CBN intervention facilities from nine per cent to five per cent per annum for one year effective March 1, 2020, as part of measures to mitigate the negative impact of COVID-19 pandemic on the Nigerian economy.

“Credit facilities, availed through participating banks and OFIs, were also granted a one-year moratorium on all principal payments with effect from March 1, 2020.

“Following the expiration of the above timelines, the CBN hereby approves as follows:

“The extension by another 12 months to February 28, 2022 of the discounted interest rate for the CBN intervention facilities.

“The role-over of the moratorium on the above facilities shall be considered on a case by case basis.”

It would be recalled that the apex bank reduced the interest rate on its intervention facility from nine percent to five percent and approved a 12-month moratorium in March 2020 to ease the negative impact of COVID-19 on businesses.

To further deepen economic recovery and stimulate growth, the apex bank has extended the one year-moratorium until February 28, 2022.

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Finance

MTN Nigeria Generates N1.35 Trillion in Revenue in 2020

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MTN Nigeria Grows Revenue by 15.1 Percent from N1.169 Trillion in 2019 to N1.35 Trillion in 2020

Despite the COVID-19 pandemic and challenging business environment, MTN Nigeria realised N1.346 trillion in revenue in the financial year ended December 31, 2020.

The leading telecommunications giant grew revenue by 15.1 percent from N1.169 trillion posted in the same period of 2019.

Operating profit surprisingly jumped by 8.5 percent from N393.225 billion in 2019 to N426.713 billion in 2020.

This, the telecom giant attributed to the surge in finance costs due to increased borrowings from N413 billion in 2019 to N521 billion in 2020.

MTN Nigeria further stated that the increase in finance costs was the reason for the decline in growth of profit before tax to 2.6 percent.

MTN Nigeria grew profit before tax by 2.6 percent to N298.874 billion, up from N291.277 billion filed in the corresponding period of 2019.

The company posted N205.214 billion profit for the year, a 0.9 percent increase from N203.283 billion recorded in the 2019 financial year.

Share capital remained unchanged at N407 million. While Total equity increased by 22.3 percent from N145.857 billion in 2019 to N178.386 billion in 2020.

MTN Nigeria’s market price per share increased by 61.8 percent from N105 to N169.90.

While market capitalisation as at year-end also expanded by 61.8 percent to N3.458 trillion, up from N2.137 trillion.

The number of shares issued and fully paid as at year-end stood at 20.354 million.

MTN Nigeria margins were affected by Naira devaluations and capital expenditure due to the new 4G network coverage roll-out.

Margins were adversely affected by the effect of naira devaluation and expenses associated with new sites’ roll-out to boost 4G network coverage in FY’20.

“On the former, we note that MTNN expanded the scope of its service agreement with IHS Holding Limited and changed the reference rate for converting USD tower expenses to NAFEX (vs CBN’s official rate previously). Thus, over the full-year period, the company’s operating margin contracted by 1.9 ppts YoY to 31.7%,” CardinalStone stated in its latest report.

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