- United Capital Reports 11% Drop in Earnings in Q3, 2019
United Capital Plc, one of Nigeria’s leading investment banks, reported 11 percent decline in gross earnings in the period ended September 30, 2019.
In the financial results, released through the Nigerian Stock Exchange, gross earnings declined from N5.97 billion recorded in the same period of 2018 to N5.32 billion in the third quarter of 2019.
The investment bank realised N2.41 billion as investment income, a 9.3 percent decline from the N2.66 billion achieved in the third quarter of 2018.
Fees and commission income also declined by 35.8 percent from N121.3 million to N77.9 million while net interest margin dipped by 28.86 percent from N578.6 million to N411.6 million in the third quarter of 2019.
Accordingly, net operating income posted in the third quarter of 2019 declined from N4.84 billion to N4.29 billion. A decline of 11.36 percent.
Also, profit before tax drop 10.11 percent from N3.66 billion filed in the same quarter of 2018 to N3.29 billion in the third quarter of 2019. While profit after tax dipped 12.34 percent from N3.082 billion to N2.7 billion.
The company’s CEO, Peter Ashade, attributed the difference in performance to the challenging business environment.
He said: “While the business environment in 2019 has been quite challenging, compared to what was obtainable in 2018, united Capital Plc Group has been able to consistently deliver on improvement in its numbers as evidenced in the growth in revenue. Profit before taxation and profit after taxation over the three quarters of 2019. This increase was driven majorly by the growth in revenue to the group from advisory business which has seen a CAGR of about 19 percent considering the first three quarters of the year and we also expect this to grow further in view of the various strategic initiatives up our sleeves. More so, revenue from other line items are showing signs of improvement save for revenue from investment income which is made up of income from fixed deposit and investment securities, given the persistent decline in interest rate this year.”
The bank’s earnings per share were flat at ₦0.18 in the third quarter of 2019, the same as the corresponding period of 2018.