United Bank for Africa Plc posted a 32 per cent increase in its profit before tax for the 2016 financial year, its audited 2016 full-year results showed.
The pan-African financial services group, with presence in 19 African countries, said its pre-tax profit was N91bn, up from N68bn in 2015.
In a statement on Sunday, it described the growth in gross earnings and profits as an attestation to its resilience, enhanced productivity and geographic diversification, evident in the impressive contribution from its African subsidiaries.
The group recorded a 22 per cent growth in gross earnings to N384bn as of December 2016 from N315bn at the end of the 2015 financial year.
It said, “The impressive growth illustrated the bank’s ability to grow profitability despite the difficult macro-economic environment. In addition to the rising adoption of electronic banking channels in many of the African markets, where UBA operates, the bank leveraged its strong franchise and geographical footprint.”
According to the statement, UBA’s profit after tax grew by 22 per cent to N72bn, from N60bn recorded in 2015, and the performance was buoyed by considerable growth in both interest and non-interest income, as well as increasing efficiency gains from cost management initiatives.
It said UBA’s subsidiaries outside of Nigeria were increasingly gaining market share, reinforcing the strong and impressive subsidiary contribution to the group, estimated at one-third of profit in 2016 from a quarter in the 2015 financial year.
The group’s board of directors proposed a final dividend of 55 kobo, subject to the approval of the shareholders at the forthcoming annual general meeting, holding next month in Lagos.
According to the statement, the bank had earlier paid an interim dividend of 20k to shareholders, bringing the total dividend for the 2016 financial year to N0.75, an unprecedented yield of 13.9 per cent, based on the stock’s unit price of N5.39 on the floor of the Nigerian Stock Exchange.
The Group Managing Director and Chief Executive Officer, Mr. Kennedy Uzoka, expressed satisfaction at the resilience of the bank, despite the macroeconomic challenges in a number of countries.
“Given the operating environment in 2016, I am very pleased with our profitability – an impressive 32 per cent growth in profit before tax to N91bn – whilst we have also focused keenly on operational efficiencies, illustrated by the reduction in our cost-to-income ratio.” Uzoka said.
On the outlook for the 2017 financial year, Uzoka, said, “As we implement our Customer First Philosophy, we are approaching 2017 with real optimism, especially with the outlook remaining positive in many of our markets, where we benefit from our increasingly diverse revenue streams.
“We reiterate our pledge to delivering excellent service to our customers, and remain committed to creating superior and sustainable return for our shareholders.”
The Chief Financial Officer, UBA Group, Mr. Ugo Nwaghodoh, said the bank extracted efficiency gains across its operations to boost profitability and saw significant improvement across major performance metrics including the net interest margin.
“Our performance in 2016 reflects the strong potential and resilience of our business. We grew top and bottom lines by 22 per cent and 32 per cent respectively, despite the stagflation in Nigeria, our core market. Reflecting improved balance sheet management and better value extraction, our net interest margin improved 40bps year-on-year to 6.7 per cent,” he said.