UBA Grows Q1 Profit By 27 Percent To ₦38.16 Billion

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In 2021, United Bank For Africa Plc Reports A Profit Of N119 Billion
In 2021, United Bank For Africa Plc Reports A Profit Of N119 Billion

United Bank of Africa (UBA) Plc. One of Nigeria’s tier-1lenders released its Q1’ 2021 Unaudited Financial Statements to the investing public on Sunday, 18th April 2021.

From the released result, the Gross Earnings and the Profit Before Tax (PBT) grew by 7.56% and 24% to ₦155.45 billion and ₦40.58 billion respectively in Q1’2021 when compared with ₦144.52 billion and ₦32.73 billion in corresponding Q1’ 2020.

The growth in the Gross Earnings was driven by 10% increase in non-interest income to ₦46.86 billion in Q1’ 2021 from ₦38.06 billion and 2.01% marginal increase in interest income to ₦108.59 billion in Q1’ 2021 from ₦106.46 billion in Q1’ 2020.

  • The increase in the Non-interest Income was largely impacted by the 79% increase in Fee and Commission Income to ₦34.96 billion in Q1’ 2021 from ₦28.24 billion in Q1’ 2020 as a result of the growth in the use of the E-banking platform and 110.59% increase in the Other Operating Income to ₦1.43 billion on the back of an increase in income from dividend, rental and cash handling. Similarly, the Fee and Commission Expenses rose by 53% from ₦9.15 billion in Q1’2020 to ₦14.59 billion in Q1’ 2021 due to the 68.81% increase in the E-banking expenses to ₦13.53 billion in Q1’ 2021.
  • Furthermore, the interest expenses incurred declined by 70% to ₦34.21 billion in Q1’ 2021 from ₦43.69 billion in Q1’ 2020 as a result of the low-interest yield on Customers’ Deposit. On the other hand, the OPEX rose by 9.88% to ₦64.45 billion in Q1’2021 as against ₦58.66 billion in Q1’2020 which is still below the March headline inflation rate of 18.17%.
  • Despite the increase in Operating Cost, the Profit After Tax (PAT) grew by 26.76% to ₦16 billion in Q1’ 2021 from ₦30.10 billion in Q1’ 2020. While the Earnings-Per-Share (EPS) settled at ₦1.04 in Q1’2021 from ₦0.83 in Q1’2020.
  • From the satisfactory performance posted by the bank for Q1’ We maintained our target price for UBA to ₦8.50 with an upside potential of 17.24% to a closing price of ₦7.25 as of Wednesday,s 21st April 20201. Hence, we recommend a HOLD on the stock