United Bank for Africa Plc (UBA) has recorded a 67.42 per cent growth in profit after tax for its half year 2011 financial performance.
According to the bank’s unaudited financial result for the period ended, June 30, 2011, which was presented to the Nigerian Stock Exchange (NSE), its profit after tax rose to N8.12 billion from N4.85 billion recorded in similar period in 2010 while profits attributable to the Group rose by 90.3 per cent to N8.2 billion.
However, its gross earnings dipped by 6.41 per cent to N87.66 billion from N93.66 billion recorded in 2010.
The bank posted a profit before tax of N10.11 billion, rising by 17.01 per cent from N8.64 billion recorded in 2010 while its total assets grew by 12.37 per cent to N1.817 trillion from N1.617 trillion recorded in 2010.
Non-interest revenues grew by 17 per cent to N30.3 billion, leading to an increase in the proportion of fee-based income to 35 per cent in the first half of 2011.
According to a statement by the bank, the benefits of risk asset expansion are yet to impact on fund based incomes, thereby presenting ample room for revenue expansion in the second half of the year.
Its operating income rose to N65.5 billion on the back of strong fee-based incomes compared to N63.7 billion in 2010.
Commenting on the bank’s performance, Emmanuel Nnorom, Executive Director – Finance said, “UBA’s performance was bolstered by management’s concerted efforts to curtail operating costs evidenced by a 2.4 per cent reduction in operating expenses from N51.8 billion in June 2010 to N50.6 billion in June 2011 in spite of the N4.9 provision charge made to the income statement.”
The statement noted that overall the balance sheet size strengthened further with total assets and contingents closing 17.1 per cent higher than the full year 2010 position to N2.66 trillion.
This growth, according to the bank, was driven by risk asset expansion recorded during the period under review, while attesting to the essence of its wide distribute. The bank’s deposit base grew by 11.4 per cent to N1.41 trillion compared to N1.27 trillion in December 2010.
“In line with full year projections, loan book has also grown by almost 14 per cent to N715.8 billion, bringing Group loan-to-deposit ratio to about 51 per cent.
Whilst the “Group looks forward to enhanced interest revenues from increased lending, it continues to seek avenues to extend quality credit to its teeming customers and clients.
“Notwithstanding, UBA maintained a good proportion of liquid assets in its aggregate asset base closing with a liquidity ratio of 42 per cent at the end of the period.
“Driven by solid shareholder funds of N187.1 billion (N179.4 billion in December 2010), capital adequacy ratio remained strong at 17 per cent,” the statement explained.
The statement further noted that the release of the half year result coincides with the announcement of key management appointments, as part of the steps required to re-organizing its operations in line with the Financial Holding Company model.