United Bank for Africa (UBA) Plc has announced that its total earnings for Q3 increased by 83.2 per cent to N2.398 trillion compared to N1.308 trillion in September last year, driven by net interest income which rose by 149 per cent, from N443 billion in 2023 to N1.103 trillion this year.
In its unaudited financial results for the third quarter (Q3) ending September 30, 2024 showed strong growth in all its key financial indicators. The bank’s profit before tax (PBT) went up by 20.2 per cent, closing at N603.48 billion, up from N502.09 billion recorded at the end of Q3 in 2023.
Profit after tax also saw a rise of 16.9 per cent, increasing from N449.26 billion last year to N525.31 billion. In nominal terms, UBA recorded higher income from investment securities (+166.3% y/y to N793.82 billion), loans to customers (+123.7% y/y to N665.16 billion), placement with banks (+406.7% y/y to N220.99 billion), and loans to banks (+335.5% y/y to N118.93 billion).
The stellar growth in these income lines was supported by the impact of the higher yield environment and the significant rise in the group’s interest-earning assets (+72.1% YTD to N28.20 trillion). UBA’s balance sheet remains strong, with total assets rising by 54 per cent to N31.801 trillion, up from N20.653 trillion at the end of December 2023.
The bank also reported that customer deposits grew by 52.7 per cent, reaching N26.50 trillion, compared to N17.355 trillion last year while shareholders’ funds saw a significant growth of 77 per cent, now standing at N3.585 trillion, up from N2.030 trillion. The stellar growth in the group’s core income (+170.0% y/y) was sufficient to offset the decline in non-core income (-24.1% y/y), leading to a 14.3 per cent growth in earnings per share (EPS) to N14.78 (9M-23: N12.93).
UBA’s interest expense grew by 211.6 per cent y/y to N695.57 billion in 9M-24, largely reflecting the elevated rates in the debt market as the group incurred higher costs on deposits from customers (+153.1% y/y to N405.00 billion), deposits from banks (+575.1% y/y to N207.05 billion) and borrowings (+183.2% y/y to N80.93 billion) in the review period.
Consequently, the group recorded an expansion in net interest income (+149.0% y/y) and net interest income ex-LLE (+228.3% y/y) after accounting for the 14.6% y/y decline in credit impairment charges.
Non-interest income declined during the period by 24.1 per cent y/y to N435.84 billion as the fair value loss on derivatives (N243.38 billion) undermined the gains from foreign exchange revaluation (+671.2% to N251.37 billion), net fees and commission income (+104.6% y/y to N233.85 billion), FX trading (+222.0% y/y to N91.39 billion), and investment securities (+68.5% y/y to N83.10 billion).
However, the sturdy growth in interest income was enough to outstrip the decline in non-interest income, causing operating income to grow by 62.2 per cent y/y to N1.42 trillion.
UBA’s CEO, Oliver Alawuba, expressed satisfaction with the bank’s performance, noting the growth in its revenue streams despite economic challenges such as inflation and exchange rate fluctuations. He also highlighted the bank’s investment in technology, which has improved customer experience and operational efficiency.
Executive Director, Ugo Nwaghodoh, added that the bank is focused on controlling its operating costs and preparing to increase its share capital to support future growth. UBA is also committed to maintaining a strong risk management culture as it looks for more opportunities to expand its operations.