LeadersNews

UBA Q1 2021 : PAT 27% Up ,Share Price Down 18%

 In spite of  UBA   27%  Profit After Tax, PAT , growth and  20.5%  Return of Average Equity ,ROAE in the first quarter  of the ongoing financial year  this performance is not strong enough to redress the damage done to stock value by its poor dividend paid at the end of the last finacial year ; the bank at the capital market is presently ranking 153rd  in the market     . 

UBA began the year with a share price of 8.65 NGN but has since lost 18.5% off that price valuation, ranking it 153rd on the NSE in terms of year-to-date performance.   Market analysts attributed investors less enthusiastic disposition towards the bank’s stock to the shock experienced by them at the end of 2020 financial year . Like e a man that kills or abandons a goose that laid golden egg , the bank gave a meager  35k per share to it investors  . Most of its investors who spoke with us under anonymity decried   this yearly routine of  miserable non-dividend payout despite its claim to improved profitability .  UBA gave a meager sum of N11.97 billion as the final dividend to shareholders out of N113billion net income. This translates 52k out of N3.20k ,its earning power or earning per share in 2020.

 Meanwhile, the bank in its release noted that it  leveraged on modest growth in both interest and non-interest income as well as increased efficiency to deliver an impressive 24% year-on-year growth in Profit Before Tax in the first three months of the 2021 financial year, to N40.6 billion compared with N32.7 billion recorded in the first quarter of 2020.

 Profit After Tax also grew by 26.8% from N30.1 billion in March 2020 to N38.2 billion in the period under review. Interestingly, UBA again sustained its strong profitability recording an annualised 20.5% Return on Average Equity (RoAE) compared to 19.9% in the same period of 2020.

 Driven by a year-on-year growth in interest income, UBA Group recorded another impressive 5.5% percent year-on-year growth in Gross Earnings to close at N155.4 billion for the three month period ending March 2021, compared to N147.2 billion recorded in the first three months of last year 2020.

 The bank’s total assets also rose by 2.5% to N7.9 trillion in the period under review, compared to N7.7 trillion recorded at the end of the 2020 financial year whilst shareholders’ funds grew to N762.4 billion up by 5.3% from N724.1 billion as at FY 2020.

 The Group Managing Director/CEO of the United Bank for Africa (UBA) Plc, Mr. Kennedy Uzoka, expressed satisfaction with the Bank’s performance in the first quarter of 2021, stating that the result reflects UBA’s capacity to sustainably grow earnings even in a highly uncertain macroeconomic environment.

 He added that the robust capital and liquidity positions have positioned the bank as it continues to support its customers across diverse sectors and markets, guided by prudent risk management practices.

 “This impressive 2021Q1 results reflect the capacity of our business to sustainably grow earnings even in a highly uncertain macroeconomic environment. We remain upbeat on the macroeconomic outlook of the countries in which we operate, especially as the COVID-19 vaccine distribution gains traction globally, whilst commodity prices and currencies continue to stabilise. Our robust capital and liquidity positions have positioned us to continue to support our customers across diverse sectors and markets, guided by prudent risk management practices,” The GMD said. 

 Uzoka pointed out the bank’s effort towards diligently executing its priorities for the year 2021, as it leverages people, process, and technology to deliver the best customer experience across all  its channels and touchpoints, achieving industry leadership and dominance, adding, “The bank is making strong progress in Nigeria where our continuous market share and efficiency gains are translating into higher profits. We are committed to sustaining this strong start throughout the year, leveraging our customer-First (C-1st) philosophy and unparalleled execution to deliver even stronger returns to our esteemed shareholders in 2021 and beyond;” Uzoka said.

Further breaking down the figures, UBA’s Group Chief Finance Officer, Ugo Nwaghodoh, said, “I am particularly pleased with our annualised return on average equity of 20.5% and return on average asset of 2.0%, as these indices buttress our commitment to delivering sustainable value to our stakeholders. We continued to deploy our balance sheet efficiency and digital-led cost optimisation initiatives to achieve desired outcomes. Cost-to-income ratio improved by 200bps to 60.4% during the period, whilst cost of funds settled at 2.0%, a 130bps reduction from 3.3% in 2020Q1.

Nwaghodoh expressed confidence that the bank will meet and surpass its target for the remaining three quarters of the year, adding that, “We are confident on the strong prospect for earnings growth, particularly as we are better positioned to consolidate recent market share gains in Nigeria and other geographies where we operate. This result is a strong start for the year, and we are optimistic about sustaining the exciting performance throughout the year and beyond.”

United Bank for Africa Plc is a leading Pan-African financial institution, offering banking services to more than twenty-one million customers, across over 1,000 business offices and customer touch points, in 20 African countries. With presence in the United States of America, the United Kingdom and France, UBA is connecting people and businesses across Africa through retail; commercial and corporate banking; innovative cross-border payments and remittances; trade finance and ancillary banking services

Show More

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button