UBA reports modest growth in first-quarter profit amid soaring costs

United Bank for Africa (UBA) saw passable growth in its net income for the first quarter of the year, much as revenue enlarged by almost 18.3 per cent, the lender’s unaudited financials obtained on Wednesday showed.

Largely boosted by income from interest, gross earnings came to N183.9 billion compared to the 155.4 billion of the corresponding period of last year, all the income sources of the pan-African bank recording increase.

Operating expenses leapt 20.5 per cent to N77.6 billion, leaving a great deal of bottom-line eroded.

That came as other operating expenses surged to N46.3 billion, driven by spikes in the spend on contract services as well as fuel, repairs and maintenance.

UBA set aside more than three times as much as the cash it provisioned a year earlier to cover credit whose possibility of repayment has been made doubtful by recurrent defaults by borrowers.

Profit before tax was up by 9.6 per cent, while post-tax profit jumped to N41.5 billion, accelerating by 8.8 per cent.

Total assets scaled up to N8.9 trillion from N8.5 trillion.

UBA’s investment in the twenty markets where it has footprints across Africa as well as France, the United Kingdom and the United Arab Emirates summed up to $105 million, CEO Kennedy Udoka told an investors and analysts call in Lagos in March.

“Our records show a very well-diversified loan book across various critical sectors across the economies in which we operate and the diversification is in both industry sectors, across geographies and customer segments,” Ugo Nwaghodoh, the bank’s chief finance officer said at the meeting.

“We are reinforcing our digital banking and payment offerings as we continue to see a stronger proportion of non-interest income to total income in the days ahead.”

Shares in UBA were quoted on the Nigerian Exchange at N8.10 per unit at 14:14 WAT on Wednesday, trading up 0.62 per cent.