Africa’s Global Bank, United Bank for Africa (UBA) Plc reported a profit surge of 29.1 per cent in the first quarter of 2023. The series of rate hikes by the Central Bank of Nigeria (CBN) helped strengthen interest income and boost the bottom line.
The pan-African lender saw interest income accelerate by more than half to N191.9 billion in the period compared to a year earlier as six consecutive upward rate adjustments by the apex bank enabled banks to charge more for loans.
The CBN has increased the key interest rate six times since May cumulatively by 650 basis points to rein in inflation. Now at 18 per cent, the benchmark rate is at its peak level since it was adopted in 2006.
Net interest income, a barometer for profitability measuring the difference between how much lenders earn from loans and what they pay to savers for keeping their deposits, climbed to N119.6 billion from N84.9 billion.
Similarly, net trading and foreign exchange income improved by 74.5 per cent to N26.1 billion on the back of increased yield from fixed-income securities.
UBA raised its provision for impaired loans by 74 per cent, while other operating expenses expanded by nearly half to N69.4 billion, fuelled by a dramatic rise in costs incurred from fuel, repairs and maintenance.
Spending on fuel, repairs and maintenance came to over N14 billion for the quarter. That was an increase of 63.8 per cent relative to one year ago.
Profit before income tax was 40 per cent up at N61.4 billion while profit for the period stood at N53.6 billion compared to N41.5 billion in the same period of last year.TEXEM Advert
UBA’s total assets rose to N11.4 trillion at the end of March, growing by 4.6 per cent year on year.
The bank has one-third of its assets and 42 per cent of its operating income generated outside of Nigeria, especially in West Africa.
By this the bank has set the pace for another bountiful year after it reported an impressive performance in 2022.
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.
