UBA 9 Months 2019 Result; Strong Top Line Earnings, Stable Outlook


November 6, 2019

Teslim Shitta-Bey, Managing Editor

United Bank of Africa (UBA) may not have the same tranquil consumer retail appeal as it had when the “wise men bank with UBA” advert was crafted in the 1990’s but the bank has done fairly nicely in both top and bottom line performance for the 9 months up to and including September 2019. Gross earnings sprinted up by +14% Y-o-Y and profit after tax (PAT) climbed up by +32.3%. The rise in net earnings margin indicates a cutback in the Group’s cost-to-income numbers (CIR).


Income Statement 

  • Gross earnings grew from N374.83bn in 9 months 2018 to N428.22bn in the contemporary period of 2018, a top line growth of +14.2%.
  • Operating Income went up by +11.6% growing from N238.36bn in 9 months 2018 to N265.99bn in the same period of 2019.
  • Operating expenses equally increased in 2019 relative to 2019 by rising from N149.09bn in 9 months 2018 to N161.62bn in 9 months of 2019, representing a rise of +8.4%.
  • Profit before tax scaled up from N61.69bn by September 2018 to N81.63 by the same period of 2019, resulting in a pre-tax growth of +32.3%
  • The Group’s CIR saw a 178 basis points fall on a Y-o-Y basis from 62.55% in 9 months 2018 to 60.80% in 9 months 2019, the figure is still fairly high from a competitive perspective but is heading in the right direction
  • Investors would be grateful for an increase in equity return (ROaE) from 15.8% in 9 months 2018 to 20.6% in the similar period of 2019, the stocks share price has, however, not shared the optimism of the deposit money bank’s equity earnings. The Group’s recent share price of N6.20 is down -10.67% Y-o-Y, but the stock has seen a rebound in its October 2019 floor of N5.70.

Statement of Financial Position

  • Total assets of the Group moved up mildly by 1.9% from N4,87trn in FY 2018 to N4.96trn in 9 months 2019, the gradual increase in total assets reflects containment of fixed asset growth despite an almost +15% growth in loan assets, the trends in fixed and loan assets would suggest a stronger return on assets year-to-date (YTD)
  • The Group’s risk assets went up +14.7% from N1.73trn in FY 2018 to N1.98trn in 9 months 2019, the rise in risk assets improved the bank’s loan to deposit ratio (LDR) over the period
  • Customer’s deposits of the Group rose from N3.35trn in FY 2018 to N3.37trn in 9 months 2019, representing a marginal growth of +0.9% which helped to steady the LDR at about 60%
  • Shareholder’s Funds of the bank climbed up +10.5% to N555.53bn from FY 2018, reflecting the Group’s internal capital generation capacity

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