Capital

UBA Q1 2019 Initial Impression: Satisfactory

April 25, 2019/InvestmentOme Report 

  • Net interest income of N58.1billion, up 5.7% q/q; up 8.4% y/y            
  • Non-interest income of N25.6billion, up 72.0% q/q, up 6.8% y/y
  • Profit before tax of N30.1billion, up 9.0% q/q; up 13.6% y/y
  • Profit after tax of N28.6billion, up 69.5.5% q/q; up 20.8 y/y 

UBA posted its Q1 2019 late yesterday. It stated a 5.7% q/q (8.4% y/y) rise in net interest income, coupled with a 72.0% q/q (6.8% y/y) boost in non-interest income. These were enough to buffer impairment charges of N1.7billion (up 17.9% y/y) and a 7.6% q/q (4.6% y/y) rise in total opex. Resultantly, PBT was up 9.0% q/q (13.6% y/y) to N30.2billion, while PAT came in strong, up 69.5% q/q (20.8% y/y) to N28.7billion, on the back of a lower effective tax rate.

Similar to both Zenith & GT, UBA’s net loans were relatively flat q/q but up 4.7% y/y. Nonetheless, net interest margin and cost of funds were relatively flat. However, the bank’s interest income was up 4.9% q/q (9.1% y/y).

The bank also reported a 5.4% q/q growth in deposits. There was also a slight improvement in the deposit mix as term deposits declined 200bps q/q to 21% of total deposits. Despite the slight drop in fee and commission income, net fee and commission grew 16.4% q/q (11.7% y/y) on the back of the 27.7% q/q decline in fee and commission expense.

There was a slight improvement in cost to income ratio as it was down 190bps q/q to 62.1% despite the growth recorded in opex. Cost of risk increased marginally to 0.4% from 0.3% in Q4 2018.

To sum up, UBA’s performance was satisfactory with ROE and CAR of 22.3% and 24.5% respectively. 

UNITED BANK FOR AFRICA PLC Q1 2019 (YE: DEC) (N millions)

Q1 2019

Q/Q

Y/Y

Interest Income

98,561

4.9%

9.1%

Interest Expense

-40,486

3.7%

10.1%

Net Interest Income

58,075

5.7%

8.4%

Non-interest income

25,637

72.0%

6.8%

Profit before provisions

83,712

19.8%

7.9%

Loan Impairment charges

-1,714

-127.9%

17.9%

Total Opex

-51,944

7.6%

4.6%

PBT

30,156

9.0%

13.6%

Tax

-1,492

-86.1%

-47.1%

Tax rate

4.9%

-3391.0bps

-566.8bps

PAT

28,664

69.5%

20.8%

Source: Company financials, Investment One Financial Services Research  

Q1 2019 BANKS COMPARISON SHEET

NGN billion (unless stated otherwise)

 

ACCESS

ZENITH

GT BANK

UBA

Key Income Statement Figures

Gross Earnings

160.1

158.1

110.3

131.7

Net Interest Income

56.8

86.1

58.2

58.1

Non-interest Income

46.8

32.7

35.8

25.6

Total Expenses

-55.1

-59.4

-35.9

-51.9

Loan Impairment Charges

-3.4

-2.1

-0.7

-1.7

Profit Before Tax

45.1

57.3

57.0

30.2

Y/Y PBT Growth

 

64.4%

6.1%

8.0%

13.6%

Dividend (Kobo per share)

nil

nil

nil

nil

EPS (kobo per share)

139

160

174

82

Key Balance Sheet Figures

Total Assets

6,427

5,877

3,556

5,115

Total Liabilities

5,851

5,098

2,929

4,572

Total Equity

576

779

627

543

Key Ratios

Net Interest Margin

5.6%

8.9%

9.9%

7.0%

Cost of Fund

4.4%

3.0%

nil

4.0%

Cost to Income

53.2%

50.9%

38.6%

62.1%

NPL ratio

10.2%

4.9%

7.0%

nil

Liquidity (bank level)

47.6%

66.7%

47.7%

50.0%

Cost of Risk

0.5%

0.4%

0.1%

0.4%

Capital adequacy ratio (bank level)

19.1%

25.0%

22.3%

24.5%

ROE

30.9%

25.2%

32.8%

22.3%

ROA

2.9%

3.4%

5.

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