…Stock Price Down By 20.4%, Under-performs NSE ASI
By Uzoma Akobundu
The share price of United Bank for Africa Plc which has a negative return of 20.4 per cent since this year may see further dip following insignificant 1 per cent increase in the bank’s third-quarter (Q3) profit.
United Bank for Africa Plc is a pan African financial institution with presence in 20 African countries. The bank has presence in the global financial centres; London, New York and Paris, but its gross earnings increased by 12.26 percent in Q3’2018.
At N 8.20 per share as at October 16, the bank’s price has under-performed the Nigerian Stock Exchange (NSE) All Share Index (ASI) which recorded negative growth of 14.44 per cent this year. The Q3 result of the banking group for the period ended 30th September 2018 was released on the Nigeria Stock Exchange (NSE) on Tuesday evening.
It reported Gross Earnings of N374.8 billion compared to N333.9 billion recorded in the corresponding period of 2017.
UBA’s operating expenses increased by 2.3 percent to N149.1 billion, compared to N145 billion recorded in the same period of last year.
The Bank posted a Profit Before Tax of N79.1 billion whilst Profit After Tax stood at N61.7 billion.
Shareholders’ Fund increased by 0.33 per cent to N509.286 billion from N507.627 billion in Q3’17 while Basic and diluted earnings per share expressed in Naira decreased by 0.94 per cent to N1.72 from N1.74 in Q3’17.
Total Assets of N4.51 trillion rose by 10.8 percent year-to-date rise over the N4.07 trillion total asset recorded as at December 2017.
In a statement preceding the Q3 result of the bank, the Group Managing Director/CEO, UBA Plc, Kennedy Uzoka, said; “We achieved a number of strategic imperatives during the quarter and committed more investments in the future of the business – building a solid foundation for sustainable and superior return to our shareholders”
Uzoka said that he is pleased that the Bank’s Virtual Banking Chatbot, Leo, which debuted on Facebook earlier in the year, was successfully launched on WhatsApp during the quarter. “This new channel offering, which enables our customers to fulfil their banking transactions through simple chat commands, is another premier initiative in our suite. The early pay-offs are quite compelling – recent customer acquisitions and broader transaction volume growth are exciting leading indicators that reinforce our confidence in these novel channels,” he said.
“Our franchise is increasingly renowned for financial solution and I am happy with the consistent growth in our businesses across the continent. We have grown balance sheet by 11% year-to-date to over N4.5 trillion. Notwithstanding the statutory-induced cost growth, our earnings proved resilient, as we recorded nine-month profit before tax of N79 billion. Notwithstanding the macro-risk arising from upcoming elections in Nigeria, our single largest market, we are confident of finishing the year strong,” Uzoka concluded.
The Group CFO, Ugo Nwaghodoh said that despite the relative volatility in the third quarter of 2018, especially in the face of U.S. interest rate hikes and concerns over global trade war, which has disrupted the interest and exchange rate environment in many African countries, the bank remains on track to deliver its earnings target for the year.
He said: “We remain committed to our five-year plan of working down CIR to 50%, which we consider to be a normalised medium-term CIR. Overall, we closed the third quarter with a post-tax RoAE of 16% and the Group remains well capitalized and liquid, as reflected in the Group’s capital adequacy of 21% and Bank’s liquidity ratio of 53%.”