With the ratio of cost to income still high at 64 per cent, UBA Group Plc was able to improve on its profitability in the half year (H1) result ending June 30, 2015 due to measures that boosted return on investments among others.
The H1 result of the financial service provider and top player in the Banking Sector of the Nigerian Stock Exchange showed a 21 per cent growth in earnings for the bank from N108.15 billion posted in H1 2014 to N131 billion, while earnings for the group appreciated by 21 per cent or N28.72 billion to N166.9 billion.
Improved management of UBA Group’s asset yielded a positive return on investments as it records an increase of 0.18 per cent from 0.91 per cent in H1 2014 to 1.09 per cent achieved in the same period of 2015.
There was a 17.95 per cent rise in interest income to N116.2 billion in 2015 from N98.55 billion recorded in 2014. However, Interest expense grew 16.7 per cent to N50.6 billion in 2015 compared with N43.3 billion in 2014. There was increase in net interest income by 18.9 per cent to N65.6 billion.
Measuring the group’s efficiency; cost to income ratio remained high, through reduced 4 per cent to 64 per cent in 2015 as against 68% in the same period of 2014, meaning the bank is cutting cost while increasing profit amidst a tough operating environment.
UBA’s net operating income rose 21% to N108.7 billion in June 2015, as against N90 billion in the same period of 2014, return on equity also increased 0.8 per cent to 10.40 per cent from 9.57 per cent recorded in 2014, depicting profitability of the group, evident in its 40 per cent PAT appreciation to N32 billion
Loan to deposit ratio increased by 6.2 per cent from 44.6 per cent to 50.8 per cent for 2015, illustrating sufficient means of the lender’s ability to cover withdrawals made by customers while non-performing loans ratio (NPL) stands at 1.8% of total loans granted.
The result of performance pushed profit for the group up by 40 per cent or N9 billion from N22.86 billion recorded in H1 2014 to N32 billion in the same period of 2015.
A 35 per cent rise in its first half pre-tax profit to 39.1 billion was also recorded as total income for the period increased by 69.5 per cent to N34.2 billion from N20.2 billion posted in 2014.
Customer deposits rose by 12.4 per cent to N2.23 trillion from N1.98 trillion as total asset scaled up 17.6 per cent from 2.49 trillion to 2.93 trillion while total liabilities increased by 16.45 per cent to 2.6 trillion from 2.3 trillion in the periods under review.
With the positive showing, the bank led 32 equity gainers with a 10.12 per cent or 35 kobo appreciation (highest achieved in the last 7 days) to close at N3.81 on September 4, 2015.
The group has 36.3 billion shares outstanding, and market capitalisation of N138.2 billion as at September 4, 2015.
By Pita Ochai
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