United Bank for Africa (UBA) posted a record N607.7 billion in annual net profit after significant increase in interest income and foreign exchange gains impacted bottom-line by as much as 256.9 per cent last year.
Gross revenue for the pan-African financial services group which, apart from its home market Nigeria, has footprints in 23 countries advanced to N2.1 trillion from N853.2 billion.
Interest income from lending and investment securities nearly doubled to N1.1 trillion, helped by the longest cycle of monetary policy rate tightening in Nigeria last year, according to the lender’s audited financials issued on Monday.
The CBN policy gave lenders the liberty to charge more for loans and allowed higher yields on fixed-income assets.
On that score, net interest income – a profitability metric measuring the difference between how much banks earn from loans and what it pays to depositors for keeping their cash, improved by 86.4 per cent.
One major dark spot in the financial result was the dramatic increase in the amount set aside to cover problematic loans whose chances of being repaid have been hampered by multiple defaults. Consequently, impairment charges for credit losses on loans soared more than seven times to N144 billion within the review period.
On account of a 70 per cent slide in the value of the naira against the US dollar last year, UBA, which holds a good part of its assets in foreign currency, recorded a jump in net trading and foreign exchange gain to N659.3 billion from N72.2 billion after converting its foreign exchange earnings into the local currency.
Pre-tax profit came to N757.7 billion, up from N200.9 billion a year ago.
UBA earned N435.9 billion in windfall gain from exchange differences on translation of foreign operations. That compares with a loss of N2 billion reported for the prior year.
The gain lifted the lender’s total comprehensive income for the year to N1.1 trillion year.
Total assets scaled up to N20.7 trillion from N10.9 trillion.
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