- LCCI highlights challenges facing Nigeria’s economy at 64
United Bank for Africa Plc will pay an interim dividend of N2 per share for the first half of 2024 (H1 2024), as the bank’s gross earnings grew by 40 per cent year-on-year to hit N1.37 trillion during the half-year.
The bank recorded a pre-tax profit of N401.6 billion, a marginal 1% decline from the N403.6 billion posted in H1 2023. The bank posted a profit after tax of N316.4 billion for H1 2024 representing a 16 per cent year-on-year decline from the N378.2 billion posted in the corresponding period in 2023.
However, the banks’ shareholders’ funds increased by 47 per cent from N2.03 trillion in December 2023, to N2.99 trillion.
During the period under review, UBA enjoyed a bumper surge in interest income, as it recorded an interest income of N1 trillion, which marks a whopping 134% year-on-year growth from N428.3 billion posted in H1 2023.
However, there was a 77% year-on-year decline in the group’s net trading and FX gains to N98.2 billion, from N418.3 billion as of H1 2023.
The group posted a net interest income of N674.6 billion, marking a 143% year-on-year growth from the N278.1 billion posted in H1 2023. There was also an 85 per cent growth in the net fee and commission income to N145.1 billion, from N78.3 billion as of the corresponding period in 2023.
In line with income growth, there was a corresponding growth in expenses, as the group’s employee benefits expenses jumped by 93 per cent year-on-year from N69.4 billion as of H1 2023 to N133.9 billion as of H1 2024. UBA spent N126.6 billion on the payment of wages and salaries during the six months, in contrast with N65.9 billion spent in H1 2023.
There was also a 122 per cent growth in the bank’s operating expenses to N312.4 billion, from N140.9 billion as of H1 2023. The bank spent N47.9 billion on fuels, repair, and maintenance, which was 219 per cent higher than the N15 billion spent in the first six months of 2024.
Commenting on the group’s result, Oliver Alawuba, the Managing Director of UBA Plc noted, “The Group’s performance has been buoyed by consistent strong growth in all core and sustainable banking income lines.”
He also noted that in their bid to acquire more customers, the bank has invested heavily in technology, data analytics, and product innovation to improve their services and customer experience.
During the half-year, UBA’s total assets grew from N20.7 trillion to N28.3 trillion. Loans and advances to customers grew by 30 per cent to N6.8 trillion during the six months, from N5.2 trillion at the start of the year, while its investment securities grew by 48% to N4.6 trillion from N3.1 trillion. UBA’s customer deposits grew by 35% to N20.1 trillion, from N14.9 trillion at the start of the year.
Ugo Nwaghodoh, the Executive Director of Finance & Risk at the bank expressed delight at the milestone achieved by the bank in driving operational efficiency, as reflected in cost-to-income ratio normalizing around the 50% range.
“Our cost optimization provides scope for further moderation, as we explore options towards a drastic reduction of our foreign currency denominated cost components, robotizing and automation of processes and application of artificial intelligence to our operations.
“The Group has made significant progress and is on course to shore up its share capital to support its medium to long term aspirations, whilst aligning with the recent regulatory requirement in Nigeria and other jurisdictions that we operate in,” he said.
Details from the bank’s cash flow statement show that the bank received N361.8 billion as proceeds from its borrowings, however, it spent N601.5 billion on the repayment of principal and interests during the six months.
In line with the bank’s culture of paying both interim and final cash dividends, the Board of Directors of UBA Plc has declared an interim dividend of N2.00 per share for every ordinary share of N0.50 each held by its shareholders, representing a 300% increase compared to the N0.50 declared in the similar period of 2023.
United Bank for Africa Plc is a leading Pan-African financial institution, offering banking services to more than thirty-five million customers, across 1,000 business offices and customer touch points in 20 African countries.
With presence in New York, London, Paris and Dubai, UBA is connecting people and businesses across Africa through retail, commercial and corporate banking, innovative cross-border payments and remittances, trade finance and ancillary banking services.
LCCI highlights challenges facing Nigeria’s economy at 64
Meanwhile, the Lagos Chamber of Commerce and Industry has called on the Federal Government to implement bold measures to stabilise the economy and ensure sustainable growth as it celebrates its 64th Independence Day anniversary.
In a statement on Monday, the LCCI president, Gabriel Idahosa, reflected on Nigeria’s challenge with being heavily oil-reliant and called for revenue diversification, infrastructure development, fiscal discipline and debt management, human capital development and security as the sustainable path.
Idahosa noted that Nigeria has yet to fully harness the benefits that should accompany a major oil-producing nation as he highlighted the importance of non-oil sectors including agriculture, solid minerals, and gas.
He commended Nigeria’s economic performance, especially the Gross Domestic Product growing by 3.19 per cent in the second quarter of 2024 and the oil sector’s 10.15 per cent growth in the same period, but decried insecurity and oil theft.
“Oil production remains suboptimal due to insecurity and oil theft. To address these issues, the government must proactively address the recent challenges bedevilling the oil and gas sector,” Idahosa said.
The chamber lamented the sluggish growth in agriculture, manufacturing, and trade sectors, hampered by insecurity, exchange rate volatility, and high interest rates, despite the non-oil sector’s 2.80 per cent growth which accounted for 94.30 per cent of the total GDP.
Idahosa highlighted Nigeria’s weak infrastructure, policy inconsistencies, and high inflation as investors’ major concerns and the impact of insecurity on agricultural production which drives up food prices.
“The growth of 1.41 per cent recorded for agriculture, 1.28 per cent for manufacturing, and 0.70 per cent for trade are comparatively low compared to other sectors that grew above four per cent. This also indicates the threats facing these sectors that power Nigeria’s real sector.
“The woes in these two sectors are responsible for the frightening rise in our inflation rate. Real sector activities may be constrained in the coming months with the excruciating burden of worsening insecurity, exchange rate volatility, high interest rates, and rising debt service,” the LCCI president added.
Idahosa stressed the need for government intervention to address insecurity, stabilise the power sector, and promote renewable energy adoption.
He also urged the Federal Government to tackle policy inconsistencies in taxes, import restrictions, and foreign exchange market operations.
NGX gains N57.53bn as investors’ patronage of UBA, OANDO shares increase ASI by 10 bps
Also, investors’ interest in the shares of UBA, OANDO helped drive trading activities on the floor of the Nigerian Exchange Limited closed on a positive note in the final trading session of September.
The move led to the reverse of losses recorded in the previous two sessions.
Consequently, the NGX, All-Share index gained 10 basis points to close at 98,558.79 points as against 98,458.68 points recorded on Friday.
As a result, investors pocketed N57.53 billion, with the market capitalization climbing to N56.64 trillion, while year-to-date return rose to 31.81 percent.
At the close of trading, the top ten gainers, UBA, OANDO, ACCESSCORP, GUINNESS UCAP, WAPCO, GTCO, STANBIC, ZENITH, FLOURMILL, advanced by 9.90 percent, 9.84 percent, 5.64 percent, 2.36 percent, 1.94 percent, 1.93 percent, 1.27 percent, 0.78 percent, 0.13 percent and 0.08 percent respectively. Just as 21 other stocks recorded gains, while 22 equities recorded losses and the price of 64 equities remain unchanged.
The total volume traded advanced by 132.95 percent to close at 1.86 billion, valued at N111.58bn and traded in 10,583 deals. JAPAUL GOLD was the most traded stock by volume, with 182.75 million units traded, while UBA was the most traded stock by value, worth N1.28 billion.
Sectoral performance was mixed as the Insurance sector indices rose by 2.1 percent and Banking 1.1 percent, while the Industrial Goods declined by 1.1 percent and Consumer Goods by 0.1 percent. The Oil & Gas index closed flat.
