UNITED BANK FOR AFRICA PLC ...Africa's Global Bank
United Bank for Africa Plc
Audited 2016 Results for the Year Ended December 31, 2016.
UBA GROWS PROFIT BY 32%, DECLARES N0.55 KOBO FINAL DIVIDEND PER SHARE
This Earnings Press Release should be read in conjunction with the Audited Full Year 2016 Consolidated Financial Statements. This Earnings Press Release is also available on our website at http://www.ubagroup.com/ir/.This analysis is dated March 24, 2017. Unless otherwise indicated, all amounts are expressed in Nigerian Naira, and have been primarily derived from UBA's Consolidated Financial Statements, prepared in accordance with the International Financial Reporting Standards ("IFRS"). The accounting policies used in the preparation of these consolidated financial statements are consistent with those used in UBA's Audited Full Year 2015 Financial Statements. Additional information relating to the Bank is available on UBA's websitehttp://www.ubagroup.com.
LAGOS, NIGERIA - March 24, 2017 - United Bank for Africa Plc ("UBA" or "the Group") announced its Audited 2016 Financial Results, showing a 32% YoY growth in profit before tax to N90.6 billion and a 19% annualized post tax return on average equity. Demonstrating its prudent culture of risk asset creation and management, UBA maintained a conservative balance sheet, with 3.9% non-performing loan ratio and 20% BASEL II capital adequacy ratio. The Board of Directors proposed a final dividend of N0.55/share, subject to shareholder approval at the Annual General Meeting.
HIGHLIGHTS
Income Statement
Gross Earnings: N384 billion, up 22% YoY, compared to 2015FY Gross Earnings of N315 billion;
Operating Income: N271 billion, a 29% YoY growth, relative to 2015FY performance;
Operating Expenses of N153 billion, up 12% from N137 billion in 2015FY;
Profit Before Tax: N91 billion, translating to 32% YoY growth, compared to the N68 Billion in 2015FY;
Profit After Tax: N73 billion, compared to N60 billion recorded in 2015FY (22% YoY growth);
Cost-to-Income Ratio: c.63%, a 388bps YoY reduction, in line with management guidance;
Return on Average Equity: relatively stable at 19%.
Balance Sheet
Total Assets: N3.50 trillion, compared to N2.75 trillion as at 2015FY (27% YoY growth);
Net Loans: N1.51 trillion; a 45% YoY growth, but partly driven by Naira depreciation;
Deposits: N2.49 trillion, translating to 19% YoY growth;
Total Equity: N448 billion, up from N333 billion as at 2015FY (35% YoY growth).
Commenting on the result, Kennedy Uzoka, the GMD/CEO of UBA Plc, said;
"Given the operating environment in 2016, I am very pleased with our profitability; an impressive 32% growth in profit before tax to N91 billion; whilst we have also focused keenly on operational efficiencies, illustrated by the reduction in our Cost-to-Income Ratio.
Despite the slowdown in the Nigerian economy, our largest market and the need for a prudent approach to business, nonetheless we demonstrated our entrepreneurial culture, enhanced customer service and geographic diversification, which all contributed to growing major income lines. We grew gross earnings by 22% to N384 billion, supported by strong growth in both interest and non- interest income lines. The local currency weakness in a number of our chosen markets, particularly the Naira devaluation in Nigeria, impacted on our cost of doing business. Nonetheless, we continued to implement our cost management initiatives, which helped to mitigate the inflationary pressure on our operating expenses. Overall, we improved on our cost-to-income ratio, closing the year at 63%, in line with our target. The N72 billion post-tax profit translates to 19% return on average equity, which is broadly in line with our guidance for the 2016 Financial Year.
Notwithstanding the volatile and uncertain operating environment, we maintained a healthy balance sheet, as reflected in our prudential ratios; 40% and 20% liquidity and BASEL II capital adequacy ratios respectively. Our relatively conservative risk appetite was justified, even as the macroeconomic pressures increased the non-performing loan ratio to 3.9%. We will remain prudent in our risk asset creation, with diligent adherence to our risk management best practices. Whilst we will continue to grow across our operations in Africa, now representing 32% of Group revenue, we will maintain our culture of banking only quality and profitable assets.
As we implement our CustomerFirst Philosophy, we are approaching 2017 with real optimism, especially as the outlook remains positive in many of our markets and we benefit from our increasingly diverse revenue streams. We reiterate our pledge to delivering excellent service to our customers, as we remain committed to creating superior and sustainable return for our shareholders."
Also speaking on UBA's financial performance and position, the Group CFO, Ugo Nwaghodoh said:
"Our performance in 2016 reflects the strong potential and resilience of our business. We grew top and bottom lines by 22% and 32% respectively, despite the stagflation in Nigeria, our core market. Reflecting improved balance sheet management and better value extraction, our net interest margin (NIM) improved 40bps YoY to 6.7%. Even as we prudently increased our collective impairment on performing loans to accommodate the weak fundamentals of the economy, our cost of risk remained relatively modest at 2.1%.
We are also making remarkable progress towards our medium-term vision for our African subsidiaries (ex-Nigeria), which contributed a third of our profit, as we continue to leverage innovative offerings to grow our share of the respective markets. As we diligently execute our CustomerFirst initiative, I am particularly upbeat on the future of business and the value creation for shareholders."
Statements of Comprehensive Income For the Year Ended 31 December
In millions of Nigerian Naira Gross earnings | 2016 | Group 2015 | 2016 | Bank 2015 | ||
383,647 | 314,844 | 269,895 | 247,378 | |||
Interest income | 263,970 | 229,629 | 177,313 | 185,919 | ||
Interest expense | (98,770) | (96,030) | (68,525) | (83,161) | ||
Net interest income | 165,200 | 133,599 | 108,788 | 102,758 | ||
Fees and commission income | 73,199 | 61,892 | 49,836 | 42,103 | ||
Fees and commission expense | (13,988) | (8,557) | (11,139) | (6,740) | ||
Net fee and commission income | 59,211 | 53,335 | 38,697 | 35,363 | ||
Net trading and forign exchange income | 43,820 | 20,366 | 32,678 | 12,615 | ||
Other operating income | 2,658 | 2,957 | 10,068 | 6,741 | ||
Total net non-interest income | 105,689 | 76,658 | 81,443 | 54,719 | ||
Operating income | 270,889 | 210,257 | 190,231 | 157,477 | ||
Net impairment loss on financial assets | (27,683) | (5,053) | (25,521) | (3,491) | ||
Net operating income after net impairment loss on financial assets | 243,206 | 205,204 | 164,710 | 153,986 | ||
Personnel expenses | (64,614) | (57,446) | (43,501) | (42,033) | ||
Depreciation and amortisation | (8,650) | (7,968) | (6,281) | (6,281) | ||
Other operating expenses | (79,237) | (71,226) | (57,279) | (54,937) | ||
Total operating expenses | (152,501) | (136,640) | (107,061) | (103,251) | ||
Share of profit/(loss) of equity-accounted investee | (63) | (110) | - | - | ||
Profit before income tax | 90,642 | 68,454 | 57,649 | 50,735 | ||
Income tax expense | (18,378) | (8,800) | (10,108) | (3,093) | ||
Profit for the year | 72,264 | 59,654 | 47,541 | 47,642 | ||
Other comprehensive income | 38,960 | (1,937) | - | - | ||
Items that will be reclassified to income statement | ||||||
Foreign currency translation differences | ||||||
Fair value (losses)/gains on available-for-sale investments | 26,926 | 8,105 | 26,896 | 8,119 | ||
Other comprehensive income | 65,886 | 6,168 | 26,896 | 8,119 | ||
Total comprehensive income for the period | 138,150 | 65,822 | 74,437 | 55,761 | ||
Profit attributable to: | 69,404 | 58,604 | 47,541 | 47,642 | ||
Owners of Parent | ||||||
Non-controlling interest | 2,860 | 1,050 | - | - | ||
Profit for the period | 72,264 | 59,654 | 47,541 | 47,642 | ||
Total comprehensive income attributable to : | 130,783 | 65,108 | 74,437 | 55,761 | ||
Owners of Parent | ||||||
Non-controlling interest | 7,367 | 714 | - | - | ||
Total comprehensive income for the period | 138,150 | 65,822 | 74,437 | 55,761 | ||
Basic and diluted earnings per share (annualised) expressed in Naira | 2.04 | 1.79 | 1.31 | 1.36 | ||
Consolidated and Separate Statements of Financial Position
As at In millions of Nigerian Naira ASSETS Cash and bank balances Financial assets held for trading Derivative assets Loans and advances to banks Loans and advances to customers Investment securities Other assets Investment in equity-accounted investee Investments in subsidiaries Property and equipment Intangible assets Deferred tax assets | Group Dec-16 Dec-15 | Bank Dec-16 Dec-15 | ||
760,930 52,295 10,642 22,765 1,505,319 970,392 37,849 2,925 - 93,932 14,361 33,060 | 655,371 11,249 1,809 14,600 1,036,637 856,870 40,488 2,236 - 88,825 11,369 33,168 | 610,910 52,295 10,642 23,850 1,090,355 533,016 31,192 1,770 70,702 80,252 4,905 29,696 | 590,774 11,249 1,809 14,591 822,694 568,203 22,528 1,770 65,767 80,145 4,954 31,853 | |
TOTAL ASSETS | 3,504,470 | 2,752,622 | 2,539,585 | 2,216,337 |
LIABILITIES | 14 | 327 | 14 | 327 |
Derivative liabilities | ||||
Deposits from banks | 109,080 | 61,066 | 30,484 | 350 |
Deposits from customers | 2,485,610 | 2,081,704 | 1,698,859 | 1,627,060 |
Other liabilities | 110,596 | 54,885 | 72,901 | 34,219 |
Current tax liabilities | 5,134 | 6,488 | 522 | 634 |
Borrowings | 259,927 | 129,896 | 259,927 | 129,896 |
Subordinated liabilities | 85,978 | 85,620 | 85,978 | 85,620 |
Deferred tax liabilities | 62 | 15 | - | - |
TOTAL LIABILITIES | 3,056,401 | 2,420,001 | 2,148,685 | 1,878,106 |
EQUITY | 18,140 | 18,140 | 18,140 | 18,140 |
Share capital | ||||
Share premium | 117,374 | 117,374 | 117,374 | 117,374 |
Retained earnings | 138,623 | 113,063 | 110,152 | 100,900 |
Other reserves | 160,714 | 77,250 | 145,234 | 101,817 |
EQUITY ATTRIBUTABLE TO OWNERS OF THE PARENT | 434,851 | 325,827 | 390,900 | 338,231 |
Non-controlling interests | 13,218 | 6,794 | - | - |
TOTAL EQUITY | 448,069 | 332,621 | 390,900 | 338,231 |
TOTAL LIABILITIES AND EQUITY | 3,504,470 | 2,752,622 | 2,539,585 | 2,216,337 |
United Bank for Africa plc published this content on 24 March 2017 and is solely responsible for the information contained herein.
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