UBA Declares N78.6bn PAT in 2018 Audited Results,Proposes N0.65k Final Dividend Per Share

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Friday, March 15, 2019  03:22 PM  / NSE With Additional Notes from FBNQuest

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 Initial Reaction – FBNQuest 


Implications

Although UBA’s 2018 PBT of N106.8bn beat consensus 2018 PBT forecast of N101.4bn, PAT of N44.4bn missed consensus forecast of N77.1bn because of a negative result of –N33.3bn in other comprehensive income (OCI). The bank’s  PAT implies a (post-tax & OCI) ROAE of 8.9%, well behind management’s 18.0% guidance. As such, we expect to see a subdued reaction by the market.  


Positives

UBA’s Q4 2018 PBT grew by 7% y/y largely driven by loan recoveries of +N6.1bn (vs. –N20.0bn Q4 2017). Its 2018 loan loss provisions of N4.5bn implies a cost-of-risk of just 0.3%, well below ours and management guidance of 1.2% and 1.5% respectively.

 

Negatives

In Q4, pre-provision profits fell by 22% mainly because of a -57% y/y decline in non-interest income. The bank reported a post-tax loss of –N3.7bn due to a negative result of –N22.0bn related to fx translation losses due to the consolidation of foreign subsidiaries.   

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The bank’s management has proposed a final dividend of N0.65 per share which is in line with our N0.65 forecast and implies a yield of 8.7%. Having paid an interim dividend of N0.20, the bank’s gross dividend of N0.85 implies a payout ratio of c. 65%

 

Year-to-date, UBA shares have underperformed the index. The shares have shed -3.3% ytd compared with the -0.9% return on the ASI.

 

We rate UBA Outperform. Our estimates are under review.

 

UBA Q4 2018 results: actual vs. FBNQuest Capital Research estimates (N millions)

Proshare Nigeria Pvt. Ltd.


Proshare Nigeria Pvt. Ltd.


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