April 18, 2011
…Grows profit after tax 45%
UBA plc has announced it is resuming its Ivory Coast operations in May, adding that it is making a provision of N50 million for monthly losses in Ivory Coast.
All Foreign banks including UBA suspended operations in Ivory Coast earlier this year, due to the bloody power struggle that ended with the arrest last Monday of Laurent Gbagbo, who refused to step down after losing a November election. The announcement comes as UBA releases its full-year result for its financial 2010, showing gross earnings of N185.2billion in 2010. Profits before tax and exceptional items grew by 45 percent from a N10.9billion annualised figure in 2009 to N15.9billion in 2010.
A release from the bank stated that the 2010 full-year results were moderated by provisions, exceptional write-offs and expansion cost into other African countries. However, the first quarter results, released simultaneously, show strong improvements as the expansion into Africa and diversification of its earnings base have started paying off.
In line with the improvement is earnings, UBA is recommending a twin dividend declaration of stock and cash dividend. The bank is making a bonus payment of one share for every four held by shareholders.
The statement disclosed that UBA’s loans and advances stood at N629 at the end of the 2010 financial year in December; while total assets grew marginally to N1.62 trillion and balance sheet size improved to N2.27 trillion.
But in the first quarter ended March 31, 2011, the bank made net profits of N3.9 billion, up by 150 percent from N1.6 billion recorded in the corresponding period of 2010. This was in spite of the decline in gross earnings to N40.5billion in the first quarter of 2011 (N48.3 billion was recorded in first quarter of 2010). On the balance sheet side, loans stood at N630 billion, deposits rose to N1.31 trillion, total assets rose to N1.7 trillion during the first quarter of 2011.
The group also recorded improvements in key lines of the income and balance sheet statements. Fee-based incomes (non interest incomes) rose on the back of improved transaction incomes and gains of the bank’s strategic positioning within the African region, while balance sheet growth culminated from enhanced funding base.
Commenting on the results, Emmanuel Nnorom, the bank’s executive director, Finance, said: “Profit before tax and exceptional items of N15.9 billion were reported in 2010, as against an annualised corresponding figure of N10.9 billion in 2009. But for the N12.7 billion exceptional items taken during the period, net profits would have been stronger The N12.7 billion resulted from the transfer to AMCON and the special assets of N7 billion that was being written off since the last three financial periods arising from Continental Trust Bank (CTB).
For the first quarter of 2011, he said: “We have already started making great strides in driving our business in the 2011. We will focus on reinvigorating our business and leveraging our wide distribution network and Pan-African and international presence to optimise the bank’s productivity, while flattening our cost base and reducing asset deterioration to the barest minimum. We will aggressively drive new businesses and consolidate on our existing businesses for maximum profitability through rigorous performance management systems.”