UBA Half-Year Earnings Presentation: The key takeaways


Wednesday, August 31, 2016 5:22 PM / Research

The microeconomic challenges that influenced business outlook in 2015 financial year are yet to abate in 2016- the banks have witnessed growing headwinds and tougher operating environment in the current year.

The slow economic activities, low global oil price, shortage of FX, technical devaluation of currency  with attendant impacts on NPL, floating of Naira, increase in MPR by 200bpts to 14% in the face of growing inflation and negative GDP growth- this had impacted and still impacting both  top-line and bottom-line of the banks.

As a result of these persistent macroeconomic challenges and tough regulatory environment, UBA Plc posted mixed performance outlook as top-line experienced modest decline by -0.1% while bottom-line recorded modest growth of +1.9%, with corresponding weakness in RoAE, which closed lower at 18% against 22% growth recorded in previous year comparable period.

The bottom-line closed at N32.62billion against N31.99billion-. The improved cost management as CIR moderated at 63.0% against 64.00% had impacted the bottom-line considerably.

Also, the NPL ratio moved up to close at 2.4% against 1.7% posted  in 2015 comparable period- The bank’s NPL ratio reveals weakness in risk assets management and recovery initiatives when compared with previous posture- However, it closed below regulatory benchmark of 5% - this remains commendable.

Summarily, below are the key takeaways from the Half-year 2016 presentation as presented by the management of the bank;

        Hike in MPR impacts funding cost

         Naira devaluation increased cost of funds but improved operating efficiency cushioned the effect

         Gross earnings and operating income remain stable with impressive contribution from various electronic channels

         Annualized return on average equity stands at 18%, still on track to 20% target

         Cost-to-income ratio defies the impact of growth in inflation during the period

         NPL up due to provisions for assets showing deterioration on the back of tough operating environment

         FX revaluation and devaluation of Naira impact loan growth and bottom-line

         Portfolio impairment charges and Naira devaluation impacted Loan loss

         Us dollar portfolio and power sector loans are performing impressively

        The e-banking products impacted bottom-line considerably

        The bank plans aggressive electronic channels to boost market share in Kenya


Related News

1.       UBA Issues an Update on the Publication of 2016 Half Year Interim Results

2.      UBA Declares N32.62bn PAT in Q2 2016 Result Proposes 20k per share Interim Dividend SP N4.45k

3.      United Bank for Africa (UBA) re-admitted into FOREX Market

4.      UBA Plc Has No Involvement in Recent Event in Turkey

5.      UBA Market Reaction Likely to be Neutral to Negative Loan Loss Provisions Decline by 57 in Q1 16

6.      UBA Declares N16.99bn PAT in Q1 2016 Result SP N3.20k

7.      UBA Records Strong Q4 15 Results Outperform rating maintained

8.     UBA: Asset quality defies trend, but still hazy earnings outlook

9.      UBA’s PBT Declines by 39.5% QoQ in 2015 Audited Result

10. UBA Grows Gross Earnings by 9.8% as Loan Loss Expense Increases by 58% in Q4’15

11.   UBA Records Weaker than Expected Non-Interest Income in Q4 2015 Results

12.  UBA Proposes 40kobo per share Dividend in 2015 Audited Result,(SP:N3.41k)

13.  UBA Board Approves 2015 Audited Financial Statements; Awaits CBN Approval for Official Release

14.  UBA Board Appoints Mr. Kennedy Uzoka as MD/CEO Designate 

15.  UBA declares N48.56 bln Profit in Q3'15 Result,(SP:N4.18k) – Proshare

16.  GUARANTY UBA and ZENITH Are Top Picks in Banking Sector - Afrinvest 

Related News
Proshare is Nigeria’s Premier Financial, Business and Economic Information Hub (since 2006)
Registered Office: Plot 590B, Lekan Asuni Close, Omole Phase II, Isheri LGA, P.O. Box 18782, Ikeja, Lagos, Nigeria. Telephone: 0700 PROSHARE (070077674273)
Some of our Trademarks are: WebTV, TheAnalyst, Proshare, Personal Finance, The Nigerian Capital Market Reports, Money Africa, The Nigerian Investor, Making Money in the Nigerian Capital Market, Investor Relations Service, Proshare Investment Clubs, Evaluating your Financial Health, Becoming your own Stock Analyst
Proshare - Facebook Proshare - Twitter