WorldStage Newsonline– United Bank for Africa Plc (UBA) on Monday published its 2024 audited financials with profit after tax expanded by 26.1% to N766.57 billion from N607.70 billion in 2023, translating to an earnings per share of N21.73 (2023FY: 17.49).
UBA’s performance was underpinned by the robust growth in the group’s core income (+120.4% y/y), offsetting the decline in non-core income (-33.9% y/y).
Meanwhile, the Board proposed a final dividend of N3.00/share (2023FY: N2.30/share), translating to a dividend yield of 8.2% based on the last closing price of N36.80/share (21 March), bringing the total dividend for 2024FY to N5.00/share (2023FY: NGN2.80/share).
The group’s funded income recorded a marked growth of 120.4% y/y to N2.37 trillion, driven by higher income recorded across all contributory lines.
Precisely, the significant hike in the monetary policy rate (+850bps) and growth in the group’s interest-earning assets (+55.4% y/y to N25.47 trillion) resulted in higher income from investment securities (+137.0% y/y to N1.20 trillion), loans and advances to customers (+98.9% y/y to N779.69 billion), loans and advances to banks (+127.2% y/y to N241.65 billion), and placement with banks (+109.4% y/y to N146.08 billion).
The elevated interest rate environment also reflected in UBA’s interest expense, increasing by 128.2% y/y to N839.25 billion. The group incurred higher costs on customers’ deposits (+85.2% y/y to 456.61 billion), banks’ deposits (+277.8% y/y to N196.63 billion), borrowings (+169.9% y/y to N180.56 billion), and lease liabilities (+131.0% y/y to N5.45 billion). This was despite the lower expensive deposits, with the group recording a CASA ratio of 88.5% (2023FY: 85.5%). Consequently, the group recorded an expansion in net interest income (+116.4% y/y) and net interest income ex-LLE (+155.0% y/y) after accounting for the 22.7% y/y growth in credit impairment charges.
Further down, non-interest income declined by 33.9% y/y to N582.85 billion as the fair value loss on derivatives (N342.21 billion) undermined the higher income from net fees and commission (+87.8% y/y to N355.00 billion) FX revaluation (+1,002.6% y/y to N293.09 billion), FX trading (+19.8% y/y to N134.31 billion) and investment securities (+52.7% y/y to N96.75 billion). Altogether operating income expanded by 34.5% y/y to NGN1.86 trillion.
Operating expenses grew by 69.0% y/y to N1.06 trillion, mirroring the inflationary pressures in 2024FY. Precisely, the group incurred higher costs on personnel expenses (+72.1% y/y to N314.66 billion), fuels, repairs and maintenance (+70.9% y/y to N101.28 billion), contract services (+70.1% to N111.88 billion), AMCON levy (+78.2% y/y to NGN71.91 billion), and NDIC premium (+97.3% y/y to N47.56 billion). Nonetheless, given that the group’s operating expenses grew faster than operating income, UBA’s operational efficiency deteriorated as the cost-to-income ratio (ex-LLE) settled at 56.8% (vs 45.2% in the prior year).
Overall, profitability grew stronger as the group’s profit before tax rose by 6.1% y/y to N803.73 billion.
Following the bill passed by the National Assembly in 2024, imposing a one-off 70.0% levy on realised FX profits for 2023 and 2024, UBA recorded a windfall tax of NGN57.91 billion – NGN24.82 billion for 2023 and NGN33.09 billion for 2024. Nonetheless, despite the windfall tax and current tax expense of N161.17 billion, tax credits of N181.92 billion provided relief, bringing income tax for 2024 to N37.16 billion.
