UBA posts an impressive 102% growth in pre-tax profit in Q3 2024

United Bank for Africa Plc reported its 2024 third-quarter results showing pre-tax profits grew by 101.88% year on year, reaching N194 billion.

This took nine-month pre-tax profits to N603.483 billion versus N502.091 billion in the same period last year.

Key highlights (2024 Q3 vs. 2023 Q3):  

• Gross earnings: N1.027 trillion +213.97% YoY

• Interest Income: N795.341 billion +234.18% YoY

• Interest Expense; N366.636 billion +402.03% YoY

• Net interest income; N428.705 billion +159.87% YoY

• Net fees and commission income: N88.756 billion +146.61% YoY.

• Net trading and foreign exchange income: N84.305 billion +163.66% YoY

• Total non-interest income: N178.146 billion +159.33% YoY

• Operating Income: N606.851 billion +159.71% YoY

• Net operating income after impairment charge on loans and receivables: N543.585 billion +123.71% YoY

• Profit after tax: N205. 781 billion +189.58% YoY.

• Earnings per share N5.78 +197.94% YoY

• Loans and advances to customers N7.675 trillion +46.79%.

• Cash and Cash equivalents N9.108 trillion +50.07%

• Total Assets N31.801 trillion +53.98%.
• Customers’ deposits N22.969 trillion +54.24%.

Commentary: 

In Q3 2024, UBA delivered impressive financial results, with significant growth across both its top-line and bottom-line metrics.

This strong quarterly performance, along with solid first-half results, boosted the bank’s nine-month profit after tax to N525 billion.

• The top-line performance was primarily driven by a substantial rise in interest income, which accounted for 77% of gross earnings.
• The contribution of interest income from loans and advances to customers to total interest income declined by 19% in Q3, making up 40.4% of total interest income for the quarter, and lowering its 9-month contribution to 37%.
• Meanwhile, interest income from investments in securities contributed 35% in Q3. Combined with a 47.28% contribution in the first half of 2024, pushed the 9-month contribution to 42%, reflecting a well-diversified interest income base.
• Notably also, is the continuous rise in interest expenses driven by interest expenses on customers’ deposits, which accounted for 46% of interest income and was up by 50% in Q3.
• Foreign exchange revaluation gains contribution to profit continued to dwindle compared to last year.  In Q3, the group recorded a foreign exchange loss of N74.816 billion.

On the balance sheet health, the group’s total assets grew by 54% to N31.801 trillion, driven by increases in cash and bank balances, loans and advances to customers, and investments in securities.

The 47% growth in loans and advances to customers, which reached N7.67 trillion, outpaced the bank’s 2024 loan growth guidance of 20%, indicating strong lending activity and demand from both retail and corporate clients.

Similarly, customer deposits rose by 54% to N22.968 trillion, surpassing the 2024 deposit growth target of 20%.

This robust deposit growth reflects the bank’s ability to attract and retain customers in a competitive environment.

It also builds on the 93% deposit growth achieved in 2023, which exceeded the 2023 guidance of 45%.

The sustained growth in deposits is a positive signal, as it provides the bank with a stable and cost-effective funding base, supporting lending operations and balance sheet expansion.

Overall, the bank expressed satisfaction with its performance. Commenting on the results, the Executive Director of Finance & Risk Management, Ugo Nwaghodoh, remarked:

“I am delighted at the milestone reached in driving operational efficiency, reflected in the cost-to-income ratio normalizing around the 50% range. We remain on track with various strategies to optimize our cost of funds and operating expenses.”