Nigeria's UBA grows profit by 8 pct, to pay 0.50 naira dividend

UBA Ceo, Oduoza 

Nigeria’s United Bank for Africa (UBA) said on Friday it key financial parameters grew substantially at the end of its 2013 financial year, due to improved growth drive, sustained operational efficiency and enhanced productivity.
The bank said its profit before tax rose 7.8 percent to 56.1 billion naira, from 52 billion naira the same period last year. The bank has proposed a dividend of 0.50 naira per share to its shareholders.
Gross earnings also grew to 264.7 billion naira for the twelve months to December 2013, as against 220.1 billion naira a year ago, the bank said in a statement.
It said the growth in earnings was largely driven by a growth of 40.4 percent in loans and advances as well as a 25 percent growth in the Bank’s total deposits.
According to the bank, it’s loan-to-deposit ratio improved from 38.7 percent to 44.3 percent. The remarkable growth in loans and advances, especially in the last quarter of the year, puts the Bank in a vantage position for continued revenue growth in the coming years.
UBA group chief executive, Phillips Oduoza said the bank’s earnings for the year was quite impressive, “with positive contributions from all our businesses. Our Bank achieved a good result despite a challenging operating environment, demonstrating the strength and resilience of our.
Commenting on the result, FBN Capital said the proposed dividend was unchanged from last year’s payout to shareholders, but was below the 0.58 naira estimate.
“The yield works out at 7.1 percent, which is among the highest we are likely to see this reporting season. Year-to-date, UBA shares have lost 21 percent, compared with a loss of 7.6 percent for the All Share Index,” FBN Capital said in a research note to clients on Friday.
It said “oing forward, given the mixed surprises on various lines across the P&L in Q4, we believe the market will be looking for clarity on how underlying earnings will be sustained into 2014. The N7 billion in other comprehensive income gain in 2013 implies negative base effects from the onset already. “Notwithstanding, in the very near term, we believe the market is likely to focus more on the fact that relative to management’s guidance, the results were slightly better, with 2013 ROE coming in at 23.5 percent, compared with guidance of 22 percent. The results were also broadly in line with consensus expectations. As such, we would expect a neutral reaction from the market to the results. “