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UBA Projects N15bn Profit in Q1

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United Bank for Africa Plc yesterday said it would record a profit before tax  of N15.1 billion for the first quarter ended March 31, 2012, showing a recovery from a loss envisaged for the full-year 2011 financial year.

The bank issued a profit warning that it would announce a loss for 2011 driven principally by one-off   provisioning and write-offs.
In a notification to the Nigerian Stock Exchange (NSE), UBA said: “The bank expects to announce a loss, driven principally by one-off writes against earnings, including those arising from the transfer of loans to the Asset Management Company of Nigeria (AMCON).

“Management does not anticipate further similar write offs in 2012 and following these actions, affirms that the Group’s balance sheet and capital are in a robust position providing a solid foundation for the Group’s future growth path. Earnings from the underlying operations of the group’s Nigerian business give considerable grounds for optimism for the coming year and the group continues to witness significant growth in its operation across Africa with an increasing contribution to group profitability.”

Explaining further, the Chief Finance Officer of UBA,   Mr.  Ugo Nwaghodoh, said  write offs were necessary and had left the   bank with a healthy balance sheet.

“Having put the past behind us, the outlook is very positive for the bank with increasing contributions from our operations in Africa,” Nwaghodoh said.

UBA expect to end the Q1 of 2012 with gross earnings   of N59 billion and profit before tax of N15.1 billion.  Compared to the bank’s actual performance in the corresponding period of 2011, gross earnings growth will be 45.6 per cent  and profit before tax  growth will be in excess of 200 per cent.

THISDAY checks revealed that apart   taking significant losses on AMCON sales, UBA also wrote off some long term contracts it had on its books and took a loss on them.

It was gathered that the bank took substantial haircut of 40 per cent on Zenon   facility, which is the highest relative to other banks on Zenon.
UBA’s balance is said to be now very clean with three per cent non-performing loan ratio and out of the  18 countries, outside Nigeria, where it is operating, 14 are now profitable while other four are fairly new.

Shares in the bank fell marginally by 0.5 per cent or one kobo from N2.00 to close at N1.99 per share.

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Updated 7 Years ago

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