UBA Income rose N166.94bn H1’15 Gross Earnings- reports

United Bank for Africa (UBA) plc has proposed 20 kobo dividend per share as the group’s half-year (H1) 2015 gross earnings rose to N166.94 billion from N138.225 billion in the corresponding H1 period of 2014, indicating an increase of about 20.8 percent.

The group’s consolidated and separate financial statements for the half-year ended June 30, 2015, released Thursday at the Nigerian Stock Exchange (NSE) show that the bank interest income rose to N116.235 billion from N98.547 billion in H1’2014.

 

The group’s net interest income also rose to N65.658 billion from N55.211 billion in H1’14. Profit before income tax appreciated to N39.046 billion from N28.893 billion in H1’14, while its profit for the H1’15 period rose to N31.999 billion from N22.856 billion in H1’14.

The bank’s group reported N30.357 billion in fees and commission income, an increase from N27.087 billion in H1’14. Net trading and foreign exchange (FX) income rose to N16.949 billion from N10 billion in H1’14. Basic and diluted earnings per share (naira) rose to N0.94 from N0.71 in H1’14.

UBA group reported total assets increase to N2.929 trillion in H1’15 from N2.762 trillion in the corresponding H1 period of 2014.

On the bank’s corporate action, it will close its register for qualified members from September 10, 2015 to September 11, 2015, (both dates inclusive). The payment date for the interim dividend is September 16, 2015.

Reacting to this result, FBN Capital analysts said: “The interim dividend is a first for UBA and was not expected (until recently when it was confirmed that UBA was auditing its results). Our reaction to the dividend is mixed.

“While clearly attractive (especially, given that our full-year dividend forecast was 14 kobo), we would have preferred a much lower payout in order for UBA to preserve its capital better. Recall that the bank only recently concluded a rights issue, which raised N11.5 billion. To put this into context, the interim dividend equates to a sum of N7.3 billion.

“Looking away from the dividend, we believe the underlying results are strong enough, especially given that they are audited, to allow the market to breathe a sigh of relief. On the back of these results, we would expect consensus estimates to be revised up. We believe these concerns about H1 earnings contributed to the sell-off in UBA shares over the past few months.

“At the start of this week, the shares were down -42 percent in three months compared with -28 percent for the banking sector and -16 percent for the ASI. We expect to see a recovery on the back of these results. We rate UBA shares Outperform. Our estimates are under review.”

by Iheanyi Nwachukwu