UBA Increases Quarterly Profits by 33% as Revenue Surges

• The substantial rise in UBA's revenue from loans and investments contributed to the company's 33.1% quarterly profit growth over the prior year
• The interest revenue pool grew by 48.7% thanks to investment instruments like bonds, treasury bills, and promissory notes
• Net trading and foreign currency income rose 211.2 percent as the company cut its fair value loss on derivatives by as much as 82.4%

Legit.ng journalist Zainab Iwayemi has 5-year-experience covering the Economy, Technology, and Capital Market.

United Bank for Africa's (UBA) quarterly profits increased 33.1% over the previous year, aided by a significant increase in the revenue it received from loans and investments in financial assets.

According to the lender's financial report released for the three months ending March, investment instruments such as bonds, treasury bills, and promissory notes increased the interest income pool by 48.7% as opposed to 45.7% in the same period last year.

Read also

Almost $6 billion lost to crypto investment scams in 2024 – FBI

This signifies a shift from the conventional belief that interest income from lending, which is banks' main industry, will logically contribute more to the bottom line than other revenue streams.

According to Premium Times analysis, this may indicate that the lender is depending more on fixed-income securities and less on loans and advances, which have suffered from low payments from clients who are severely impacted by high borrowing rates.

At N351.9 billion, net interest income—the difference between the interest banks charge on loans and the interest they pay to depositors and other lenders—rose by 17%.

Lenders have additional room to charge higher interest rates on loans during the period under review since Nigeria's reference rate was 27.5%, up from 24.8% the previous year.

Borrowers now face greater burdens as a result, and a string of industry-wide payment defaults is pushing banks to allocate a larger portion of their earnings to paying past-due obligations on troubled loans.

Read also

Nissan forecasts huge annual net loss of up to $5.3 bn

During the review period, UBA allocated over seven times as much for that reason than it did during the 2024 period.

As the business reduced its fair value loss on derivatives by as much as 82.4%, net trading and foreign currency income increased by 211.2 percent. While after-tax earnings rose from N142.6 billion to N189.8 billion, pre-tax profit jumped by 30.7%.

CBN releases full list of approved charges for banks

Legit.ng reported that the Central Bank of Nigeria has shared the list of approved bank charges for commercial banks and other financial institutions.

The document titled the guide to charges by banks, and oher financial and non-bank financial institutions instructed that transaction receipt/alert/confirmation for any charge shall contain a description of the charge.

Checks by Legit.ng show that banks impose various charges on their customers, including transfer fees, account maintenance fees, and ATM withdrawal fees.

Source: Legit.ng