Once interest rates increased, UBA’s quarterly profit increased by 29% to N53.6 billion, due to a higher yield on fixed-income securities, net trading and foreign exchange income surged by 74.5% to N26.1 billion.
United Bank for Africa (UBA) announced a 29.1% increase in profit for the three months ending in March, benefiting from a series of rate increases by the Central Bank of Nigeria that boosted interest income and the bottom line.
When compared to the same period last year, the pan-African lender’s interest income increased by more than half to N191.9 billion, thanks to the apex bank’s six straight rate increases that allowed banks to raise loan rates.
To control inflation, the Central Bank of Nigeria (CBN) has raised the benchmark interest rate six times since May, totaling 650 basis points. The benchmark rate has reached its highest point since it was set in 2006, and it is currently at 18%.
The difference between what lenders make from loans and what they pay savers for maintaining their deposits, known as net interest income, increased to N119.6 billion from N84.9 billion, indicating increased profitability.
In account of higher yield on fixed-income securities, net trading and foreign exchange revenue climbed by 74.5% to N26.1 billion.
READ ALSO: I Watched Helplessly As Mob Set My Son Ablaze – Ondo Mother
UBA increased its provision for bad loans by 74%, and other operational expenditures increased by almost 50% to N69.4 billion as a result of sharp increases in fuel, maintenance, and repair charges.
About N14 billion was spent on gasoline, repairs, and maintenance during the quarter. That represented an increase of 63.8% over a year before.
Profit for the period was N53.6 billion as opposed to N41.5 billion in the same period previous year. Profit before income tax increased by 40% to N61.4 billion.
At the end of March, UBA’s total assets reached N11.4 trillion, an increase of 4.6% over the previous year.
One-third of the bank’s assets and 42% of its operating income are derived from sources outside of Nigeria, particularly in West Africa.
