United Bank for Africa (UBA) Plc has reported a nearly fourfold increase in after-tax profit, reaching N449.2 billion in the third quarter of 2023.
This outstanding growth was primarily fueled by a substantial boost in net trading and foreign exchange earnings, with net FX and trading income surging close to twelve times year-on-year, reaching N450.3 billion.
UBA’s unaudited financial report for the third quarter ending September 2023 indicates that this exceptional growth in net trading and foreign exchange income accounts for a significant portion, specifically 36.3 percent, of its gross earnings of N1.24 trillion for the same period.
This stands in stark contrast to the less than 7 percent recorded in the equivalent period last year.
The bank also experienced robust growth in interest income, which saw a year-on-year increase of 55.6 percent, reaching N666.3 billion by the end of September.
This figure has already exceeded the total interest income generated by the bank in the entire 2022 financial year, which amounted to N557.2 billion.
While the earnings have been impressive, there are notable challenges on the cost side of the equation.
Two major cost factors consumed a larger proportion of revenue during the review period.
The first is interest expenses, which increased by 62 percent to N223.2 billion at the end of Q3, surpassing the 55.6 percent increase in interest income.
The second significant cost increase relates to the net impairment charge on loans and advances, which surged by over ten and a half times year-on-year to N144.6 billion.