UBA’s Quarterly Revenue Rises 29% to N53.6 Billion as Interest Rates Rise.

UBA’s quarterly revenue rises 29% to N53.6 billion as interest rates rise.

Net trading and foreign exchange income improved by 74.5 percent to N26.1 billion on the back of increased yields from fixed-income securities.

United Bank for Africa (UBA) reported a profit surge of 29.1 percent in the three months to March, profiting from a series of rate hikes by the Central Bank of Nigeria that helped strengthen interest income and boost the bottom line.

The pan-African lender saw interest income accelerate by more than half to N191.9 billion in the period compared to a year earlier, as six consecutive upward rate adjustments by the apex bank enabled banks to charge more for loans.

The CBN has increased the key interest rate six times since May, cumulatively by 650 basis points, to rein in inflation. Now at 18 percent, the benchmark rate is at its highest level since it was adopted in 2006.

Net interest income, a barometer for profitability measuring the difference between how much lenders earn from loans and what they pay to savers for keeping their deposits, climbed to N119.6 billion from N84.9 billion.

Similarly, net trading and foreign exchange income improved by 74.5 percent to N26.1 billion on the back of increased yields from fixed-income securities.

UBA raised its provision for impaired loans by 74 percent, while other operating expenses expanded by nearly half to N69.4 billion, fueled by a dramatic rise in costs incurred from fuel, repairs, and maintenance.

Spending on fuel, repairs, and maintenance came to over N14 billion for the quarter. That was an increase of 63.8% relative to one year ago.

Profit before income tax was 40 percent higher at N61.4 billion, while profit for the period stood at N53.6 billion, compared to N41.5 billion in the same period last year.

UBA’s total assets rose to N11.4 trillion at the end of March, growing by 4.6 percent year on year.

The bank has one-third of its assets and 42 percent of its operating income generated outside Nigeria, especially in West Africa.