United Bank for Africa Plc (NSE TICKER: UBA) at the end of the last trading session released its Interim Consolidated Financial Statements for the period ended 31 March 2020 to the Nigeria Stock Exchange and the Investing Public.
The Bank reported an 11.77% growth in Gross Earnings, rising from N131.66bn reported in Q1 2019 to N147.16bn for the period in review. All three income segments saw marginal growths; Interest income went up to N109.10bn from N98.56bn in Q1 2019, Fees and commission income went up to N28.23bn from N24.22bn in Q1 2019, and finally Net trading and foreign exchange income went up to N9.14bn from the N6.14bn reported in Q1 2019.
A close look at the expenses showed that the Bank was able to see increase in expenses that were in-line with the increase in their income levels, we calculated its Profit after tax Margin to be 20.45%, a slight drop from the 21.77% recorded in the same period in 2019.
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UBA thus reported a Profit after Tax of N30.10bn, a 5.01% increase from the N28.66bn reported in Q1 2019. It posted Earnings per Share of N0.83 (Q1 2019: N0.82).
United Bank for Africa Plc (the “Group”) is a Nigerian registered company with address at 57 Marina, Lagos, Nigeria. The Bank and its subsidiaries are primarily involved in corporate, commercial and retail banking, trade services, cash management, treasury and custodial services.
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On the evaluation of the impact of Covid-19, the bank had this to say;
“The COVID-19 pandemic has caused disruptions to global economic and social activities during the quarter ended 31 March 2020. The direct impact in our markets of operation was experienced in the latter part of the quarter just ended. The full evaluation and the financial impact cannot be reasonably estimated at the date of publishing this report”.
“However, the Directors are confident that the Group’s going concern will not be threatened and it would be able to continue in operation post the pandemic”.
UBA has 34,199,421,358 outstanding shares and a market capitalization of N203.48bn.
View of Analysts @Investogist
UBA is the “U” in the famous FUGAZ grouping of the top banks in Nigeria, its shares were trading at N5.95 on the floor of the Nigerian Stock Exchange as at 11.15am (Nigerian Time) today.
A review of the Bank’s Full Year Financial report for the Period Ended 31st December 2019 enabled Investogist Analysts to put the fair value of this stock between N6.75 – N10.00. The stock is therefore trading below our estimated fair value, and hence has a BUY rating in our books.
However, we do not rule out further decline in the share price given the prevailing economic uncertainties brought about by the Covid-19 Pandemic. Should the stock suffer further price depreciation, we would change our rating from BUY to ACCUMULATE.
Written by:
Basil Maduakor
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