United Bank for Africa (UBA) will pay shareholders less dividend for the last financial year despite a more-than-a-quarter climb in profit, and a swelling of N60.6 billion or 10.9 per cent in revenue, its financial report released Monday shows.
This move suggests the top tier lender could be taking the long view by laying up more earnings for future use rather than prioritising immediate returns for stockholders now.
In its report, UBA’s profit before tax was up by 18.5 per cent from N111.3 billion to N131.9 billion, while profit after tax for the year leapt 27.7 per cent from N89.089 billion to N113.765 billion.
Yet, the Tony Elumelu-led UBA is hoping to prune total dividend for shareholders to N17.8 billion or N0.52 this time, comprising the final dividend proposed at N0.35 and an interim dividend of N0.17 earlier in the year.
Its total dividend for shareholders for 2019 summed up to N27.4 billion at N0.80 per share.
The bank recorded gross earnings of N620.4 billion, which exceeded the N559.8 billion posted in the same period of 2019 by over one-tenth tenth as earnings derived strength from a surge in net interest income by 16.9 per cent from N221.9 billion to N259.5 billion.
Net trading and foreign exchange income grew from N37.6 billion to N59.5 billion, also supporting revenue.
A 3.25 per cent advance in net fee and commission income meant this earnings category increased from N80.004 billion to N82.608 billion, according to data from the bank’s financial statement.
“Operating Expenses grew by 10.1 per cent to N249.8 billion, as against N217.2 billion in 2019, well below average inflation rate of 13.2 per cent for the year, thus reflecting the bank’s cost effectiveness,” UBA said.
UBA, whose operations on the continent span 20 countries, deployed a new mobile banking application on Monday with multiple-factor authentication security details that will make it much less vulnerable to hackers’ attack.
Shareholders fund witnessed scaled up by N126.170 billion, moving from N597.978 billion to N724.148 billion.
Shares of UBA were quoted at N7.20 per unit at 10.10 West African Time in Lagos on Monday, trading down by 10 per cent, the maximum daily drop limit allowed by the NSE.
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