The capacity building of United Bank of Africa has reflected on its profitability ratios as revealed by the nine months scorecard of the bank that were released on Tuesday to the market. Top and bottom lines were mildly up, to consolidate the quarterly results made available so far in this current financial year.
The new management of the bank has demonstrated high regard for corporate governance by keeping to its post-listing requirement as its 2016 Q3 result was released earlier compared to that of the corresponding period of 2015.
The bank reported 8.2% rise in gross earnings to N265.53 billion from N247.21 billion in 2015, which translated to an 8% rise in profit tax after to N52.27 billion from N48.56 billion in 2015. The impairment loss on financial assets for the period increased to N9.10 billion from N3.68 billion in 2015, which affected the bank’s profitability as provision was up by 147.28 percent.
These notwithstanding, the bank has shown resilience by remaining in green, despite the weak economy and risk exposure, with all sectors of the system falling or already in recession and moving below zero level. Coupled with over regulation of its industry and continuous tightening of monetary policy by the apex bank.
The marginal growth in top line is adduced to the bank’s dexterity in navigating its balance sheet towards areas of opportunity within the review period.
Third quarter Earnings Per Share (EPS) was up marginally by 7.6% to N1.44 from N1.34 in 2015. The up-trend in the bank’s financials so far in the year has supported the share price as it is currently trading at N4.10 per share, which is over 41% above its price of N2.91 each when it released its report in 2015.
The market price of the stock is 185% below its book value, which indicates that the bank’s stock is grossly undervalued for discerning investors to fix their gaze. The bank’s book value currently stands at N11.96 and price to earnings ratio is 0.96x. Investors’ waiting period has slightly increased, as a result of growth in the company share price.