UBA PLC, one of Nigeria’s largest commercial banks said its net profit for the full year 2016 was NGN72 billion compared to NGN59 billion reported in 2015.
The result indicates that its profit year on year rose by 22%.
However, the result is still worrisome given the bank’s impairment charges for the year which rose by 440% to NGN27 billion last year compared to NGN5 billion declared in 2015.
Gross interest income for the year rose to NGN263 billion compared to NGN229 billion last year. The result also showed that the bank is spending more to make this income as interest expenses rose to NGN98 billion compared to NGN96 billion in 2015 when its impairments was a paltry NGN5 billion.
UBA recorded significant gains in trading and foreign exchange income which rose to NGN43 billion versus NGN20 billion in 2015. This will in the coming quarters slow down as Naira regains some value against the US Dollar.
One of the positive outlook of its result is the appreciation of its asset base to NGN3.5 trillion compared to NGN2.7 trillion posted in the year before. However, surging borrowing levels due to higher inflation and increased interest rates has increased its total liabilities to NGN3,0 trillion compared to NGN2.4 trillion in the previous year.
UBA PLC’s net asset at the end of the period is about NGN500 billion.
It is a common problem to all Nigerian banks, especially the big banks who have been overtly exposed to the oil and gas sector. The sector that has been badly it by the crash in global oil prices which reached its peak mid last year.
Fitch Ratings warned earlier this week that Nigerian banks will continue to struggle and many others are in danger should they continue to find it hard to recover huge loans and stabilise their poor capital positions.