E-business yields 50.7 per cent more YoY
By Jeph Ajobaju, Chief Copy Editor
E-business alone fetched N41.9 billion for United Bank for Africa (UBA) by the third quarter of the year ended September 2021 (Q3 2021), a growth of 50.7 per cent more than N27.8 billion by Q3 2020, according to the financial results of the bank.
What E-business Income yielded the bank in the first nine months of 2021 is likely to surpass the N44.2 billion it made through the channel in full year 2020 (FY 2020) and turn out to be one of the most improved in the sector.
E-business income from July-September (Q3 2021) alone was N12.3 billion, a dip from the record N17.2 billion posted from April-June (Q2 2021). But it did better than N9.9 billion in Q 32020.
E-business Income is now 38 per cent of UBA’s Gross Commission and Fees Income, up from 33 per cent on Q3 2020. Electronic Banking Income includes fees from e-bank transfers and fees from transactions on its mobile app, et cetera.
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Nigerian banks have focused aggressively on competitive e-banking services, gradually making them a mainstay of the revenue mix, according to Nairametrics.
Despite the surge in E-business Income, however, UBA faces stiff competition from other players, including traditional and challenger banks, all of which also want to improve earnings through the channel.
This competition reflects in UBA’s Net Income from this segment with margins of just 12 per cent.
It incurred an E-business Expense of N37.1 billion in Q3 2021 compared to N24.2 billion in Q3 2020. This means 88.5 per cent (2020: 87 per cent) of e-business Income is an expense that leaves the bank with only N4.8 billion.
Other financials
UBA announced impressive performance in its unaudited financial results for Q3 2021 filed with the Nigerian Stock Exchange (NSE), per Nairametrics reporting.
- Gross Earnings rose to N490.3 billion, up from N454.4 billion in Q3 2020.
- Operating Income grew 13 per cent year-on-year (YoY) to N331.7 billion, up from N293.7 billion in Q3 2020.
- Profit Before Tax rose 37 per cent to N123.4 billion against N90.4 billion in Q3 2020
- Profit After Tax jumped 36 per cent to N104.6 billion from N77.1 billion in Q3 2020
Annualised return on average equity for Q3 2021 is 19.2 per cent compared to 16.4 per cent in Q3 2020.
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