QUARTER RESULTS (3): UBA; Zenith Bank and Secure Electronic Technology by March 2016.

UBA: A LITTLE STRONGER.

If the first quarter is anything to go by, then United Bank for Africa UBA PLC is heading for more strength this year but mainly on the back of lower interest cost and some foreign exchange related goodies.
According to the figures for the quarter to March released this week, fee and commission would have counted amongst the sources of strength but for 12.6% increase in this income to N15299m that was accompanied by 20.9% rise in the attached expense to N2376m.
In the case of interest income, UBA actually reported 6.35% drop to N54941 but the strength came from 26.4 decrease in interest expense to N20520 thus leading to 11.8% increase in net interest income.
From foreign exchange dealings in the quarter, UBA realised N923m gain compared to N777m loss there previously.
Note that to arrive at figures stated by Henates below adjustment was made for this gain and changes in fair value of financial assets in UBA gross earnings and stated profit after tax to be consistent with our house style.
In the end, from our calculation, UBA ended the quarter with 21.1% profit margin which was certainly an improvement on 20.3% previously in spite of 71.1% drop in net trading income to N2364m: 42.3% decrease in Other operating income to N1530m and despite decreases in personnel and Other operating expenses that did not match gross earnings drop.
Also noteworthy was the fact that the strength recorded was in spite of far higher drop in fair value of financial assets that resulted in N3196m loss compared to N739m loss in same by 2015 first quarter.

UNITED BANK FOR AFRICA (Nm)
                    First quarter.
                          16.               15
G. Earnings*  75057.         83098
Int. Income.   54941.         58669
Int. Expense.  20520.         27886
Commission  15299.         13590
Comm.exp.     2376.            1965
Net trading.     2364.            8189
Other op. Inc.  1530             2650
Impairment.    1003.            2342
Personnel.     13803.         14013
Other op. Exp 16334.         16603
Forex gain        923.            (777)
Fair value gain (3196).       (739)
Profit b4 tax*  15810.       16873
Profit margin % 21.1.         20.3
* These figures were adjusted by recognising as income and loss forex and fair value changes stated by UBA AFTER its statement of profit. This is because we recognise all streams likely to occur annually as part of gross income or loss.

ZENITH BANK PLC: CORE CONTROL

Zenith Bank plc , from the unaudited figures for the first quarter to March released this week seems set to reap bountifully from good grip on its core income stream in spite of even fairly high impairment provision.
According to the figures, interest income grew by a modest 3.39% to N84177m while attendant cost headed 32.9% in the opposite direction to N26020m compared to N38790m previously.
That of course, led to  a hefty 36.4% increase in net interest income to N58157m.
In view of this, and aided by 33.3% increase in share of profit from associated companies, Zenith still had its eyes fixed up there  despite 134.9% dive into trading loss of N1893m, 23.2% increase in impairment provision; 84% tumble in Other income and 9.01% decrease in fee and commission.
It was also helpful that Other operating expenses went down by 10.1% to N19287m although 9.23% increase in personnel cost to N16885m did the opposite.
In the end, after adjusting for fair value change and other stated income for the period, Zenith cruised to 32.5% profit margin by March this year compared to 29.1% at the same time in 2015.

ZENITH BANK PLC (Nm)
                First quarter
                         16.                15
G. Earnings*  99334.          114377
Int. Income    84177.            81421
Int. Expense.  26020.           38790
Net Interest   58157.           42631
Impairment.   2577.             2090
Commission 15668.           17219
Trading inc.   (1893).             5423
Other income 1483.              9259
Share of profit.   48.                  36
Fair value gain 157.                425
Other gains.       (10).              630
Profit b4 tax* 32268.          33333
Profit margin % 32.5.            29.1
* like in the case of UBA above these figures were adjusted by Henates to recognise fair value gain and other gains not stated in gross earnings by Zenith.

SECURE ELECTRONIC TECHNOLOGY PLC: NICE GRIP BUT...

Secure Electronic Technology PLC apparently put in very good effort to control its administration cost during the first quarter to March but the odds offered by direct costs continued to dictate the tune.
According to the first quarter results released this week, the company increased its gross income by 6.76% to N 1904.6m while depressing its administration cost by 16.8% to N60.1m but its gain on each N100 income still eased to N1.10 from N1.27 by 2015 first quarter.
The main obstacle, of course remained the slim gross margin after 10.5% increase in winnings to N1127m aided by 4.03% rise in dealers commission to N695.2m.
Above all, finance charges closed the quarter with a winged flight to N510000 from N140000 previously and compared to N700000 for the whole of 2015 year.
However, the liquidity position of the company continued to improve although at snail speed and is yet to break out of deficit working capital.

SECURE ELECTRONIC TECHNOLOGY PLC (Nm)
                     First quarter
                       16.                15
Gross income 1904.6.      1783.9
Winnings         1127.7.      1020.6
Dealers Comm. 695.2.       668.3
Administration.    60.1.         72.2
Finance cost.        0.51          0.14
Profit before tax. 21.0.          22.7
Profit margin %   1.10.          1.27
Working capital (464.8).    (486.2).

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