United Bank for Africa (UBA) said its profits for the first half of the year increased more than five times compared to the same period in 2022, as a weakening in the value of the naira in June helped strengthen profits.

The lender, one of the country’s five largest by assets and by market value, earned N418.3 billion in net trading and foreign exchange gains during the period, when net profit accelerated to N378.2 billion from N70.3 billion. . .

UBA’s sterling result is the latest among Nigerian banks holding foreign currency-denominated assets, which dramatically became a windfall for those lenders after the country allowed its currency to fall by around 40 percent against the dollar in June as part of measures to win back foreign investors.

Dollar loans accounted for more than half of UBA’s N4.5 trillion loans and advances to customers at the end of June, according to the bank’s audited earnings report released on Tuesday. The UBA operates in at least 20 African countries as well as offices in London, Paris and New York.

“Foreign exchange income comprises trading income on foreign exchange and gains and losses on revaluation of trading position,” the UBA said in its financial report.

Its Tier 1 peers, FBN Holdings, GTCO and Zenith, had similarly leveraged gains from revalued foreign assets as an anchor for record profits. The financial report of Access Holdings, the country’s largest lender, will be published soon.

Net interest income for the period rose 56.7 percent to N278.1 billion, riding the wave of interest rate increases in Africa’s largest economy that is helping lenders charge more for loans .

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But banks are paying for it in another way as loan defaults continue to rise. The UBA increased its credit loss impairment charge on loans by more than twelve times to N143.9 billion.

Profit before tax amounted to N403.6 billion compared to N85.8 billion a year ago.

In a separate statement released on Tuesday, UBA announced an interim dividend of N0.50 per share, a 150 per cent increase from what it declared in the same period last year. That translates to a payment of N17.1 billion.

The stock has returned 81.6 percent since the beginning of the year.