UBA Earnings Hits N494bn, Records Significant Asset Growth,

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UBA Earnings Hits N494bn, Records Significant Asset Growth,
Driven by Market Share Gains Across Africa
·
Records Profit of  N106.8 billion
 
 The
Pan-African financial institution, United Bank for Africa Plc has announced its
Audited 2018 Financial Results with impressive growths achieved across major
financial lines.

 

 
According to the 2018 financials filed at the Nigerian Stock Exchange on
Tuesday, the Africa’s global bank’s gross earnings grew by 7.0 percent to N494.0 billion, compared
to N461.6 billion
recorded in the corresponding period of 2017. The Bank’s total assets also grew
significantly by 19.7 percent to an unprecedented N4.9 trillion for the year under review.
These results, according to financial analysts largely demonstrates the
benefits of the Group’s Pan-African footprints with continued growth in market
share in key countries of operation across Africa. The contributions of
ex-Nigeria subsidiaries at 40 percent, again confirms the strong footing of the
Group’s franchise in Africa.
Despite the challenging business environments in Nigeria and across key
markets in Africa, the Bank’s Profit Before Tax was quite impressive at N106.8 billion, a 2.4
percent growth, compared to N104.2 billion in 2017 financial year. In same
vein, the Profit After Tax rose by 1.4 percent to N78.6 billion, compared to N77.5 billion recorded
in 2017. Due to lower foreign exchange trading income, Operating Expenses grew
by 4.1 percent to N197.3 billion, compared to N189.7 billion in 2017
Reflecting the modest appetite of the Bank in the year under review as
well as impact of IFRS 9 implementation, net loans recorded a prudent 3.9
percent growth to N1.72 trillion while Customer Deposits increased by a
remarkable 22.5 percent to N3.3 trillion, compared to N2.7 trillion recorded in
the corresponding period of 2017, reflecting increased customer confidence and
enhanced service channels.  Furthermore, Shareholders’ Funds decreased
marginally by 4.8 percent to N502.6 billion, reflecting the impact of
International Financial Reporting Standards 9 (IFRS 9) implementation.
Commenting on the result, the Group Managing Director/CEO, Kennedy Uzoka
noted that the year 2018 was important for the Group, as it gained further
market share in many countries of operation. More so, the CEO was excited at
strategic achievements made in the year, including the start of wholesale
banking operations in London, as it seeks to leverage the Group’s unique
network across Africa. UBA also opened its 20th African operation.
 
“Defying the relatively weak economic growth in
Africa, earnings were positive and we grew our balance sheet by 20 percent,
driven by the 23 percent growth in our deposit funding. In a period of economic
uncertainty, we have focused on retail deposit mobilization, with exciting
results. We recorded a 48 percent year-on-year growth in retail deposits and
improved our CASA ratio to 77 percent, optimizing our funding mix, which will
enhance our net interest margin (NIM), over the medium term,” Uzoka said.
Uzoka remained confident that the Bank’s performance
would be even stronger in the years ahead and shareholders would enjoy even
greater dividends, as the Group is well positioned to take advantage of
imminent fiscal reforms across many economies in Africa, a positive outlook
which should stimulate new opportunities in infrastructure, manufacturing,
agriculture and resource sectors.
He continued: “Our operations in the United Kingdom
now offer end-to-end trade, treasury, structured finance, wholesale deposit
taking and ancillary services. With this development, we are better positioned
to fulfill our aspiration of deepening trade and capital flows between Europe
and Africa. We are also pleased with the market acceptance of our new operation
in Mali”.
“Having said this, I am excited by the profitability
of our ex-Nigeria subsidiaries, which now contributes an impressive 40 percent
earnings to the Group. At the moment, our Nigerian business is benefiting from
our product and operational focus, gaining market share – most importantly, the
increasing penetration of our retail offerings is reassuring, as this
fundamental progress aligns with our strategy of focusing on sustainable
growth”.
“With great optimism, we look forward to a more
rewarding 2019 for our shareholders, as we further sweat our resources and
optimize productivity towards delivering superior returns,” he concluded.
Also speaking on the performance, the Group CFO, Ugo
Nwaghodoh said that the improving mix of the Bank’s funding base and asset
pricing, reinforce a positive outlook on Net Interest Margin(NIM) and broader
balance sheet efficiency.
“Whilst considerable investment in people, digital
transformation and channel enhancement masked cost efficiency gains within the
year, with cost-to-income ratio at 64 percent, we are convinced that our
diligent execution of new initiatives will ensure the reduction of Cost to
Income Ratio(CIR) towards our medium-term target. Our balance sheet is being
positioned to take full advantage of market swings and our strong 25 percent
capital adequacy ratio provides headroom for growth, even under a BASEL III
scenario. As it stands, UBA has started the year on a good note and should
sustain the momentum, as we work towards improving our Return on Average Equity
(RoAE),” Nwaghodoh said.
United Bank for Africa Plc is a leading pan-African
financial services group, operating in 20 African countries, as well as the
United Kingdom, the United States of America and with presence in France.
UBA was incorporated in Nigeria as a limited liability
company after taking over the assets of the British and French Bank Limited who
had been operating in Nigeria since 1949. The United Bank for Africa merged
with Standard Trust Bank in 2005 and from a single country operation founded in
1949 in Nigeria – Africa’s largest economy – UBA has become one of the leading
providers of banking and other financial services on the African continent. The
Bank which was awarded the Best Digital Bank in Africa by the Euromoney awards
in 2018, provides services to over 17 million customers globally, through one
of the most diverse service channels in sub-Saharan Africa, with over 1,000
branches and customer touch points and robust online and mobile banking
platforms.

 

The shares of UBA are publicly traded on the Nigerian
Stock Exchange and the Bank has a well-diversified shareholder base, which
includes foreign and local institutional investors, as well as individual
shareholders.

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