Post Views: 118 UBA Assures Shareholders Of Juicier Dividend Payout Nigerian shareholders, on Tuesday, lamented the rising operating costs among banks...
UBA Assures Shareholders Of Juicier Dividend Payout
Nigerian shareholders, on Tuesday, lamented the rising operating costs among banks in the country, saying such is not only denying them adequate returns on their investments but stifling growth and even killing entrepreneurial spirit.
The shareholders noted these burgeoning costs to include multiplicity of taxes including company income and the 10% withholding taxes on dividend paid out, in addition to contribution to the Asset Management Corporation of Nigeria (AMCON) sinking fund, deposition insurance premium payable to the Nigeria Deposit Insurance Corporation (NDIC) and other costs incurred in the ordinary cause of their business undertakings.
Speaking during the annual general meeting of United Bank for Africa Plc, bemoaned a situation where the regulators have refused and even failed to practice what they preach, given that neither the Central Bank of Nigeria (CBN), the primary regulator of banks in the country, NDIC and AMCON have published their audited financials for years now and yet continue to penalize operators for every kind of infraction.
Commenting on the financials of UBA Plc for the year ended December 31, 2018, Boniface Okezie, a shareholder group leader applauded the group for performing wonderful and offering 85 kobo per share dividend, despite the harsh operating environment.
He wondered how much the group would have paid out to shareholders, but for the N51.15bn paid as deposit insurance premium and sinking fund contributions to the NDIC and AMCON respectively in the review period.
For him, it does seem, shareholders who put their money to fund the business are indeed “working for the regulators.”
Continuing, Okezie lamented: “the cost of operation is killing enterprises and stifling their growth… we are worried.
“We need to find a way out of these challenges,” he told fellow shareholders, urging the government and its institutions not to kill institutions, even as he prayed for the bank to continue growing from strength to strength in the face of such daunting challenges.
Also commenting, Dr. Farouk Umar, leader of a Kano State shareholder group praised the board and management of UBA Plc for the foresight to diversify outside its operations outside of Nigeria, thereby de-risking its balance sheet. He expressed happiness also that the African operations (beside Nigeria) have continued to grow total contributions to the top and bottom line in a healthy manner.
He challenged the board to overcome the operational challenges and graduate to the league of banks paying N1.00 and more by the end of the current financial year. He also urged the management to work towards a zero-charge on automated teller machine environment so as not to be caught unawares.
Still on the contribution of the African subsidiaries, Nona Awoh applauded the efforts of the management of UBA Chad and Congo for consistently driving their bottom-line up over the past four years, just as that of Cameroon recorded the biggest top-line growth last year. He challenged the management of UBA Ghana to restrategize, given that their contribution to profit has dropped.
Beyond urging components of the growth to work harder, the continued sterilizing of huge bank funds by the CBN under the guise of Cash Reserve Requirement is unhealthy and needs to be reviewed.
The apex bank, he said has sterilized N1.7tr from three banks so far and is not paying any interest on such funds, describing it as a disincentive to encouraging a savings culture in the country.
He urged shareholders to imagine what UBA’s top, bottom-lines and dividend payout would be if CBN paid 3% or 2% interest on the quarantined funds.
Awoh, however, challenged the management to address the humongous N10.7bn unclaimed dividend sitting in the books of UBA Plc over the last nine years, expressing worry that it bloated from N7bn at the end of 2017.
Reacting, Group Managing Director of UBA Plc, Kennedy Uzoka assured that the bank is well positioned and diversified to take opportunities the African continent offers today and in the future.
He assured that UBA is a banking group like no other and that the decision to obtain a full-fledged banking license in the UK was to ensure that the group locks its income within its network.
As part of ensuring enhanced returns from its subsidiaries, the group recently appointed Victor Osadolor, the Group Deputy MD as chief executive of UBA Africa (all 20 African subsidiaries besides Nigeria).
Osadolor noted that Africa contributed 42% to the group profit, urging shareholders to expect much more, given that the Gross Domestic Product (GDP) of the rest of Africa at $480bn is more than Nigeria’s $400bn.
“This means there is a lot of potentials in Africa we are taking advantage of. The board has positioned the group for the next 70 years and beyond,” he added.
He urged investors to prepare, as “the share price of UBA Plc over the next five years will make some people millionaires.
“We are confident because we have probed the numbers… because opportunities are equally in other countries.”
With all of these in mind, while responding to shareholders’ clamour for juicier dividend payment, Osadolor assured that “kobo-kobo dividend is forever banished.”
Meanwhile, reviewing the year’s performance, group chairman, Tony Elumelu, applauded the management for reinforcing winning strategies across the group’s diversified operations, just as the impressive performance reinforces the strength of the brand. He expressed happiness at the growth in the retail business which now provides more than half of the group’s deposits, which is a stable and low-cost source.
Photo Caption: Tony Elumelu, chairman, UBA Plc (middle), addressing shareholders at the 2019 annual general meeting in Lagos on Tuesday, April 23, 2019, with him are Kennedy Uzoka, the GMD (left) and Billi Odum, the company secretary (right).