The United Bank for Africa Plc at the weekend assured shareholders and investors of a more rewarding as it continues to further exploit huge resources invested across the African continent, while optimizing productivity that will enable delivery of superior returns at the end of current year.
A statement by UBA Plc, announcing its audited financials for the year ended December 31, 2018, quoted Group Managing Director/CEO, Kennedy Uzoka, as expressing confidence that its performance would be even stronger in the years ahead and shareholders would enjoy even greater dividends. For him, the result defied the relatively weak economic growth in Africa, just as earnings were positive and balance sheet grew by 20%.
This, he continued, was driven by the 23% growth in deposit funding, especially at a period of economic uncertainty, with the focus “on retail deposit mobilization, with exciting results. We recorded a 48% year-on-year growth in retail deposits and improved our CASA ratio to 77%, optimizing our funding mix, which will enhance our net interest margin (NIM), over the medium term.”
UBA, he stressed, not only gained further market share in many countries of operation, but 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.
“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% 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.
According to the audited report, UBA Plc announced a 7% gross earnings growth to N494bn, compared to N461.6bn recorded in the corresponding period of 2017; Profit Before Tax closed at N106.8bn, 2.4% up from N104.2bn in 2017 financial year. Profit After Tax inched to N78.6bn from N77.5bn recorded in 2017. Due to lower foreign exchange trading income, Operating Expenses grew by 4.1% to N197.3bn, compared to N189.7bn in 2017. Total assets grew by 19.7% to N4.9tr, just as contributions of its African subsidiaries (besides Nigeria) stood at 40 percent, in what it said confirms the strong footing of the Group’s franchise across the continent.
Also speaking on the performance, the Group Chief Finance Officer, Ugo Nwaghodoh said that the improving mix of UBA Group’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 added.