UBA Grows Gross Earnings By 16%, Delivers 17% Return on Average Equity

…Sustains Interim Dividend

AgegePulse

Africa’s leading financial institution, United Bank for Africa Plc has announced its audited 2018 half year financial results, showing strong growth across key performance metrics as well as a significant contribution from its African subsidiaries.

Despite declining yield environment in two core markets, Nigeria and Ghana, the pan Africa financial institution delivered double digit growth in gross earnings, as itrecorded a 16 percent year-on-yearrise in top-line to N258 billion,compared to N 223 billion recorded in the corresponding period of 2017.This performance, according to analysts, underscores the capacity of the Group to deliver strong performance through economic cycles, even in a challenging business environment.

According to the report filed to the Nigerian Stock Exchange on Wednesday, UBA, reported strong growth in operating income at N168.5 billion, compared to N161.8 billion in the first half of 2017, an increase of 4.1 percent. Notwithstanding the inflation-induced cost pressure in the period, UBA finished the first half of the year strongly, with a Profit Before Tax ofN 58.1 billion.
The Profit After Tax also improved to N 43.8 billion, a 3.4 percent growth compared to N 42.3 billion achieved in the corresponding period of 2017. The first half of the year profit, translated to pre-tax and post-tax return on average equity of 23% and 17% respectively.

UBA’s foreign operations continue to grow in importance, contributing 40% of the Group’s profit, which according to analysts attests to the benefit of UBA’s pan-African strategy and reinforces the Bank’s objective of achieving 50 percent earnings contribution from offshore subsidiaries.

In the first six months of the year, the Bank’s Total Assets grew 4.9% toN 4.27 trillion and Customer Deposits rose by 6.1 per cent to N 2.90 trillion, compared to N 2.73 trillion as at December 2017. This growth trajectory underlines UBA’s market share gain, as it increasingly wins customers through its re-engineered customer service and innovative digital offerings. The Group’s Shareholders’ Funds remained strong at N 496.3 billion, even as implementation of IFRS 9 impacted the total equity of the bank and its peers.

In line with its culture of paying both interim and final cash dividend, the Board of Directors of UBA Plc declared an interim dividend of N0.20 per share for every ordinary share of N0.50 each held on the qualification date – Wednesday, September 05, 2018.
Commenting on the results, the Group Managing Director/CEO, United Bank for Africa Plc (UBA), Mr. Kennedy Uzoka said:  “Our performance in the first half the year reflects the resilience of our business model and strategies. Despite declining yields in two core markets, Nigeria and Ghana, we delivered double digit growth in gross earnings. Our performance demonstrates the success of our digital banking initiatives and broader Customer-First strategies”
“We are integrating banking to our customers’ lifestyle, simplifying processes for routine transactions and driving financial inclusion by making banking services accessible and affordable. We are creating opportunities for wealth creation and economic progress, as we empower our customers through innovative platforms and solutions that support their personal and business growth. Our commitment to delivering excellent service is paying-off, as we increasingly win a bigger share of customers’ wallet across our chosen markets. We won the highly coveted “Africa’s Best Digital Bank” Award by Euromoney, demonstrating our pioneering initiatives are being recognised with Leo, our digital banker having been name checked by Mark Zuckerberg ” Uzoka said.

“Our enhanced asset-liability management strategies improved asset yield and grew interest income by 21% despite prevailing yield environment. Our re-engineered sales structure provided the impetus for renewed retail deposit growth. I am particularly pleased by the 24% year-to-date growth in retail savings and current account deposits, underpining the increasing penetration of our digital offerings and the Group’s overarching goal of democratizing banking across Africa. We improved net interest margin to 7.4%in line with our 2018 target, notwithstanding strong competition for wholesale deposits and the impact of rising global interest rates on our foreign currency funding,” he concluded
Also speaking on UBA’s financial performance and position, the Group CFO, Ugo Nwaghodoh said; “We finished the first half of the year in a stronger position and we are optimistic on the future of our business. Amidst economic recovery and uncertainties in Nigeria, our largest market, we grew net interest income and operating income by 9.6% and 4.1% respectively. We doubled revenue from trade services and grew e-banking income by 24%, a testament to our market share gain, which is driven by innovative offerings. Our foreign operations contributed 40% of Group’s profit, underlining the benefit of our Pan-African strategy.
“We sustained our asset quality, with cost of risk at 0.8%. Whilst the loan book declined by 6.5% due to prepayments from some customers in Nigeria and Ghana, we grew the overall balance sheet by 5% in the first half of the year. The Group’s capital adequacy ratio of 23%, Bank’s liquidity ratio of 48% and loan-to-deposit ratio of 57% all reinforce our capacity to grow, with ample headroom for risk asset creation,” Nwaghodoh said.
In recognition of UBA’s dominance in Africa’s digital banking space, UBA emerged the Best Institution in Digital Banking across Africa, courtesy of Euromoney. Earlier in the year, UBA launched Leo, an e-chat service using artificial intelligence to help customers execute transactions on Facebook, the first of its kind in Africa. The Bank is set to replicate the success of Leo on WhatsApp on September 1st, bringing convenience to its growing youthful customer base across Africa.
UBA is one of Africa’s leading banks with operations in 20 African countries. It also has presence in the global financial centres; London, New York and Paris. UBA provides banking services to more than 15 million customers globally, through diverse channels.

EFCC mocks Fayose, says we’re expecting you soon

The Economic and Financial Crimes Commission has lampooned Governor Ayodele Fayose of Ekiti State after the failure of his preferred candidate, Prof. Kolapo Olusola, at the polls.

The EFCC said in a tweet that with Fayose’s tenure ending in less than three months coupled with the loss of his immunity, he should begin to prepare to visit the commission.

The commission hinted that investigation into Fayose’s alleged N1.3bn poultry project during his first term from 2003 to 2006, would be reopened and the prosecution would be able to continue

The tweet read, “The parri (party) is over; the cloak of immunity torn apart and the staff broken.

“Ekiti Integrated Poultry Project/Biological concepts Limited N1.3bn fraud case file dusted off the shelves. See you soon.”

However, a large section of Nigerians on Twitter accused the EFCC of being unprofessional and fighting a one-sided anti-corruption war.

The anti-graft agency subsequently deleted the tweet.

Fayose has been having a running battle with the EFCC since 2007 but it intensified in 2016 after it was discovered that the governor, while running for office in 2014, allegedly received over N1.3bn from the then Minister of State for Defence, Musiliu Obanikoro, who is now a member of the All Progressives Congress.

The money was said to have emanated from the account of the Office of the National Security Adviser, Col. Sambo Dasuki (retd.), who has been in detention for nearly three years.

Fayose’s aide and trusted ally, Abiodun Agbele, who allegedly received the money from Obanikoro, has since been arraigned by the anti-graft agency while all of Fayose’s accounts have been frozen.

The governor was, however, untouched due to his immunity.

Obanikoro has, however, been converted to a prosecution witness and will be expected to give evidence against the governor when his tenure ends.

With Fayose’s tenure coming to an end on October 16, 2018, his case is expected to be immediately reopened.

Punch

Exclusive:Encourage MSMEs Through Low Interest Loans - Bountiful Charges

Popular Agege's golden daughter, Mrs. Busayo Taiwo Adelanwa a. k. a Bountiful is in the news. This time it's not about community works with Elephant Club of Ogba or philanthropic engagement with Rotary Club, rather, it is an exquisite exhibition of her prowess in the business and financial sector.

She stressed that it's obvious that capital is the opium of any business but MSMEs suffer a lot because of their inability to service humongous credit facilities often offered by financial institutions.

Mrs Adelanwa who is the Convener of Bountiful Foundation, a business consultant and social worker while responding to questions on a TV programme (AM Chat of MITV) themed: Doing successful business in an unpredictable economy like Nigeria, she said it's high time financial institutions began to encourage Small and Medium Scale Enterprises with little interest soft loans if the country truly wants to build a self reliant economy.

Bountiful Highighted some areas which young  entrepreneurs need to envision before dabbling into any venture. she said they need to identifying a need, study the need to understand it (through feasibility studies, business ideation, business concept development, business planning, skill acquisition, internship and apprenticeship, market analysis, industry analysis), then feed the need sustainably and excellently (i.e product or services).

"In case of capital challenges, seek support from friends, families and folks. When you exhaust your lower hanging fruits, seek partnership, equity investors, angel investors, loan, grant." She asserted.

The social worker advised prospective businessman to make contractual agreements they can achieve,  "all agreement must be  win-win and keep all contractual agreement intact."

Thereafter, Bountiful urged government to ensure creating an enabling environment for business to flourish saying that "Chinese or Lebanese investors come into Nigeria with only a brief case and cart away money in containers.The briefcase on arrival is a cheque of international loan at a very low interest rate with longer moratorium yet he gets tax holidays here which indigenous investors may not get."