BY EMEKA EJERE
Pan African financial services provider, United Bank for Africa (UBA) Plc, has once again demonstrated operational resilience with an audited financial results for the half-year ended June 30, 2020, showing growth across key performance indices with increased contribution from its African subsidiaries.
The defiance of the challenging global business and economic environment, occasioned by a combination of the COVID-19 pandemic and oil price crash, saw the leading lender delivering growth in its gross earnings, which rose to N300.6bn from N294bn in the same period of 2019.
According to its results filed with the Nigerian Stock Exchange (NSE), UBA recorded N2.2tn in net loans to customers, representing a 6.1 per cent growth even as deposits from customers increased by 25.2 per cent to N4.8tn.
Net interest income grew by 8.4 per cent to N119.3bn, while net fee and commission income stood at N38.6bn, representing a 7.0 per cent increase compared to the similar period in 2019.
The statement also showed that as at June 30, 2020, the bank’s total assets surpassed the N6tn mark as it leaped to N6.8tn. Operating income also grew by 7.7 per cent to N197.1bn from N182.9bn, while profit before tax (PBT), fell to N57.1bn from N70.3bn in 2019, yielding a 14.4 per cent annualised return on average equity.
The bank’s shareholders’ funds remained strong at N634.7bn, up from N597.9bn in December 2019, driven by growth in retained earnings. The board of directors declared an interim dividend of N0.17 per share for every ordinary share of N0.50 each held by its shareholders.
The group managing director/chief executive officer, Mr Kennedy Uzoka, in his comment, described the half year result as another demonstration of the bank’s resilience, pointing out that the impact of inflation, depressed yield environment and exchange rate volatilities on the bank’s net earnings was anticipated.
Uzoka said “Our 2020H1 result is yet another demonstration of the resilience of our business model in an extremely uncertain and tough operating environment.
“We recorded commendable growth in our underlying business in terms of customer acquisition, transaction volumes and balance sheet whilst inflation, depressed yield environment and exchange rate volatilities impacted our net earnings as anticipated.”
Last year, the pan African financial institution recorded an unprecedented feat when, for the first time in its history, it crossed the psychological market sensitive marks of N500 billion and N5 trillion, with a 13.3 per cent year-on-year growth in gross earnings to N559.8 billion from the N494 billion posted in 2018 and 15.1 per cent growth in total assets to a record N5.6 trillion.
The results also showed that all headline numbers were up for the year with the bank’s management delivering a profit before tax of N111.3 billion.
In a statement on the results made available to Business Hallmark at the time, the bank noted that in spite of the challenging business environment in Nigeria under which it operated in 2019, it was able to raise profitability from N106.8 billion in 2018 to N111.3 billion, adding that post-tax profits rose by 13.3 per cent to N89.1 billion as against N78.6 billion in 2018.
It also disclosed that operating expenses grew by 10.1 per cent to N217.2 billion, as against N197.3 billion in 2018. This, it said, was well below average inflation rate within the period, reflecting the bank’s cost efficiency gains.
Also significant was the contribution to net earnings and total assets by the bank’s ex-Nigeria subsidiaries which saw their pie of group pre-tax profit stand at 46 per cent in 2019.
The bank said it was maintaining a tradition of rewarding shareholders with a proposal of a final dividend of 80 kobo for every ordinary share of 50 kobo for the financial year ended December 31, 2019., adding that the final dividend, which is subject to the affirmation of the shareholders at its annual general meeting, would bring the total dividend for the year to N1.00, as it had paid an interim dividend of 20 kobo earlier in the year.
Other details of the 2019 financials showed that the bank saw a 20.2 per cent growth (to N2.1 trillion) in loans to customers, whilst customer deposits increased by 14.4 per cent to N3.8 trillion, compared to N3.3 trillion recorded in the corresponding period of 2018.
“This reflects increased customer confidence, enhanced customer experience, early wins from the ongoing business transformation programme and the deepening of its retail banking franchise,” it explained.
UBA also revealed that it had been deploying innovative lifestyle products to expand its market share across sub-Saharan Africa, leveraging its presence in the United Kingdom, United States of America and France, to build a true Africa’s global bank, facilitating trade and capital flows between Africa and the rest of the world.
Mr. Uzoka had noted that the year 2019 was important for UBA Group, as it gained further market share in most of its countries of operation.
He said, “The year 2019 was a very remarkable one for UBA given the adverse market developments. Nonetheless, we achieved sizable growth in balance sheet and earnings, even as we reposition the bank for the future.
“Gross earnings crossed the N500 billion threshold to N559billion, whilst total assets also crossed the N5 trillion mark for the first time to N5.6trillion. Our strategy remains centred around unparalleled service to our esteemed customers. Accordingly, we are making significant investments in a technology-driven transformation journey.
“We have recorded early gains as shown in the 39% growth in electronic banking income to N38.8bn in 2019 from N27.9bn in 2018. Our businesses are gaining commendable share in their markets across regions in Africa, as we deepen the scale and scope of our operations.”
Uzoka also said; “I am indeed excited about the synergy we have built within the UBA Group and the significant progress we have made in our transformation drive. We have positioned the bank as a truly pan-African banking franchise, leveraging our operations in France, the UK and the USA, to deepen intra-African trade, and facilitate capital flows between Africa and the rest of the world.
“In 2020, we will pursue aggressive deepening of market share in all our subsidiaries, leveraging technology, rich human resources and our customer-first strategy to win in all the markets we operate, notwithstanding the challenges of our operating environment”.
Little wonder, in further demonstration of its unalloyed commitment to ensuring premium services as well as reaffirming its dominance across Africa, , UBA, in May, disclosed that it had invested significantly in cutting edge technology in a bid to boost its overall service offering to customers.
To reinforce its commitment to first-rate experience, the lender introduced numerous unique features on its mobile app and other digital platforms that set it apart, allowing customers carry out banking transactions seamlessly across all channels.
Disclosing the features in an online press conference, intended to keep customers informed about the bank’s efforts in enhancing their experience through its digital platforms, Samson Aneke, group head, Digital Banking at UBA, noted that the bank had taken steps ahead of its peers to navigate alternate banking channels in a bid to serve its customers better amid the COVID-19 pandemic and beyond, even as it braces for the challenges of the new normal as a result of the pandemic.
Aneka said, “In recent times, we carefully observed what people encountered after the day the federal government eased the lockdown intended to flatten the COVID 19) curve.
“It was a terrible experience where customers crowded many banks to access their funds. So we on our own decided to use that experience to further improve on our alternative channels in a bid to enhance customers’ experience.”