UBA reports N70bn profit for H1 2022
Oliver Alawuba, GMD, UBA

OKEY ONYENWEAKU

Investors in the United Bank for Africa, UBA have expressed their excitement over the management’s strategic manner of rejigging its’ operational processes. This is coming on the heels of the bank announcing a new management team headed by Oliver Alawuba as the new Group Managing Director.

In his new role, Alawuba would oversee all the Group’s banking operations across its twenty African country network and globally in the United Kingdom, the United States of America, France, and the United Arab Emirates.

 

A statement signed by Group Company Secretary, Bili Odum explained that Alawuba succeeds Kennedy Uzoka, who retires from the Group Board, after several years working at UBA.

The statement explained that UBA Africa serves over 19 million customers across the African continent, providing retail, commercial and institutional banking services, leading financial inclusion and implementing cutting edge products including the first ever banking chat Bot in Africa, Leo.

Mr. Alawuba has close to three decades of banking industry experience. He was once the CEO of UBA Ghana and rose to become Regional CEO, UBA Africa before returning to Nigeria to run UBA’s East Bank.

Under his leadership, UBA’s Nigerian East Bank division became the fastest growing regional bank in the Group. The Board further appointed Senegalese national, Abdoul-Aziz Dia as Executive Director for Treasury and International Banking, subject to the approval of the Central Bank of Nigeria. Aziz becomes the first non-Nigerian Group Executive Director of the Bank, bringing a wealth of multi geographical experience to the Group. Mr. Dia will be responsible for UBA’s global network of operations in New York, London and Paris, together with United Bank for Africa Plc.

Chukwuma Nweke, currently the Executive Director Operations, was confirmed by the Board as the Group Executive Director, Retail and Payments, demonstrating the Group’s commitment to its retail offering.

Chuks has close to three decades of banking experience spanning Banking Operations, Finance, Technology, Audit and Strategy. The Board also announced the appointment of Chiugo Ndubuisi as Group Executive Director and the Group Chief Operating Officer, subject to the approval of the Central Bank of Nigeria. Chiugo is a professional with almost three decades of banking experience that includes the role of CFO and Executive Director on the Board of a financial institution. His in-depth understanding of banking and finance industry dynamics will bring a lot of value to the Group Board of UBA.

Speaking on the appointments, Group Chairman Tony O. Elumelu said “These appointments emphasise the Group’s commitment to our panAfrican and global network, our huge retail client base and our operational infrastructure. We are focused on improving our efficiency and further strengthening our pan-African mission, using the extraordinary pool of talent and experience available in the Group.”

Elumelu thanked both the outgoing Deputy Managing Director/CEO, UBA Africa, Mr. Victor Osadolor, and the former Regional CEO for UBA in East and Southern Africa, Emeke Iweriebor, who just retired from the Board, for their contributions to the Bank.

“Victor and Emeke were key players during the merger of Standard Trust Bank and UBA and have been valuable contributors to the growth of the Bank. We wish them well”.

According to the statement, the Board appointments underline UBA’s broader commitment to investing in the highest quality human capital. The Bank recently reformed its grade structure and technology teams, having reduced its grade structure from 16 to 12 levels, at the end of 2019. The Bank welcomed 3,000 new staff members in 2019 and promoted over 5,000 employees. UBA is the largest employer in the Nigerian banking sector, with a staff strength of close to 20,000 employees group wide.

Managing Director, BIC Consultancy Services, Dr. Boniface Chizea, told Business Hallmark that UBA has always had a strong, focused and professional management that knows where it is headed.

He noted that the bank’s quality management is always conscious putting the right people at the right positions for optimum performance.
Experts agree that organizational change is necessary for companies to succeed and grow. They also say that change in management drives the successful adoption and usage of change within the business.

UBA group is one of the strongest financial institutions that has successfully taken care of its succession planning without rancor.
Alawuba’s predecessor, Kennedy Uzoka pushed UBA to enviable heights from where the former Group Managing Director, Mr. Philip Oduoza who managed the bank at a most turbulent time.

The lender has remained formidable in the midst of many odds.

In fact, in the previous years’ its strong performances have also provided a sturdy base for the vigour and strength which the lender has displayed.

Analysts are bullish on the bank which has shown vigour and promise.

One other significant thing about UBA is that it has long left many of its contemporaries behind and stands out as a leader.

From a comfortable position in the year end 2021, the pan African institution has raked in N44.484 billion in Q1 2022, representing 8.76 per cent over the N40.581billion in 2021. Its Net interest income advanced by 14.10% from N74.38 billion to N84.87 billion in the current period.

Market observers admit that the bank’s growth rode on the back of income from interest, trading income and fees and commission income, which all appreciated year on year. Details show that net income from fees and commission rose 19.30 per cent to N24.30billion from N20.366billion in 2021.

At the end of business in the first quarter, the bank also grew its deposits from customers by 4.47% to N6.65 trillion while its total assets are now put at N8.89 trillion. At the same time, Net assets rose 2.60% to N825.75 billion.

Total operating expenses grew 20.4 per cent from N64.545 billion in 2021 to N77.642billion in 2022, Earnings per share for the period was reported as N1.14, a 9.62% increase from the N1.04 reported a year earlier in 2021.

Overall, UBA’s net operating income after impairments still appreciated by 16.33% to stand at N121.71 billion despite the 223 per cent spike in loan losses.

To its credit, the bank harnessed and efficiently deployed its Electronic banking channel and raked in N15.11billion representing 21.04 per cent increase from N12.48million in Q1,2021.
The tier 1 bank had also impressed its shareholders with its end of year performance in 2021.

At the end of the 2021 financial year, UBAs Profit Before Tax was impressive with a 20.3 percent growth to N153.1 billion, compared to N127.3 billion at the end of the 2020 financial year; while Profit After Tax rose grew by 8.7 percent to N118.7 billion in 2021, compared to N109.2 billion recorded the previous year.

As a result, the Bank proposed a final dividend of 80 kobo for every ordinary share of 50 kobo for the financial year ended December 31, 2021, bringing the total dividend for the year to N1.00 as the Bank had earlier paid an interim dividend of 20kobo.

In the last five years UBA has expanded in all measurement indicators. In the area of profit before tax, the bank posted a profit of about 50 per cent in the last five years from 2017 to 2021.

While its Profit Before tax grew from N104.2billion in 2017 to N106.76billion in 2018, N111.28billion in 2019, N127.25billion in 2020 and N153billion in 2021, shareholders are optimistic that there will better yield at the end of 2022.

Analysts believe that the new management will spur UBA to better and higher achievements.

Operating environment

Though, the price of crude has hit $100 and above, the times are still tough. Analysts believe it has become hard for firms to fly in such weak economies as Nigeria: where the economy which has just crawling despite the GDP growth of 311% with no significant impact on the lives of the people ; where inflation is hitting the roof top at about 18.6 per cent; where the Naira has lost value and vigour; where the budget deficit stood at -3.64% of GDP; where insecurity has halted business activities in some parts of Northern Nigeria and South East and many have been killed; where unemployment remains very high; where government is unstable;the countries debt has hit N45trillion; and where economic policies are done to favour a section of the country.

Recently, the government also hiked the prices of fuel and electricity for the masses of the country which has more 100million of its population in the poverty bracket.
‘’Who would expect companies to perform magic in a country where its citizens appear to have lost hope’’, a senior civil servant who would not want to be mentioned in print.

”A very challenging time to run a financial institution, however, it also offers a chance for those, who drive to showcase their big capacities,” an analysts who would not want his name mentioned in print said.

But the likes of UBA which have been resilient, innovative and target oriented have pushed against the head winds to remain strong. This has been reflected in its performance over the years.

Managing Director of HighCap Securities Ltd, Mr. David Adonri, told Business Hallmark that UBA’s stock price was very attractive.

‘’UBA’s P/E Ratio is not bad at all. What P/E Ratio means is if you buy that stock now at the current price, it could take you about 4 years or 3 years and 3months to recoup your investment on that stock. I think UBA stock is at good one at that P/E Ratio. An average P/E ratio that will make a stock attractive is usually about 5, that means that if you buy now you will recoup your money in five years. But generally the stock market is a long term market so in other countries, and particularly in mature markets they are actually looking at returns over a long time. In mature markets it actually takes about 10 to 20 years to recoup your investment. Ours here is below 10 years. 10 years is good. So UBA’s stock is attractive.’’

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