Kennedy Uzoka, GMD UBA


S&P Global Ratings has given United Bank for Africa (UBA) a B/B rating based on the rating agency’s interpretation of UBA’s competitive strength in the Nigerian banking market.

The agency’s latest report released on Friday showed that the bank has benefited from a strong brand franchise in the corporate and retail segments of the financial services market.  S&P also confirmed UBA’s long- and short-term ratings scale at ‘ngBBB/ngA-2’.

“Overall, we think the group has an adequate business position. Furthermore, we believe that the group will display relatively stable asset quality and good earnings generation over the next 12 months,” the report indicated.

The agency explained that it assessed the group’s capital and earnings as moderate under its risk-adjusted capital (RAC) framework.

“We estimate UBA’s RAC ratio (before adjustments for diversification) at 5.2% for year-end 2016. We project that the RAC ratio will remain broadly stable over the next 12 months on the back of the group’s good earning capacity and expected stable cost of risk. Our forecast assumptions include loan growth of around 20% (factoring in the expected depreciation of the Nigerian naira), stable interest margins, cost control, and moderate dividend distribution,” it further noted.

The Group’s capital adequacy ratio stood at 20 per cent as at September 30, 2017, which is well above the regulatory minimum of 15 per cent, while its liquidity ratio was 49 per cent. S&P reiterated that this would remain stable for the next 12 months.

“We assess UBA’s risk position as adequate, which reflects our expectation that the group will exhibit broadly stable asset quality in the next 12 months. The group’s cost of risk increased to 2.1% in 2016 compared with 0.5% in 2015, before declining to 1.2% at end-June 2017. This ratio compares well with the sector average. However, nonperforming loans (NPLs; loans overdue by 90 days or more) ratio increased to 4.2% at end-June from 3.9% at end-2016 (1.7% at year-end 2015) and was hit hard by the foreign currency shortages, which mainly affected the general commerce and oil and gas trading companies,” it also said.

The group declared a N60.92 billion post-tax profit and gross revenue of N333.91 billion in Q3 2017.

Coming on the heels of its impressive performance in the Q3, UBA is poised to end the year with a boisterous balance sheet.

Sweeping past recession troubles United Bank for Africa (UBA) has grown its third quarter (Q3) 2017 profit by 33.2 per cent, one of the strongest year-on-year earnings growth rate amongst first tier deposit money banks (DMB’s) in Nigeria.


UBA also pushed up its gross earnings by 25% from N265.5billion in Q3 2016 to N333.9billion in Q3 2017. The banks fees and commissions rose slightly from N56.215billion in 2016 to N57.885billion in the contemporary period of 2017, while its operating income leapt 29% from N183.2 billion to N236.9billion. Surprisingly the bank saw its electronic banking revenue slump 37 per cent dropping from N24.804billion in Q3 2016 to N15.605billion in the contemporary period of 2017.

The banks total assets inched up from N3.5trillion in 2016 to N3.7trillion in 2017. Its total operating expenses rose by 26% from N115.2billion the previous year to N145.6billion in 2017.  Total deposits rose by 1.3% from N2.485billion in 2016 to N2.519billion in 2017.

In half year (H1) 2017, UBA latched on to the relative stability of the foreign exchange market to strengthen its performance, resulting in shareholders smiling with 20 kobo interim dividends tucked in their wallets.

The bank’s half year performance showed a 56.19 per cent rise in post-tax profit to N42.34 billion 2017, propped by a 238.43 per cent rise in forex income to N19.62 billion and a 170.57 per cent increase in fixed income securities to N5.61 billion and a -95.70 per cent slicing of the banks forex revaluation loss to N179 million from N4.17 billion in 2016.

The country’s forex market has enjoyed visible stability since the Central Bank of Nigeria (CBN) commenced aggressive intervention in February, supplying over $10 billion into the market so far and introducing a new Forex window, the Nigerian Autonomous Foreign Exchange (NAFEX). The naira had previously reached a record N525 against the dollar in February before the regulator took measures to stem the bloodletting, which brought about convergence between the NAFEX window and the parallel market, where the currency now exchanges for between N360 and N370 to a dollar.

Commenting on the results, Managing Director, Crane Securities Limited, Mr. Mike Ezeh believes the bank’s improved performance in the third quarter was a good indication of a strong year end result.

Its dividend history shows that the bank paid 10 kobo in 2010, 5 kobo in 2011, 50 kobo in 2013, 50 kobo in 2014 , 60 kobo in 2015 and 0.75 kobo in 2016.

The Bank had earlier paid an interim dividend of 20k to shareholders this year as investor are optimistic for better dividend package at the end of year 2017

The bank’s 19 subsidiaries, reportedly has contributed more than 28 per cent to the groups bottom line in 2015. The bank repeated that with a bolder step, increasing its subsidiary contribution to the bottomline to 30 per cent in 2016. In a depressed economy with very tight regulatory and fiscal regulatory authorities, the group’s foresight helped to cushion the sad effect.



A critical assessment of the bank’s performance since August 2010 reveals that its profit has grown on a compound annual basis by 38.13 per cent; profit grew from N2.167 billion in 2010 to N47.475billion in 2010. Other relevant indicators also show that gross Earnings grew by 69 per cent from N157billion in 2010 to N265.5billion in 2016. Similarly, its total assets grew 113 per cent from N1.432trillion in 2010 to N3.056 trillion in 2016. Loans and advances to customers also grew by 168 per cent from N569.3billion in 2010 to N1.527 trillion in 2016.