UBA boosts assets quality with $500m 5-year Eurobond redemption

BY EMEKA EJERE

Africa’s global bank, United Bank for Africa (UBA) has further demonstrated robust and prudent liquidity management capacity, with the redemption on Wednesday of its debut $500 million 5-year Eurobond notes with the maturity date of June 8, 2022.

Issued in 2017, the five-year bond was offered at a coupon rate of 7.75%, and raised to support the Bank’s business in key sectors of the economy.

As part of UBA’s liability management strategies, in November 2021, the bank repurchased $310.9 million of the notes through a cash tender offer. Upon maturity of the Eurobond, the outstanding portion of $189.1 million and the coupon of $7.3 million were redeemed by the bank.

“The development is a testament to UBA’s robust and prudent liquidity management strategies, coupled with a very strong and diversified asset and liability management process”, said Kennedy Uzoka, Group Managing Director/Chief Executive Officer at UBA.

“This is in spite of macroeconomic headwinds underpinned by FX illiquidity, double-digit inflation and currency devaluation.

“Our huge customer base, diversified geographical spread and uncommon multiple decades of proven track record, continue to spotlight UBA as the preferred destination for investors, individuals and businesses alike.”

Uzoka had during the Investors/Analysts Conference Call at the bank’s Head Office in Lagos, following the release of its results for the full year ended December 31, 2021 in March, explained that UBA’s diversification model remains one of its best growth strategies as seen from the huge contribution of its subsidiaries into the business in the last financial year.

He assured that with its diversified business model and keen ventures into key markets in Africa and beyond, the bank was sure of delivering huge financial benefits and dividends to its investors in the current financial year and beyond.

A breakdown of the full year 2021 financial results showed that gross earnings rose significantly to N660.2 billion representing an increase of seven percent compared to N616.8 billion recorded at the end of the 2020 financial year, whilst total assets grew by 11 percent to an unprecedented N8.5 trillion in the year under review, up from N7.7 trillion in 2020, marking the first time the Bank’s assets would cross the N8 trillion mark.

UBA’s Profit Before Tax (PBT) 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 as Profit After Tax (PAT) rose 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 total dividend of N1.00, comprising an interim dividend of 20 kobo, already paid, and a final dividend of 80 kobo, which was later presented to shareholders for approval at the 60th Annual General Meeting held April 7, 2022.

For its Q1 2022 operations, UBA reported a net profit of N41.50 billion, reflecting an 8.76 percent growth year-on-year, as earnings per share for the period stood at N1.14, a 9.62 percent increase from the N1.04 reported a year earlier in 2021. Net interest income grew by 14.10 percent from N74.38 billion to N84.87 billion in the current period.

With presence in 20 African countries, including Nigeria, as well established operations in France, the United Kingdom (UK) and the only sub-Saharan African bank with a deposit-taking licence in the United States of America (USA), UBA is a renowned financial institution providing banking and financial services to over 33 million customers across the globe.
UBA is connecting people and businesses across Africa through retail, commercial and corporate banking, innovative cross-border payments and remittances, trade finance, and ancillary banking services.