Amidst serious macro-economic difficulties, Africa’s Global Bank, United Bank for Africa (UBA), has once again convinced its investors that it can deliver consistent impressive growth across all its major income lines.
The Bank’s unaudited result for March 31, 2013 which was released to the Nigerian Exchange Limited (NGX) on Thursday, April 13, 2023 showed that gross earnings rose by 47.5 percent from ₦183.9 billion to ₦271.2 billion.
While Interest Income which stood at ₦125.9 billion as at March 2022, grew by 53.4% to ₦191.9 billion in the quarter under consideration, Operating Income rose by 39.6 percent to ₦175.7 billion, as against ₦125.9 billion recorded in the corresponding quarter of 2022.
Following the sterling performance recorded in its just released 2022-year-end financials, UBA again saw its Profit Before Tax (PBT) rising significantly by 38.2 percent to ₦61.4 billion in Q1 2023, up from ₦44.5 billion recorded in the first quarter of 2022. In the same vein, its profit after tax (PAT) jumped from ₦41.5 billion to ₦53.6 billion, representing an impressive 29.1 percent increase.
Commenting on the result, UBA’s Group Managing Director/ Chief Executive Officer, Mr. Oliver Alawuba, explained that despite the high inflationary, and challenging global environment, UBA was able to leverage the uptick in interest rates and improved digital offerings, in growing funded and non-funded income, adding that he is particularly excited at the growth in PBT, which has helped to drive increased returns to shareholders, with a 22.6% Return on Average Equity (ROAE) compared to 19.7% recorded in December 2022.
“We have continued to record improved gains in our customer acquisition and retention strategies across our countries of presence, evident in the 10.5% growth in customer deposits to ₦8.6 trillion from ₦7.8 trillion at the end of 2022FY. This has enabled the Group drive increased loan growth and interest income, with loans to customers at ₦3.6 trillion, representing a year-to-date(YTD) increase of 5%. For 2023, we remain committed to improving the Group’s performance as we strategically position our entities to take advantage of emerging developments within their jurisdictions and across the globe. We will continue to deliver excellent rewards to our stakeholders,” Alawuba said.
Also speaking on the performance, UBA’s Executive Director, Finance and Risk, Ugo Nwaghodoh, said that the performance demonstrates the group’s resilience and commitment towards delivering value and enhancing the confidence of its customers, stakeholders and the wider public notwithstanding the competitive landscape and current global trend in the industry.
“The impressive performance of UBA Group in first quarter 2023 is hinged on its continuous improvement and growth in gross earnings and balance sheet size as gross earnings grew by 47.5% year-on-year to ₦271.2billion and total assets up by 4.6% to ₦11.4 trillion from ₦10.9 trillion as at December 2022, ” Nwaghodoh stated.
Continuing, he said, “The growth in gross earnings is on the strength of increase in both interest income and non-interest income while growth in total asset is attributable to increased deposits due to aggressive deposit mobilization drive that resulted in a 10.5% growth in customer deposit in the first quarter.”
United Bank for Africa Plc is a leading Pan-African financial institution, offering banking services to more than thirty million customers, across over 1,000 business offices and customer touch points, in 24 countries and across 4 continents.
With presence in the United States of America, the United Kingdom and France and recently the United Arab Emirates, 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.
This is no mean performance in a harsh macro-economic environment in with inflation rate hitting the roof top at 22.7 per cent in 2022; high unemployment at more than 40 per cent; underemployment above 25 per cent; and high insecurity caused by the Boko Haram sect, insurgents, kidnappers and bandits. It is much more difficult to transact business in Nigeria presently.
At the same time, Diaspora remittances, of course is now lower than the $23.55billion it attained in 2020 while investors both domestic and foreign are scared stiff to bring their resources here after exiting Nigeria.
Also remarkable is the country’s heavy debt burden at almost N44.6 trillion and expected to hit N77 trillion and above if the N23trillion the CBN’s overdraft to the federal governments is securitized. Of the budget of N21.8trillion for 2023, the budget deficit stood at N11.3trillion as over 90 per cent of revenues are now used to service debts.
Experts fear that we are again plunging into another round of debt trap as the country witnessed before 1999. At the recently concluded IMF/World Bank Spring meetings in the United States of America (USA), the IMF advised,
‘’Policymakers can take several steps to mitigate possible adverse impacts on the economy as a result of the necessary currency adjustments. In countries where inflation is aggravated by the exchange rate passthrough, tighter monetary policy will help alleviate the pressure by keeping inflation expectations in check and stem capital outflows while attracting inflows. Where fiscal imbalances are key drivers of exchange rate pressures, fiscal consolidation can help to rein in external imbalances and contain the increase in debt related to currency depreciation.”
Recent controversial election seem to have further heightened existing uncertainty in the political instability in the Country.
At the same time, insecurity has not only hobbled agriculture, many parts of Northern Nigeria have been taken over by bandits such that not much business activities can subsist. Flood has disabled a substantial part of the farms as millions of people have been pushed out of their homes.
The World Bank just noted that Nigeria’s revenue to GDP ratio hovered between five and six per cent last year and remains the lowest in the world. Recently, the world bank recorded that over 133million Nigerians are multidimensionally poor.
The Naira which exchanged at N220/$ by June 15, 2015 has depreciated by about 100 per cent to N750/$ this December 31, 2023.
A few days ago, while the International Monetary Fund (IMF) has retained its growth forecast of 3.2 per cent for Nigeria’s economy in 2023, analysts believe the conditions that impedes economic growth were still strong in the environment.
UBA has been consistent in delivering strong performance.
The bank’s audited financial results for the full year ended December 31, 2022, showed impressive performance across major indices.
According to the results, its gross earnings rose significantly to N853.2billion from N660.2billion recorded at the end of the 2021 financial year, representing a strong 29.2 percent growth.
Total assets rose remarkably by 27.2 percent, crossing the N10trillion mark, to close at N10.9trillion in December 2022; up from N8.5trillion in 2021. This is a very significant achievement and milestone in the history of the powerhouse financial institution.
Despite the highly challenging global economic and business environment, UBA recorded a laudable profit before tax, with a 31.2 percent growth, to close the year under review at N200.8 billion, rising from N153.01 billion recorded at the end of the 2021 financial year; while profit after tax (PAT) grew by 43.5 percent to N170.2billion in 2022, compared to N118.7 billion recorded the year before. Consequently, UBA Group Shareholders’ Funds rose to N922.1billion, as at December 2022, achieving an impressive growth by 14.6%, compared to prior year.
In the year under consideration, UBA Group cost-to-income ratio dropped to 59.2%, from over 60% in prior year, pointing at the Group’s improving efficiency.
In its usual tradition of rewarding shareholders, the Bank proposed a final dividend of 90 kobo for every ordinary share of 50 kobo, for the financial year ended December 31, 2022. The final dividend which is subject to the ratification of the shareholders during its upcoming Annual General Meeting (AGM) will bring the total dividend for the year to N1.10 per share, as the Bank had paid an interim dividend of 20 kobo, based on its audited 2022 half year results.
Also worthy of note, UBA recorded a 21.4 percent growth in loans to customers, moving up to N3.4 trillion in 2022, whilst customer deposits improved by 22.9 percent to N7.8 trillion, compared to N6.4trillion recorded in the corresponding period of 2021, reflecting increased customer confidence, enhanced customer experience, successes from the ongoing business transformation programme and the deepening of its retail banking franchise.