BY EMEKA EJERE
The unaudited 2020 Third Quarter Financial Results of United Bank for Africa (UBA) Plc, released recently showed that the pan African financial lender, defied the turbulence in the operating environment to record impressive growth in Gross Earnings, which rose to N454.4 billion, up from N428.7billion recorded in September 2019.
According to the financial results for the nine-month period ending September 2020 as released to the investing public on Friday (20 Nov. 2020), profit before tax fell slightly compared to Q3 2019, from N98.2 billion to N90.4 billion while profit after tax stood at N77.1 billion; thus putting the annualised return on average equity at 16.4 percent.
Operating income also improved by 10.4% year-on-year to close at N293.7 billion, up from N265.9 billion achieved in the corresponding period of 2019.
The bank maintains a very strong balance sheet, with Total Assets of N7.1 trillion, a 26% increase over the N5.6 trillion recorded at the end of December 2019. UBA benefitted largely from its technology-led initiatives targeted at improving customer experience over the past few years, as Customer Deposits leaped to N5.2trillion from N3.8 trillion at the end of the last financial year.
The shareholders’ funds remained very strong at N655.3 billion rising by 9.6% from N598.0 billion recorded in December 2019, thus reflecting a strong capacity for internal capital generation and growth.
“In spite of the current turbulence in the operating environment, occasioned by the global pandemic, we have continued to record significant progress in our business segments”, said the Group Managing Director/CEO, UBA Plc, Kennedy Uzoka.
“Notably, our innovative financial inclusion propositions have helped us moderate cost-of-funds to 3.2% (4.0% in FY 2019), as low-cost deposits (which accounts for 76.2% of our customer deposits) grew 40.8% by the end of the third quarter.
“Our Direct Sales Agents, Agency Banking Network, and Digital Banking propositions have positioned us at the forefront of financial inclusion across geographies where we operate.”.
According to Uzoka, during the period under review, the bank was able to provide support to customers across its footprint, assisting them to navigate the negative impact that Covid-19 pandemic has had on livelihoods, businesses and social life.
“Since March 2020, we have provided transaction fee waivers to customers, rescheduled loans where business cashflows have been impacted, and donated generously to governments and communities to help catalyse a comprehensive pan-African response to the fight against the COVID-19 Pandemic,” Uzoka said.
On the expectations for the rest of the year, he said, “Whilst the outlook for the rest of 2020 is expected to remain challenging, our diversified model provides sufficient resilience, enabling us to continue to delight our customers with innovative banking products within our robust risk management framework.”
Also commenting on the bank’s financial performance, Ugo Nwaghodoh, UBA group CFO, said: “We achieved substantial growth in the underlying business, having grown loans by 15.6 percent (N2.4 trillion) and deposits by 35.7 percent (N5.2 trillion) within the period as interest and fee income from loans settled at N172.9 billion and N8.9 billion respectively”.
UBA had also demonstrated operational resilience with 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.
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.
UBA had 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 during 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.”