We’ve capacity to meet N500bn capital base – UBA



United Bank for Africa Plc (UBA) has expressed confidence in its capacity to meet the new N500bn capital base mandated by the Central Bank of Nigeria (CBN).

UBA’s Group Managing Director/Chief Executive Officer, Oliver Alawuba, disclosed this to the banks’ local and international investors during its 2023 Full Year Investors’ Conference Call on Friday, following the release of the bank’s financial result for the year ended December 31, 2023.

Alawuba, according to a statement, noted that UBA remains among the top capitalised banks, and he added that the bank is actively exploring a well-defined strategy to boost its capital base and ensure compliance within the regulatory time frame.

“This strategy may include a combination of options such as Rights Issue or Private Placement. The fact remains that we are confident in our ability to meet the CBN’s capital adequacy requirements and will keep investors informed as we progress,” he said.

“I want to reiterate that, UBA is very well capitalised with shareholders’ fund in excess of N2tn. We will in due course, raise the required component of capital in line with the CBN directive.”

The CBN had in late March unveiled new minimum capital requirements for banks, pegging the minimum capital base for commercial banks with international authorisation at N500bn.

Meanwhile, the GMD said that at the end of the 2023 financial year, UBA recorded an impressive leap in gross earnings, as it grew from N853.2bn to close at N2.08tn; representing a strong 143 per cent growth; total assets also rose remarkably by 90.22 per cent, to close at N20.7tn up from N10.9tn in 2022.

UBA’s profit before tax grew by 277 per cent, to close at N757.7bn, up from N200.9bn recorded in 2022; while profit after tax increased by 257 per cent from N170.2bn in 2022, to N607.7bn.

Shedding more light on how the banking group intends to manage the risk of Non-Performing Loans, especially in the face of the harsh business operating climate in Africa, Alawuba, indicated plans to employ proactive credit monitoring, restructuring strategies for at-risk loans, and increased provisioning coverage.

“We expect to keep NPLs at 4.5 per cent for the 2024 full year. This commitment to credit quality is to further strengthen our ability to support our customers, and protect shareholders’ value while contributing to overall economic activity, even in a dynamic economic environment,” he explained.

UBA’s Executive Director, Finance & Risk Management, Ugo Nwaghodoh, in his comments, was confident of an even better performance in the 2024 financial year and pointed out that with its growing investments, both in technology and IT Security, the bank is well on its way to ensure growth in its business.

“The Group remains fervently committed to sustainable growth and maintaining its strong compliance and risk management practices culture even as we drive our business through the next phase of growth,” Nwaghodoh stated.

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