UBA gross earnings hit N600bn, proposes N0.35k final dividend for shareholders

*As a global bank, we remain well-capitalised and determined to successfully drive financial inclusion on the African continent through our innovative products and vast network, says Kennedy Uzoka, Group Managing Director/Chief Executive Officer of UBA Plc

Emmanuel Akosile | ConsumerConnect

The United Bank for Africa (UBA) Plc, a Pan-African financial institution, has announced its audited results for the full-year ended December 31, 2020, recording impressive growth across its top and bottom lines.

The bank’s 2020 audited financials filed at the Nigerian Stock Exchange (NSE) in the week showed gross earnings grew by 10.8 percent to N620.4 billion, compared to N559.8 billion recorded in the corresponding period of 2019.

UBA’s total assets also grew by 37.0 percent to N7.7 trillion for the year under review.

In spite of the challenging business environment since the outbreak of the COVID-19 pandemic and the resultant effect on economies globally, the Bank’s Profit Before Tax (PBT) recorded impressive N131.9 billion, compared to N111.3 billion at the end of the 2019 financial year.

Likewise, the leading financial institution’s Profit After Tax (PAT) rose remarkably by 27.7 percent to N113.8 billion compared to N89.1 billion recorded at the end of the 2019 financial year.

Operating Expenses grew by 10.1 percent to N249.8 billion, as against N217.2 billion in 2019, well below average inflation rate of 13.2 percent for the year, thus reflecting the bank’s cost effectiveness.

As a way of rewarding its shareholders, UBA has proposed a final dividend of N0.35 kobo for every Ordinary Share of 50 kobo.

According to information contained on the bank’s corporate Web site, the final dividend, which is subject to the affirmation of the shareholders at its Annual General Meeting (AGM), will bring the total dividend for the year to N0.52kobo as the bank had paid an interim dividend of N0.17 kobo earlier in the year.

UBA recorded a remarkable 24 percent growth (to N2.6 trillion) in loans to customers, whilst customer deposits increased by 48.1 percent to N5.7 trillion, compared to N3.8 trillion recorded in the corresponding period of 2019.

This development reflects increased customer confidence, enhanced customer experience, successes from the ongoing business transformation programme and the further deepening of its retail banking franchise, said the bank.

Mr. Kennedy Uzoka, Group Managing Director/Chief Executive Officer (CEO) of UBA Plc, while commenting on the result noted that the year 2020 was important for UBA Group. The CEO said the bank gained further market share in most of its countries of operations.

Uzoka stated: “We ended a very challenging year on a reassuring note.

“The Bank recorded double-digit growth in both our top and bottom lines, as gross earnings and after-tax profit grew by 10.8% and 27.7% to N620.4billion and N113.8 billon respectively.

“Return on equity was 17.2%, even as our cost-to-income ratio moderated to 61.3%. Our earnings per share of N3.20 is a 26.8% growth from the preceding year, as we continue to ensure maximum value creation for our highly esteemed shareholders.

He said: “Despite the tumultuous impact of COVID-19 pandemic globally and across our 23 countries of operations, we created N519.0 billion additional loans as we continued to support our customers and their businesses.

“Customer deposits grew 48.1% to N5.7 trillion, driven primarily by additional N1.8 trillion in retail deposits.”

Uzoka further noted: “As a global bank, we remain well capitalised and determined to successfully drive financial inclusion on the continent through our innovative products and vast network.

“Our capital adequacy and liquidity ratios came in at 22.4% and 44.3%, well above the respective regulatory minimum of 15.0% and 30.0%.

On the bank’s strategy, the UBA Chief Executive stated: “Our primary strategy will continue to focus on providing excellent services from our customers’ standpoint, putting the customer first always.

“Looking ahead, I am inspired by the achievements we have made since the launch of our transformation programme.

“We have expanded market share considerably across the geographies where we operate and are consolidating our digital banking leadership in Africa.

“We will continue to leverage our diversified business model and dedicated workforce to further strengthen our position as ‘Africa’s Global Bank’.”

Ugo Nwaghodoh, Group Chief Financial Officer, commenting on the bank’s result said:  “The persistent low-interest rate environment in 2020 exerted significant downward pressure on margins.

“Notwithstanding, our interest income for the year grew by 5.7% (to N427.9 billion), driven by 8.2% and 7.5% year-on-year growth on interest income on loans and investment securities respectively.

“Our interest expense declined by 8% (to N168.4billion) driven largely by a 34.2% decline in interest expense on customer deposits in our Nigerian operations, bringing down the Group’s cost of funds to 2.9%, from 4% in 2019.

Nwaghodoh said: “We have prudently stepped-up our reserves for loan impairments, hence the 37.4% YoY growth to N22.4billion, implying a 0.9% cost of risk.

“These reserves provide adequate cover for impairments and should help minimise the need for further reserves in the current year, in view of the improving global operating environment.

“Our NPL ratio has declined to 4.7% (from 5.3% in 2019), driven by growth in the loan book, robust credit risk monitoring architecture, and payment of Past Due Obligations (PDOs).”

Meanwhile, as Nigeria continues to see signs of recovery from the disruptive COVID-19 pandemic, led by resumption of economic activities across the globe, increase in consumer spending, and continued progress on vaccine deployment, Nwaghodoh added that UBA is well-positioned for greater synergy across the Group.

“We remain committed to our prudent risk management practices, and optimistic of best value for our stakeholders in the days ahead,” he stated.

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