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UBA Posts 18 Percent Growth In Earnings as Profit Hits N44.5Bn

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United Bank for Africa (UBA) Plc , Africa’s global bank, has released its unaudited results for the first quarter ended March 31st, 2022, recording impressive growth across its income lines.

UBA Posts 18 Percent Growth In Earnings as Profit Hits N44.5Bn

Mr Kennedy Uzoka, UBA GMD/CEO

The bank’s result which was released to the Nigerian Stock Exchange on Tuesday showed that gross earnings rose by 18.3% from N155.4 billion in 2021 to N183.9 billion; while operating income which stood at N106.6 billion as at March 2021, grew by N18% to N125.9 billion in the year under consideration.

The results revealed that the bank’s total assets also rose by 4.1% to N8.9 trillion in the period under review, compared to N8.5 trillion recorded at the end of the 2021 financial year; while shareholders’ funds grew by 2.6% to N825.7bn from N804.8 billion in the same period.

Leveraging on the growth in both interest and non-interest income, the bank’s profit before tax rose to N44.5 billion as at March 2022, up from N40.6 billion a year earlier, while profit after tax stood at N41.5 billion. As always, UBA sustained its strong profitability recording an annualized 20.4% Return on Average Equity (RoAE).

Mr Kennedy Uzoka, UBA’s group managing director/chief executive officer, explained that despite the myriad of economic challenges on the global front which shaped the first three months of the year, the bank’s business model continued to show resilience.

These challenges among others, he noted include the ongoing crisis between Russia and Ukraine that has resulted in a huge supply shock, pushing up commodity prices; and the hike in the interest rates in most advanced countries aimed at tackling spiralling inflation, sparking capital flow reversal from emerging and frontier markets.

“Notwithstanding these developments, we were able to leverage gains from our large customer base and vast geographical spread to bolster earnings. We recorded double-digit growth of 18 percent in our gross earnings to N183.9 billion, with our Nigerian operation raking in 65 percent of the revenue while our operations in other countries accounted for the remainder, showing the diversity in our operations,” Uzoka said.

The GMD pointed out that amid the “Great Resignation” wave that has seen a record number of employees across the globe quit their jobs, disrupting the performance of many businesses,

UBA, in the last quarter of 2021, thoughtfully reviewed upwards, the salaries of its staff as part of broad measures to retain talents, adding, “We believe our staff is part of our success story with their welfare as a top priority.”

Emphasising the bank’s commitment to sustain value for its shareholders in the 2022 financial year, the GMD said, “With strategies in place to further increase revenue and drive cost lower, we are determined to achieve our Cost-to-Income ratio target of below 60.0% by year-end; and for 2022, we are committed to consolidating on the strong start, surpassing our goals and targets, as we look forward to delivering stronger returns to our esteemed shareholders.

Breaking down the figures, Ugo Nwaghodoh, UBA’s group chief finance officer (GCFO), said, “Our Q1’22 financial numbers show we are off with a good start. Particularly, 1 am pleased with how we deployed our balance sheet in the period to grow revenues and increase our market share in a number of West African markets. Driven majorly by interest from customer loans and our investments in long-dated instruments, we grew interest income by an unprecedented quarterly rate of 15 percent to N125.1 billion.

“We drove down our annualized cost of funds by 11 basis points to 2.1%. This was achieved despite the uptick in the interest rate environment in the period,” the GCFO said.

 

He expressed confidence that the bank will meet and surpass its target for the remaining three quarters of the year, adding that “We remain well-capitalized and liquid to fulfil our growth strategy, take up opportunities in key sectors, whilst navigating impending macroeconomic headwinds.”

United Bank for Africa Plc is a leading Pan-African financial institution, offering banking services to more than twenty-five (25) million customers, across 1,000 business offices and customer touchpoints in 20 African countries. With a presence in New York, London and Paris, 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.

 

 

 

 

 


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E-Financial

African Fintech Sector Grows, Enhancing Access to Finance

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A new European Investment Bank (EIB) research released yesterday shows the number of fintech companies in Africa has nearly tripled since 2020, boosting access to finance for people and businesses across the continent.

The report Finance in Africa 2024 highlights both developments in the African financial sector and constraints to the region’s economic progress.

According to the report, Africa’s fintech sector is prospering as digital finance grows at a faster rate than traditional banks.

The EIB report says the number of African companies offering new financial services increased from 450 in 2020 to 1,263 at the beginning of 2024.

“Fintech is revolutionising the way we think about finance in Africa,” says EIB vice-president Thomas Östros. “By leveraging technology, we can improve access to finance for millions and foster sustainable economic growth.”

The Finance in Africa report includes data from the ninth annual EIB Banking in Africa survey that details diverse challenges and confirms resilience of the African banking sector.

“While we see some signs of improvement, the high cost of finance remains a source of concern,” says EIB chief economist Debora Revoltella. “As we navigate the dual challenges of climate change and the digital transformation, the role of multilateral development bank lending is even more relevant in supporting sustainable growth on the continent.”


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E-Financial

CBN’s New Directive: Banks to Trade Foreign Currency Deposits

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Central Bank of Nigeria (CBN) has authorized banks to trade with foreign currency deposits made under its new amnesty initiative, the “Disclosure Scheme.”

This directive, intended to boost transparency and economic resilience, was issued on November 5 and signed by CBN officials John Sonojah and Adetona Adedeji.

The “Disclosure Scheme,” launched on October 31, offers individuals and businesses a nine-month window to deposit foreign currencies with amnesty assurances, aiming to strengthen Nigeria’s financial sector.

According to CBN’s guidelines, banks—including commercial, merchant, and non-interest banks (CMNIBs)—can trade these foreign currency deposits, known as Internationally Tradable Foreign Currencies (ITFCs), unless participants choose to invest them directly.

However, banks must ensure the funds remain available to depositors upon request.

CBN outlined the role of banks in facilitating this scheme. Responsibilities include opening designated domiciliary accounts, issuing receipts within 24 hours of deposit, and maintaining confidentiality as per Nigerian data protection laws.

Additionally, banks are required to report all ITFC transactions and ensure compliance with regulatory frameworks, including anti-money laundering and terrorism financing laws.

Participants in the scheme can convert foreign currency deposits to naira at the prevailing exchange rate without restrictions on withdrawals.

The scheme’s transparency measures, combined with the flexibility for participants to manage their foreign deposits, are designed to build confidence and encourage wider participation.


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E-Financial

9PSB Promotes Financial Literacy @ World’s Savings Day 2024

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9 Payment Service Bank (9PSB), a leading digital payment service provider committed to advancing financial inclusion in Nigeria, observed World Savings Day 2024 by conducting a financial literacy and mentorship programme for students at Fountain Heights Secondary School in Surulere, Lagos.

This initiative aligns with the Central Bank of Nigeria’s (CBN) directive for all financial institutions to implement financial literacy programmes aimed at students, youth, and the public. The goal is to instill a culture of financial discipline, savings, and prudent money management practices among Nigerians.

At the event, Tolani Jemi-Alade, Chief of Business Planning, Operations, and Resources at 9PSB, addressed the students, underscoring the importance of cultivating positive financial habits, particularly considering economic uncertainties. She stressed the need for young individuals to integrate into the formal financial system, stating,

“We encourage every young person with a regular income to open a bank account as an essential step towards financial independence and savings for future needs. Money is necessary for day-to-day transactions and to manage unforeseen circumstances. Early planning is crucial, as these needs are inevitable.”

Tolani further highlighted the significance of World Savings Day, as championed by CBN, which aims to raise awareness of financial literacy and promote a culture of saving, particularly among students and youth. She emphasized the importance of understanding and leveraging formal financial services for long-term financial security.

Oladimeji Saka, Lead for Retail Banking and Customer Acquisition at 9PSB, echoed these sentiments, noting that financial literacy should begin at an early age. He advised that parents play an instrumental role in guiding their children through transitional stages to adulthood, equipping them with the necessary financial knowledge to manage their finances responsibly.

In his remarks, the Vice Principal Academics, Mr. Romanus Emegwakor, who represented the Principal of Fountain Heights Secondary School, expressed his gratitude to 9PSB for their commitment to empowering students with financial knowledge.

“We are extremely appreciative of 9PSB for this invaluable financial literacy programme. It is crucial for our students to understand the significance of financial discipline, and we believe this initiative will help them develop the necessary skills to make informed financial decisions in the future,” he said.

World Savings Day is an annual global campaign dedicated to educating individuals, particularly the youth, on the importance of prudent financial planning and saving through formal banking systems.


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