Africa’s leading financial institution, United Bank for Africa Plc has announced its audited 2018 half-year financial results, showing strong growth across key performance metrics as well as a significant contribution from its African subsidiaries.
Despite declining yield environment in two core markets, Nigeria and Ghana, the pan Africa financial institution delivered double-digit growth in gross earnings, as it recorded a 16 percent year-on-year rise in top-line to N258 billion, compared to N223 billion recorded in the corresponding period of 2017. This performance, according to analysts, underscores the capacity of the Group to deliver strong performance through economic cycles, even in a challenging business environment.
According to the report filed to the Nigerian Stock Exchange on Wednesday, UBA, reported strong growth in operating income at N168.5 billion, compared to N161.8 billion in the first half of 2017, an increase of 4.1 percent. Notwithstanding the inflation-induced cost pressure in the period, UBA finished the first half of the year strongly, with a Profit Before Tax of N58.1 billion. The Profit After Tax also improved to N43.8 billion, a 3.4 percent growth compared to N42.3 billion achieved in the corresponding period of 2017. The first half of the year profit translated to the pre-tax and post-tax return on average equity of 23% and 17% respectively.
UBA’s foreign operations continue to grow in importance, contributing 40% of the Group’s profit, which according to analysts attests to the benefit of UBA’s pan-African strategy and reinforces the Bank’s objective of achieving 50 percent earnings contribution from offshore subsidiaries.
In the first six months of the year, the Bank’s Total Assets grew 4.9% to N4.27 trillion and Customer Deposits rose by 6.1 per cent to N2.90 trillion, compared to N2.73 trillion as at December 2017. This growth trajectory underlines UBA’s market share gain, as it increasingly wins customers through its re-engineered customer service and innovative digital offerings. The Group’s Shareholders’ Funds remained strong at N496.3 billion, even as implementation of IFRS 9 impacted the total equity of the bank and its peers.
In line with its culture of paying both interim and final cash dividend, the Board of Directors of UBA Plc declared an interim dividend of N0.20 per share for every ordinary share of N0.50 each held on the qualification date – Wednesday, September 05, 2018.
Commenting on the results, the Group Managing Director/CEO, United Bank for Africa Plc (UBA), Mr Kennedy Uzoka said: “Our performance in the first half the year reflects the resilience of our business model and strategies. Despite declining yields in two core markets, Nigeria and Ghana, we delivered double-digit growth in gross earnings. Our performance demonstrates the success of our digital banking initiatives and broader Customer-First strategies”
“We are integrating banking to our customers’ lifestyle, simplifying processes for routine transactions and driving financial inclusion by making banking services accessible and affordable. We are creating opportunities for wealth creation and economic progress, as we empower our customers through innovative platforms and solutions that support their personal and business growth. Our commitment to delivering excellent service is paying off, as we increasingly win a bigger share of customers’ wallet across our chosen markets. We won the highly coveted “Africa’s Best Digital Bank” Award by Euromoney, demonstrating our pioneering initiatives are being recognised with Leo, our digital banker having been name-checked by Mark Zuckerberg ” Uzoka said.
“Our enhanced asset-liability management strategies improved asset yield and grew interest income by 21% despite prevailing yield environment. Our re-engineered sales structure provided the impetus for renewed retail deposit growth. I am particularly pleased by the 24% year-to-date growth in retail savings and current account deposits, underpinning the increasing penetration of our digital offerings and the Group’s overarching goal of democratizing banking across Africa. We improved net interest margin to 7.4%in line with our 2018 target, notwithstanding strong competition for wholesale deposits and the impact of rising global interest rates on our foreign currency funding,” he concluded
Also speaking on UBA’s financial performance and position, the Group CFO, Ugo Nwaghodoh said; “We finished the first half of the year in a stronger position and we are optimistic on the future of our business. Amidst economic recovery and uncertainties in Nigeria, our largest market, we grew net interest income and operating income by 9.6% and 4.1% respectively. We doubled revenue from trade services and grew e-banking income by 24%, a testament to our market share gain, which is driven by innovative offerings. Our foreign operations contributed 40% of the Group’s profit, underlining the benefit of our Pan-African strategy.
“We sustained our asset quality, with a cost of risk at 0.8%. Whilst the loan book declined by 6.5% due to prepayments from some customers in Nigeria and Ghana, we grew the overall balance sheet by 5% in the first half of the year. The Group’s capital adequacy ratio of 23%, Bank’s liquidity ratio of 48% and a loan-to-deposit ratio of 57% all reinforce our capacity to grow, with ample headroom for risk asset creation,” Nwaghodoh said.
In recognition of UBA’s dominance in Africa’s digital banking space, UBA emerged the Best Institution in Digital Banking across Africa, courtesy of Euromoney. Earlier in the year, UBA launched Leo, an e-chat service using artificial intelligence to help customers execute transactions on Facebook, the first of its kind in Africa. The Bank is set to replicate the success of Leo on WhatsApp on September 1st, bringing convenience to its growing youthful customer base across Africa.
UBA is one of Africa’s leading banks with operations in 20 African countries. It also has a presence in the global financial centres; London, New York and Paris.
UBA provides banking services to more than 15 million customers globally, through diverse channels.
NOVA Merchant Bank Rewards Excellence, Promotes One-Third of Workforce
In fulfillment of its commitment to be the best place to work and its policy of rewarding deserving staff members, NOVA Merchant Bank has promoted about a third of its staff who have demonstrated exceptional performance in their responsibilities.
These promotions come amidst the growth in the Bank’s business as it continues to scale up its operations.
In 2018, despite the tough economic and operating climate, NOVA in its first full financial year of operations, was able to deploy a state of the art and fully digital core banking application and recorded impressive strides in customer acquisition as well as the roll out of some bespoke and innovative products.
Speaking on the recent promotions, the Managing Director/CEO of the Bank, Mr Anya Duroha, while commending the staff for their hardwork said, “The Board and Management remain committed to developing and rewarding the talent of its youthful workforce”.
“The Bank will continue to leverage the innovativeness and dynamism of its young personnel to develop innovative solutions to enable our customers thrive in the marketplace. NOVA’s ’s strategies rely heavily on the unique talents each staff brings to the table. We do not take this for granted,” he said.
The Chairman of the Board, Mr. Phillips Oduoza while congratulating the newly promoted staff expressed the Board’s satisfaction and complete confidence in the staff and management of the Bank and pledged to continue to support them as they strive to achieve their corporate goals and objectives while realising their personal aspirations.
NOVA is a newly licensed merchant bank focused on providing wholesale and investment banking services. It commenced business in 2017 and has continued to boldly execute its roll out strategies.
Zenith Bank To Intensify Presence In Retail Segment —- Amangbo
Managing Director/Chief Executive, Zenith Bank Plc, Mr. Peter Amangbo, said that the bank is pursuing a retail strategy focussed on increased lending to small businesses, households and individuals at affordable interest rate.
He disclosed this yesterday in an exclusive interview with Vanguard Newspaper.
Noting that the sluggish loan growth in the banking industry in 2018 might persist this year due to the slow pace of economic recovery, Amangbo said that Zenith Bank has decided to focus on the retail segment to grow its loan book this year.
He stated: “We just talked about the loan volume going down in the industry but we are now looking at other areas. If the big ones are not taking loans you won’t fold your hands because those deposits that you are holding, the deposits can even sink a bank. If you take deposit and you don’t know where to deploy it, you can die in liquidity, that is what we normally say, you sink in that liquidity.
“So we are looking for other outlets. We are developing our retail end of the market and we are being very aggressive about that. We believe that is an area with a lot of potential.
We are looking at individuals, households, small businesses. We are reaching out to them with credit facilities, whether to pay school fees or to meet some obligations pending payment of their salaries or whether to develop their small businesses, we are reaching out; and about two weeks back, we had an event tagged, “Style by Zenith Bank.”
“The whole objective is to galvanise the economy to let them know that we are well positioned to serve small businesses and to serve households and individuals and even the students; that we are actually there for everybody. That is actually the stage we are moving to.
“We are not that perception that we are elitist; no, we are there for everybody, we have different offerings for everybody. So those that don’t even have security, we have ways of handling some of those things too.”
Referring to the difficulties most banks face in loan performance in the retail segment, Amangbo stated: “We try to be much more efficient in terms of how we do our business in that segment. If you are able to bring down your cost of funds, it is much easier to pass it on to our customers in terms of cost of lending to them.
And we believe if you are going to lend to the retail segment, households, small businesses and you are looking at those high rates, then you are inviting a bad loan.
“So for you to say you are going into retail, you must be sure of your cost of funds, which is what we are very mindful of, and that is why we said that deliberately we must bring down our cost of funds, which is basically what we are doing, so that it makes it much easier for us to lend in the retail space. Because the rate must be affordable, if it is not affordable from day one, you have set out to fail and to have bad loans.”
Zenith Bank has one of the lowest cost of fund in Nigeria banking industry, recording 3.3 per cent as at September 2018.
Union Bank Supports 6,000 Underprivileged Citizens During Festive Season [PHOTOS]
Union Bank, through its UnionCaresinitiative,provided relief for thousands ofthe underprivilegedby donating over 6,000 care bags containing staple food items.
The campaign, now in its third year,is co-funded by Union Bank and its employees. The bags containing nutritional staples included rice, beans, oil, salt and readymade stews. In various parts of the country, the Bank’semployees were seen handing out the bags to people in underserved communities.
The Bank also made financial donations to over 30 orphanages, care homes and NGOs including Wesley Schools for the Blind and Hearing impaired as well as Pacelli School for the Blind and Partially sighted children, all under its UnionCares umbrella.
The Head of Corporate Communication and Marketing at Union Bank, Ogochukwu Ekezie-Ekaidem described the initiative as one of the Bank’s ways of supporting charitable causes and contributing to the wellbeing of the needy, particularly during the festive season.
According to her;
“Union Bank will continue to lead the charge for social responsibility and impact. We are firm believers in supporting the communities within which we operate. This outlook drives the initiatives we organise and support under our Corporate Social Responsibility pillars.
We launched the UnionCares initiative to touch as many lives as possible during the festive season and it is fulfilling to see the level of impact the initiative has had.”
As part of its year end welfare initiatives, Union Bank also distributed care bags to children at the Makoko Christmas party organised recently by Slum2school.
The UnionCares initiative has come to be acknowledged as a viable platform which supports the less privileged. In 2017, the Bank and its employees also donated thousands of care bags to the needy across the country during the festive season.
Union Bank recently received the ‘Peoples’ Choice Award for theMost Outstanding Company in CSR/Sustainability’ at the 2018 Sustainability, Enterprise and Responsibility Awards (SERAs), emphasizing the Bank’s role as a socially conscious organization, actively supporting its host communities.
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