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UBA Delivers N300.6 Billion Gross Earnings, Declares N0.17k Interim Dividend

Gbemileke Ajayi

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Africa’s leading financial institution, United Bank for Africa (UBA) Plc, has announced its audited financial results for the half-year ended June 30, 2020, showing commendable growth across key performance indices as well as an increased contribution from its African subsidiaries.

Notwithstanding the challenging business and economic environment occasioned by the Covid-19 pandemic, the pan African financial institution was able to deliver growth in its gross earnings which rose to N300.6bn up from N294bn recorded in the same period of 2019.

According to its results filed with the Nigerian Stock Exchange (NSE), the Group recorded N2.2 trillion in net loans to customers, representing a 6.1% growth even as deposits from customers increased impressively by 25.2% to N4.8tn. Net interest income grew by 8.4% to N119.3billion, whilst net fee and commission income stood at N38.6billion representing a 7.0% increase compared to a similar period in 2019.

As of June 30, 2020, the Bank’s Total Assets surpassed the N6tn mark as it leaped to N6.8 trillion. Operating income also grew by 7.7% to N197.1bn compared to N182.9bn while profit before tax stood at N57.1bn from N70.3bn in 2019, yielding a 14.4 percent annualized return on average equity.

The bank’s Shareholders’ Funds remained strong at N634.7bn up from N597.9bn in December 2019, driven by growth in retained earnings, a reflection of UBA’s capacity for business growth. 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 N0.17 per share for every ordinary share of N0.50 each held by its shareholders.

Commenting on the results, UBA’s Group Managing Director/Chief Executive Officer, Mr. Kennedy Uzoka said “Our 2020H1 results is yet another demonstration of the resilience of our business model in an extremely uncertain and tough operating environment. We recorded commendable growth in our underlying business in terms of customer acquisition, transaction volumes, and balance sheet whilst inflation, depressed yield environment and exchange rate volatilities impacted our net earnings as anticipated.

He further stated, “Despite the short-term challenges to various economic sectors occasioned by the Covid-19 pandemic, we focused on the fundamentals of businesses in growth-driving sectors of various economies in which we operate and achieved 6.4% growth in gross loan to customers, reaching the N2.3trillion mark. The Group achieved N114.3 billion (a 10% YoY growth) in interest income from loans and advances to customers, as well as credit-related fees and commissions.

Uzoka explained that notwithstanding the lock-down in a number of countries and the general lull in several economic sectors, UBA’s banking channels remained open to customers ‘24/7’, adding that “Fortunately, we had proactively built robust electronic channel platforms to enable us to serve customers efficiently and deliver services to them in the comfort of their homes. Notably, we are adjusting our operating model in response to the ‘new normal’ and will continue to optimize the way we work and serve customers in the days ahead.”

He expressed confidence in the bank’s capacity to deliver good returns to shareholders: “we remain committed to our drive as ‘Africa’s Global Bank’ and confident of claiming and sustaining industry leadership on key metrics across geographies where we operate. We will strive to deliver our services in a sustainable way, ultimately leveraging our best-in-class digital capabilities to delight our 21 million (and growing) customers across 23 countries.”

Also speaking on the results, UBA’s Group CFO, Ugo Nwaghodoh said “Our H1 2020 results reflect the inherent benefits of diversification as we have seen marked growth in contribution from the subsidiaries across Africa. Our Rest-of-Africa operations have continued to break new grounds in market share gains, providing a buffer for Group earnings. As the global and local economies begin to improve, we remain optimistic of a better performance in the second half of the year, with expected improvement in the Group’s NIM and ROAE which stood at 5.4% and 14.4% respectively as at end of H12020.

“We defensively positioned our loan portfolio whilst we grew gross loans by 6.4%, maintaining our prudent risk appetite, even as NPL ratio for the Group moderated to 4.1% (from 5.3% in 2019FY). We have prudently set-up reserves for loan impairments in recognition of potential losses on the portfolio, resulting in a 150% growth in our provisioning. Albeit, the cost of risk moderated to 0.7% from 0.9% in 2019FY. The Group’s capital adequacy ratio increased to 24.9% providing a very strong buffer for asset growth. We remain committed to maintaining our robust risk management practices, as profitable growth and good asset quality remain our priority in 2020,” he noted.

United Bank for Africa Plc is a leading Pan-African financial institution, offering banking services to more than twenty-one million customers, across over 1,000 business offices and customer touchpoints, in 20 African countries. With a presence in the United States of America, the United Kingdom, and France, 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.

BIG STORY

Despite BVN, NIN, FG Orders Nigerians To Re-Register Their Details Or Lose Access To Bank Accounts

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The Federal Government has ordered all account holders in the country’s financial institutions to register their details again.

The order was given despite the possession of the Bank Verification Number and the National Identification Number by account holders.

This new order was disclosed by the government on its Twitter account, @NigeriaGov, on Thursday.

It said, “This is to notify the general public that all account holders in financial institutions (banks, insurance companies, etc) are required to obtain, complete and submit self-certification forms to their respective financial institutions.

“Persons holding accounts in different financial institutions are required to complete and submit the form to each one of the institutions.

“The forms are required by the relevant financial institutions to carry out due diligence procedures in line with the Income Tax Regulations 2019.

“The self-certification form is in three categories: Form for the entity – for controlling person (individuals having controlling interest in a legal person, trustee, etc) – Form for the individual.

“Failure to comply with the requirement to administer or execute this form attracts sanctions, which may include monetary penalty or inability to operate the account.”

The government, however, did not give more explanation on this order.

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BIG STORY

Naira Exchanges N460 To Dollar On Parallel Market

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The naira on Monday fell by 1.09 percent to N460 on the parallel market. The naira decline followed President Muhammadu‘s directive to the Central Bank of Nigeria (CBN) to stop dollar sales for food and fertilizer imports.

On the official market supported by the CBN, the naira traded at N381 to the dollar, while it was quoted at N385.83 naira on the spot market yesterday.

Buhari last Thursday directed the CBN to stop selling foreign exchange for those imports, similar to an order issued last year.

Nigeria faces its worst economic crisis in four decades triggered by an oil price crash induced by the novel coronavirus pandemic. The crisis has slashed government revenue, weakened the currency, and created a large financing gap for the economy.

A trader attributed the high dollar demand in the parallel market to importers who have to make payments to bring in goods for end-of-year sales.

The naira had firmed sharply two weeks ago on the parallel market after the CBN resumed dollar sales to individuals and investors to clear their demand.

But sales have not been enough, traders say, with pressure piling up on the currency. Nigeria has spent 16.6 percent of its dollar reserve from last year to $35.77 billion.

Dollar liquidity dried up on the spot market after foreign investors dumped Nigerian assets following the oil price crash. However, CBN’s forex sales have also been inadequate.

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BUSINESS

Heritage Bank, FAMO Provide Succor For 300 Private School Teachers, SMEs

Gbemileke Ajayi

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As part of efforts to cushion the effects of the COVID-19 on the education sector, Heritage Bank Plc in partnership with Honourable Fatima Mohammed (FAMO) foundation has provided succor to over 300 affected private school teachers and small-medium enterprises (SMEs).

The challenges posed by the COVID-19 pandemic, have continued in the shutdown of schools for months leaving the private school teachers without any means of livelihood and no source of income.

To this effect, in alleviating the challenges, Heritage Bank and its partner supported over 300 Private School Teachers and small businesses as palliatives in 15 local governments; including five major markets in Ojokoro Local Council Development Area of Ifako Ijaiye, in Lagos State, weekend.

Speaking at the event, Mother Dan-Egwu, Group Head, Education, NGO & Faith Groups, Lagos Mainland Zone of the bank, stated that as an educational-friendly financial institution, Heritage Bank appreciates the socio-economic role the sector plays in the country.

According to her, Heritage Bank deemed it necessary to partner FAMO to champion the corporate social responsibility of the bank in supporting private school teachers and small businesses out of hardship and the quagmire plunged into nationwide by the pandemic.

She further explained to journalists that Heritage Bank and the Foundation seek to help teachers in phases.

Dan-Egwu said that this phase will comprise of 300 teachers who will get food items and cash worth Ten Thousand Naira (N10, 000) each.

On the mood of selection adopted, she stated that FAMO selected the teachers based on the regions, as the first phase comprised of 300 teachers and SMEs in the South West (Lagos) would be assisted and the poorest of the poor were the main target through the help of National Association of Private School Teachers (NAPST) to identify those teachers in direst need of the assistance.

She, however, disclosed Heritage Bank’s strategy to provide basic palliative care to the educational system at the resumption of academic activities in schools.

According to her, the bank has three areas of basic supports in providing mentorship program for schools, school portal, and school health plans in partnership with Health Maintenance Organisations (HMOs).

She further explained that support programs churned out by the bank are designed to instill value and keep students focused on making the best of their lives through corporate models, help school authorities to manage operations, and steer them into moving the educational system to the new digital era; where teachers can use technology in classroom management, administration, engagement with parents.

For the school health plan, Dan-Egwu hinted Heritage Bank would help to provide a very affordable health plan to ensure that every member of the school community is covered medically, as this will reduce the anxiety amongst teachers, parents, and school authorities.

In her address, the Convener of FAMO, Honourable Mohammed, commended Heritage Bank for its bold steps in joining hand-in-hand to support the challenged private school teachers, SMEs sectors, and the roles the bank plays in championing CSR in the country.

Mohammed stated that the primary aim was basically to cushion the effect of poverty especially as it concerns the private school teachers.

“The private school teachers because of the pandemic haven’t been paid for 6months and there are a lot of such cases around here. Ifako-Ijaye is the second-largest LGA in Lagos State; therefore, it is time to reach out to the people. During the pandemic, we have reached out to them about 2 to 3 times. I reached out to Heritage Bank and they heard my voice just to partner with us with my palliative team just to cushion the effect,” she said.
Meanwhile, for the SME owners, she further stated that additional plans have been agreed upon with the Agency Banking Unit of Heritage Bank to empower them to function as agents in this space.

She also commended Heritage Bank as a youth-friendly bank for their numerous supports to young Nigerians in helping to promote their businesses and dreams.

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