By Hamilton Nwosa(Head, The New Diplomat’s business and data tracking desk)
Inspired by its encouraging performance in terms of growth, effectiveness and organizational efficiency, the United Bank for Africa Group(UBA) Plc, a frontline Pan African financial institution, has unveiled a profit-before-tax of N32.7 billion in the first three months of 2020.
Group Managing Director/CEO of UBA, Mr. Kennedy Uzoka, who made this public recently explained that despite the challenging operational business environment, UBA’s attainments in the first quarter of 2020 are encouraging and awesome. Mr Uzoka submitted that UBA has not only maintained and fortified its strong profitability capabilities in accomplishing an annual 20% Return on Average Equity (RoAE), the bank has demonstrated double-digit boost across all its major income lines.
Recall that correlatively, UBA reportedly recorded a N30.2 billion profit in the first quarter of 2019. The pan-African bank stated that it built upon its modest growth in interest and non-interest income as well as enhanced organizational efficiency to accomplish an impressive and inspiring 8.5 percent year-on-year growth.
“Driven by a year-on-year growth in interest income, UBA Group recorded a 11.8% percent year-on-year growth in gross earnings to close at N147.2 billion for the three months period ending March 2020, compared to N131.7 billion recorded in the first three months of the year 2019. “The bank’s total assets also rose by 13.4% to N6.4 trillion in the period under review, compared to N5.6 trillion recorded at the end of the 2019 financial; while shareholders’ funds grew to N612.6bn from N597.9 billion in the same period. We are pleased with our top and bottom lines in the first quarter of 2020, delivering N147.2billion in gross earnings and profit before tax of N32.7billion.
“The double-digit growth in the topline testifies to the resilience of our business model as a group, even as the 17% growth in our fees and commission income underscores our diversified business model, enabling us to deliver best value to our stakeholders, even in tough macroeconomic scenarios,’’ Uzoka was quoted as saying.
While commending the bank’s team as well as cheering the Financial institution’s retail and electronic lines of business, Uzoka said he is “very excited about recent successes we have recorded in all our business segments, especially our retail and electronic banking businesses within the period with retail deposits accounting for 72% of customer deposits even as cost-of-funds moderates to 3.3%.”
He added: “We will continue to grow market share in all our markets, whilst maintaining cost discipline across our businesses, driving efficiency in our processes using best-rated technology.” On the bank’s response in building resilience and capabilities amidst the ravaging impact of covid-19 pandemic, Uzoka explained: “In response to the spread of COVID-19 several national governments have announced a partial or total lock down in a number of our markets, post Q1 2020. Fortunately, we have built robust electronic channel platforms to enable us effectively serve our customers from the convenience of their homes. Despite the lockdown, our banking channels have remained open to our customers 24/7, even as we continue to align and adapt our operating model to ensure we service our customers excellently and safely.”
Similarly, UBA’s Group Chief Finance Officer, Ugo Nwaghodoh, harped on profitability ratios thus: “Our profitability ratios are upbeat and indicative of our good earnings quality and cost efficiencies. We recorded a return on average equity (ROAE) of 20% for the period, bolstered by a net interest margin of 6% and 11.6% growth in net fee and commission income. Amidst the volatile operating environment, the Bank recorded a net loan growth of 9.5% whilst maintaining our low to moderate risk appetite. “Remarkably, our operating income grew 12.2%, giving credence to improved operational efficiency across the group, and the increasing contribution of subsidiaries to our earnings base. We are exploring and taking advantage of all opportunities to improve our operational and balance sheet efficiencies, given the prevailing market conditions”.
With strong presence in New York(US), London(UK) and Paris(France), UBA performs banking services to a wide variety of customers running into the region of over 18 million customers spread across its 1,000 operational business offices and focal points in about 20 African countries.
