BusinessQ3 2022: UBA Heads For N10trn Assets on Strong Growth Momentum

Q3 2022: UBA Heads For N10trn Assets on Strong Growth Momentum

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Africa’s Global Bank, United Bank for Africa (UBA) Plc, sustained its growth trajectory during the nine months ended September 30, 2022, incorporating the Q3 performance. The Tier-1 lender which has raced on the fast lane since the year looks set to hit and, possibly exceed, the N10 trillion assets mark at the end of the year.

After crossing the N8 trillion mark assets (specifically N8.54 trillion) at FY 2021, the bank totally avoided the lane of sliding numbers to grow its assets progressively to N9.31 trillion during the nine months ending September 30, 2022 against N8.54 trillion at FY 2021, representing a 9.1 percent balance sheet growth.

“The bank looks set to hit N10 trillion assets mark at the end of the year and that will be a landmark achievement for a fast-growing financial services institution. It is a reflection of the viability of its subsidiaries which are contributing meaningfully to the rapid expansion of the bank since the past decade,” said Dan Omokhore, a financial analyst. He added that for a bank that is rapidly spreading its tentacles across the world, its assets base cannot but be seen to be robust.

Glo

In its financial statement filed with the Nigerian Exchange Limited (NGX), UBA reported a 12.3 per cent rise in profit before tax to close at N138.5 billion compared to N123.4 billion recorded at the end of the Q3 2021, while profit after tax also rose significantly by 10.9 per cent to N116 billion up from N104.6 billion recorded a year earlier, thus sustaining its annualised return on average equity for Q3 2022 at 19.2 per cent.

In the nine months of 2022, UBA fees and commissions grew by 24.41 percent to N138.07 billion from N110.98 billion in the corresponding period. The bank’s innovative strategies to maximise the opportunities in the electronic banking space earned it huge gains. It posted N47.95 billion from electronic banking income up from N41.91 billion in the corresponding period of 2021, representing N14.41 percent growth. The electronic banking income which represents 34.72 percent of the total N138.07 billion for the review period was the bulk of the banks income in that revenue head.

Electronic banking income represents income taken on transactions processed via electronic channels such as ATM, POS, mobile banking as well as credit and debit card transactions while trade transactions income entails one-off charges as related to letter of credits and other trade businesses which are excluded from those included in determining effective interest rates on those carried at amortized cost Credit-related fees and commissions jumped from N11.63 billion to N18.40 billion in the review period, representing a rise of 59.3 percent.

Customers’ deposits, a reflection of public confidence in the institution, jumped to N7.03 trillion, representing a 10.4 per cent rise, up from N6.4 trillion at the end of the last financial year. Loans and advances to customers were also on the upward trajectory, rising from N2.68 trillion to N3.04 trillion in the review period. The bank’s shareholders’ funds remained very strong at N809 billion up from N805 billion recorded in December 2021 again reflecting a strong capacity for internal capital generation and growth.

Commenting on the result, UBA’s Group Managing Director/Chief Executive Officer, Mr. Oliver Alawuba, remarked that the Group continues to show notable operating resilience amid significant headwinds in its presence markets amidst heightened global risk environment, adding that its strong diversification model and unwavering focus on customer satisfaction continues to give the bank an edge over its peers in the industry.

He said, “We continue to reap the benefits of our diversification strategy and Customer-1st philosophy and build resilience in our operations across Africa and the Rest of the World to support the mission of providing superior value to our stakeholders.

“This has translated into strong financial gains evident in growth in our customer deposits and Net interest margin. In addition, we are strategically positioned to drive our market share in our operating countries, with the strong growth of our payments and transaction banking offerings,” Alawuba stated.

Executive Director, Finance & Risk Management, Ugo Nwaghodoh, said, “The Group’s profitability increased by 12.3 per cent to N138.5 billion, with underlying growth in our key income lines and moderation in our cost of funds.

“We remain very cautious in risk asset creation as we defensively position our asset portfolios to minimize the impact of the heightened credit risk. Consequently, our NPL ratio remains within acceptable threshold at 3.2 per cent.

Investigation by this newspaper in March 2022 showed that subsidiaries of United Bank for Africa (UBA) Plc – the offshore operating segments of Africa’s Global Bank – collectively generated over N1 trillion. Revenue in five years (2017-2021), data from the bank’s annual reports have shown. The result which reflected a continued trend in the upward performance trajectory, revealed that the bank hauled N976.63 billion revenue in its African operating segments, except Nigeria, while N88.32 billion was earned from offshore locations in the rest of the world. This brings the subsidiaries’ total revenue haul to N1.1 trillion in the 5-year period.

Cumulatively, the subsidiaries’ component accounts for 38.8 percent of the lender’s overall N2.8 trillion revenue for the review period. Further analysis of the data gleaned from the annual reports of the financial services firm showed that the subsidiaries’ total revenue rose from N163.35 billion in 2017 to N300 billion in 2021, reflecting a 55 percent growth.

Specifically, in 2017, the subsidiaries recorded a total revenue of N163.34 billion which rose to N166.15 billion or 1.73 percent in 2018; it climbed further to N184 billion reflecting a 10.74 percent rise in 2019. Notwithstanding the COVID-19 challenges, the subsidiaries’ total revenue grew 36.85 percent to N251.8 billion in 2020 against the N184 billion of 2019. For the 2021 financial year, the segments pooled a total revenue of N300 billion which represents a 20 percent jump from what was achieved in the preceding year.

On the Profit side, the subsidiaries’ total profit before tax (PBT) which recorded a mere N54 billion in 2017, shot up to N105.4 billion in 2021, representing 95 percent growth. Trending on the same growth trajectory, total profit after tax (PAT) for 2021 was N75.35 billion as against N40 billion in 2017 reflecting a growth of 88.25 percent. Furthermore, the total PAT of N266.5 billion generated by the subsidiaries during the 5-year period was 54.34 percent of total N473 billion for the period.

About the Author

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Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.

Sam Diala, THEWILLhttps://thewillnews.com
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.

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