… retail, electronic banking businesses hit all-time high
Buoyed by modest growth and efficiency, the Pan African financial institution, the United Bank for Africa Group (UBA) Plc, has announced a profit-before-tax of N32.7 billion in the first three months of 2020.
Comparatively, the bank recorded N30.2 billion profit in the first quarter of 2019, showing double-digit improvement across all its major income lines.
The bank said it leveraged on modest growth in interest and non-interest income as well as increased efficiency to deliver an impressive 8.5 percent year-on-year growth.
The Group Managing Director/CEO of UBA, Mr. Kennedy Uzoka, who announced this, expressed satisfaction with the bank’s performance in the first quarter of the year which, according to him, remains encouraging despite the challenging business environment.
He noted that UBA had sustained its strong profitability recording an annualized 20% Return on Average Equity (RoAE).
“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 said.
Applauding the bank’s retail and electronic businesses, the Group CEO said: “I am 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%.
“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 customers’ growing concerns on banking services during the current COVID-19 lockdown, Uzoka said the bank had put in place some strategic channels to ensure that customers transactions are effectively carried out with ease.
He said: “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.”
Uzoka noted that as economies and businesses adjust to the headwinds occasioned by the novel Covid-19 pandemic, the bank has been identifying emerging strategic opportunities arising from this and positioning to take full advantage of this to delight customers and create value for stakeholders.
“We also remain committed to our prudent risk management practices, as profitable growth and good asset quality remain our priority in 2020.”
Commenting on the results, the Group Chief Finance Officer, Ugo Nwaghodoh, said: “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”.
UBA offers banking services to more than 18 million customers across 1,000 business offices and customer touch points in 20 African countries.
With 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