In spite of the challenging business and economic environment occasioned by the Covid-19 pandemic, the pan-African financial institution, United Bank for Africa has delivered growth in its gross earnings up from N294 billion to N300.6 billion up in the first six months of the year.
This is contained in the bank’s audited financial results for the half year ended June 30, 2020, showing commendable growth across key performance indices and increased contributions from its African subsidiaries.
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 per cent growth even as deposits from customers increased impressively by 25.2 per cent to N4.8 trillion, Net interest income grew by 8.4 per cent to N119.3 billion, whilst net fee and commission income stood at N38.6 billion representing a 7.0 per cent increase compared to the similar period in 2019.
Also in the same period, the bank’s total assets surpassed the N6 trillion 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 per cent annualised return on average equity.
The report also showed that 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,’’ a statement made available to Persecondnews, said.
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.
“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 said notwithstanding the COVID-19 lockdown in a number of countries and the general lull in several economic sectors, UBA’s banking channels remained open to customers ‘24/7’.
“Fortunately, we had proactively built robust electronic channel platforms to enable us 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 optimise the way we work and serve customers in the days ahead.”
Expressing confidence in the bank’s capacity to deliver good returns to shareholders: Uzoka said: “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 150% growth in our provisioning. Albeit, 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.
UBA is offering banking services to more than twenty-one million customers, across over 1,000 business offices and customer touch points, in 20 African countries.
With 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.