Banking
H1 2018: UBA Delivers Double-Digit Growth in Gross Earnings
**Declares Interim Dividend of 20 Kobo Per Share
By Modupe Gbadeyanka
Leading financial institution in Africa, United Bank for Africa Plc (UBA) on Wednesday released its much-awaited audited 2018 half year financial results, showing strong growth across key performance metrics as well as a significant contribution from its African subsidiaries.
Despite declining yield environment in two core markets, Nigeria and Ghana, the pan Africa financial institution delivered double digit growth in gross earnings, as it recorded a 16 percent year-on-year rise in top-line to N258 billion, compared with N223 billion recorded in the corresponding period of 2017.
Business Post reports that this performance underscores the capacity of the lender to deliver strong performance through economic cycles, even in a challenging business environment.
According to the report filed to the Nigerian Stock Exchange (NSE) this evening, UBA reported strong growth in operating income at N168.5 billion, in contrast to N161.8 billion in the first half of 2017, an increase of 4.1 percent.
Notwithstanding the inflation-induced cost pressure in the period, UBA finished the first half of the year strongly with a Profit Before Tax of N58.1 billion.
The Profit After Tax also improved to N43.8 billion, a 3.4 percent growth compared to N42.3 billion achieved in the corresponding period of 2017. The first half of the year profit, translated to pre-tax and post-tax return on average equity of 23 percent and 17 percent respectively.
UBA’s foreign operations continue to grow in importance, contributing 40 percent of the financial institution’s profit, attesting to the benefit of UBA’s pan-African strategy and reinforces its objective of achieving 50 percent earnings contribution from offshore subsidiaries.
In the first six months of the year, the UBA’s Total Assets grew 4.9 percent to N4.27 trillion and Customer Deposits rose by 6.1 percent to N2.90 trillion, compared with N2.73 trillion as at December 2017.
This growth trajectory underlines UBA’s market share gain, as it increasingly wins customers through its re-engineered customer service and innovative digital offerings.
The bank’s Shareholders’ Funds remained strong at N496.3 billion, even as implementation of IFRS 9 impacted the total equity of the bank and its peers.
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 20 Kobo per share for every ordinary share of 50 Kobo each held on the qualification date – Wednesday, September 05, 2018.
Commenting on the results, the Group Managing Director/CEO of UBA, Mr Kennedy Uzoka, said, “Our performance in the first half the year reflects the resilience of our business model and strategies.
“Despite declining yields in two core markets, Nigeria and Ghana, we delivered double digit growth in gross earnings. Our performance demonstrates the success of our digital banking initiatives and broader Customer-First strategies.”
“We are integrating banking to our customers’ lifestyle, simplifying processes for routine transactions and driving financial inclusion by making banking services accessible and affordable.
“We are creating opportunities for wealth creation and economic progress, as we empower our customers through innovative platforms and solutions that support their personal and business growth.
“Our commitment to delivering excellent service is paying-off, as we increasingly win a bigger share of customers’ wallet across our chosen markets. We won the highly coveted ‘Africa’s Best Digital Bank’ Award by Euromoney, demonstrating our pioneering initiatives are being recognised with Leo, our digital banker having been name checked by Mark Zuckerberg,” Mr Uzoka added.
He said further that, “Our enhanced asset-liability management strategies improved asset yield and grew interest income by 21 percent despite prevailing yield environment.
“Our re-engineered sales structure provided the impetus for renewed retail deposit growth. I am particularly pleased by the 24 percent year-to-date growth in retail savings and current account deposits, underpining the increasing penetration of our digital offerings and the Group’s overarching goal of democratizing banking across Africa.
“We improved net interest margin to 7.4 percent in line with our 2018 target, notwithstanding strong competition for wholesale deposits and the impact of rising global interest rates on our foreign currency funding.”
Also speaking on UBA’s financial performance and position, the Group CFO, Mr Ugo Nwaghodoh, stated that, “We finished the first half of the year in a stronger position and we are optimistic on the future of our business.
“Amidst economic recovery and uncertainties in Nigeria, our largest market, we grew net interest income and operating income by 9.6 percent and 4.1 percent respectively.
“We doubled revenue from trade services and grew e-banking income by 24 percent, a testament to our market share gain, which is driven by innovative offerings. Our foreign operations contributed 40 percent of Group’s profit, underlining the benefit of our Pan-African strategy.
“We sustained our asset quality, with cost of risk at 0.8 percent. Whilst the loan book declined by 6.5 percent due to prepayments from some customers in Nigeria and Ghana, we grew the overall balance sheet by 5 percent in the first half of the year. The Group’s capital adequacy ratio of 23 percent, Bank’s liquidity ratio of 48 percent and loan-to-deposit ratio of 57 percent all reinforce our capacity to grow, with ample headroom for risk asset creation,” Mr Nwaghodoh said.
In recognition of UBA’s dominance in Africa’s digital banking space, UBA emerged the Best Institution in Digital Banking across Africa, courtesy of Euromoney.
Earlier in the year, UBA launched Leo, an e-chat service using artificial intelligence to help customers execute transactions on Facebook, the first of its kind in Africa. The Bank is set to replicate the success of Leo on WhatsApp on September 1st, bringing convenience to its growing youthful customer base across Africa.
UBA is one of Africa’s leading banks with operations in 20 African countries. It also has presence in the global financial centres; London, New York and Paris. UBA provides banking services to more than 15 million customers globally, through diverse channels.
By Aduragbemi Omiyale
The Central Bank of Nigeria (CBN) has reaffirmed that the old and new Naira notes will continue to be used for financial transactions in the country beyond December 31, 2024.
There had been rumours that the old and redesigned N200, N500, and N1,000 banknotes would no longer be legal tender from Wednesday, January 1, 2025, because the central bank would phase out the notes in compliance with a Supreme Court judgement of November 29, 2023.
But the apex bank, in a statement signed by its acting Director of Corporate Communications, Mrs Hakama Ali, on Friday, clarified that the apex court’s judgement being cited did not authorise the bank to phase out the banknotes by the end of this year.
According to her, the court allowed the CBN to leave the old and new notes to be used concurrently until it decides to gradually phase out the former.
The central bank’s spokesperson urged members of the public to disregard claims suggesting the old series of these denominations would cease to be valid at the end of this year.
She urged them to continue to accept all Naira notes for daily transactions, encouraging banks to also adopt alternative payment methods such as electronic channels to reduce the pressure on physical cash usage.
“The Central Bank of Nigeria (CBN) has observed the misinformation regarding the validity of the old N1000, N500, and N200 banknotes currently in circulation.
“In line with the bank’s previous clarifications and to offer further assurance, the CBN wishes to reiterate that the subsisting Supreme Court ruling granted on November 29, 2023, permits the concurrent circulation of all versions of the N1000, N500, and N200 denominations of the Naira indefinitely.
“For the avoidance of doubt, all versions of the naira, including the old and new designs of N1000, N500, and N200 denominations, as well as the commemorative and previous designs of the N100 denomination, remain valid and continue to be legal tender without any deadlines,” the statement noted.
By Adedapo Adesanya
Access Bank Plc, the banking subsidiary of Access Holdings Plc, has entered into a binding agreement with South African-based Bidvest Group Limited for the acquisition of 100 per cent equity stake in Bidvest Bank Limited.
The deal for the 24-year-old South African lender is due to be completed in the second half of 2025, upon regulatory approval.
This shows Access Bank’s further expansion plans in line with goals set by its late founder, Mr Herbert Wigwe.
The agreement to acquire 100 percent stake in Bidvest Bank reflects Access Bank’s commitment to strengthening its footprint in South Africa and consolidating on its position as the continent’s gateway to global markets as it seeks to optimise the benefits of recent acquisitions and accelerate its transition towards a greater focus on efficiencies.
Bidvest Bank, founded in 2000 is a niche and profitable South African financial institution providing a diverse range of services, including corporate and business banking solutions and diverse retail banking products.
As of its year ended June 2024, Bidvest Bank reported total assets equivalent of $665million and audited profit before tax of $20million.
Upon conclusion of this acquisition, Bidvest Bank will be merged with the bank’s existing South African subsidiary to create an enlarged platform to anchor the regional growth strategy for the SADC region.
This is coming just as the bank opened a new branch in Malta as part of efforts to focus on international trade finance after obtaining a banking licence from the European Central Bank (ECB) and the Malta Financial Services Authority (MFSA).
Access Bank said the licence marks a transformative milestone in bolstering Europe-Africa trade flows.
The Maltese branch was established by Access Bank UK Limited, the subsidiary of Access Bank Plc, which is also the subsidiary of Access Holdings Plc, which is listed on the Nigerian Exchange (NGX) Limited.
By Modupe Gbadeyanka
To strengthen Europe-Africa trade ties, Access Bank has opened a new branch in Malta. It will focus on international trade finance, employing approximately 30 people in its initial phase, with plans for controlled expansion over time.
It was learned that this Maltese branch was established by Access Bank UK Limited, the subsidiary of Access Bank Plc, which is also the subsidiary of Access Holdings Plc, which is listed on the Nigerian Exchange (NGX) Limited.
Access Bank Malta Limited commenced operations after obtaining a banking licence from the European Central Bank (ECB) and the Malta Financial Services Authority (MFSA).
Access Bank said the licence marks a transformative milestone in bolstering Europe-Africa trade flows.
Malta, a renowned international financial centre, and a gateway between the two continents, is strategically positioned to play a pivotal role in advancing commerce and fostering economic partnerships.
This strategic expansion into Malta enables The Access Bank UK Limited to leverage growing trade opportunities between Europe and Africa.
It underscores the organisation’s commitment to driving global trade, financial integration, and supporting businesses across these regions.
“By establishing operations in Malta, we will gain a foothold in a market that bridges European and North African economies, moving us one step closer to our goal of becoming Africa’s Gateway to the World.
“It further enhances our bank’s capacity to support clients with innovative solutions tailored to cross-border trade and investment opportunities,” the chief executive of Access Bank, Mr Roosevelt Ogbonna, stated.
“Europe has emerged as Africa’s leading trading partner, driven by initiatives such as the Economic Partnership Agreements between the EU and African regions and the African Continental Free Trade Area (AfCFTA).
“With Europe-Africa economic relations entering a new phase, The Access Bank Malta Limited is ideally positioned to deepen trade and meet the financing and banking needs of our clients in these expanding markets,” the chief executive of Access Bank UK, Mr Jamie Simmonds, commented.
Also speaking, the chief executive of Access Bank Malta, Renald Theuma, said, “Malta is uniquely positioned as a bridge between Europe and Africa, making it an ideal location for our subsidiary. This move allows The Access Bank Malta Limited to engage more closely with customers in Europe and deliver tailored financial solutions that drive growth and connectivity across both continents.”
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