United Bank for Africa (UBA) Plc, the Pan African financial institution, has announced commendable performance in its unaudited 2020 Third Quarter Financial Results, with impressive growth in Gross Earnings, which rose to N454.4 billion, up from N428.7billion recorded in September 2019.
According
to the report filed with the Nigerian Stock Exchange (NSE) on Friday
(20 Nov. 2020), UBA reported a Profit Before Tax of N90.4 billion
compared to N98.2 billion recorded at the end of the third quarter of
2019. Similarly, the Bank recorded an after-tax net profit of N77.1
billion, thus putting its annualised return on average equity at 16.4%.
Operating income also improved by 10.4% year-on-year to close at N293.7
billion, up from N265.9 billion achieved in the corresponding period of
2019.
•UBA MD/CEO Kennedy Uzoka
The bank continues to maintain a very strong balance sheet, with Total Assets of N7.1 trillion, a 26% increase over the N5.6 trillion recorded at the end of December 2019. UBA benefitted largely from its technology-led initiatives targeted at improving customer experience over the past few years, as Customer Deposits leaped to N5.2 trillion from N3.8 trillion at the end of the last financial year. The shareholders’ funds remained very strong at N655.3 billion rising by 9.6% from N598.0 billion recorded in December 2019, thus reflecting a strong capacity for internal capital generation and growth.
Commenting
on the results, the Group Managing Director/CEO, UBA Plc, Kennedy
Uzoka, said: “In spite of the current turbulence in the operating
environment, occasioned by the global pandemic, we have continued to
record significant progress in our business segments. Notably, our
innovative financial inclusion propositions have helped us moderate
cost-of-funds to 3.2% (4.0% in FY 2019), as low-cost deposits (which
accounts for 76.2% of our customer deposits) grew 40.8% by the end of
the third quarter. Our Direct Sales Agents, Agency Banking Network, and
Digital Banking propositions have positioned us at the forefront of
financial inclusion across geographies where we operate.”
Uzoka
pointed out that during the period under review, the bank was able to
provide support to customers across its footprint, assisting them to
navigate the negative impact that Covid-19 pandemic has had on
livelihoods, businesses and social life, adding that “since March 2020,
we have provided transaction fee waivers to customers, rescheduled loans
where business cashflows have been impacted, and donated generously to
governments and communities to help catalyse a comprehensive pan-African
response to the fight against the COVID-19 Pandemic.”
Speaking
on the expectations for the rest of the year, Uzoka said: “Whilst the
outlook for the rest of 2020 is expected to remain challenging, our
diversified model provides sufficient resilience, enabling us to
continue to delight our customers with innovative banking products
within our robust risk management framework.”
Also
throwing more light on the Bank’s financial performance and position,
the Group CFO, Ugo Nwaghodoh, said: “We achieved substantial growth in
the underlying business, having grown loans by 15.6% (to N2.4 trillion)
and deposits by 35.7% (to N5.2 trillion) within the period as interest
and fee income from loans settled at N172.9 billion and N8.9 billion
respectively. Credit impairment charges increased by N4.8 billion YoY
(to N11.5 billion), providing adequate reserve for impaired loans, which
should help moderate the need for further reserves later in the year.
NPL ratio and cost-of-risk settled at 5.2% (5.3% in FY 2019) and 0.64%
(0.9% in FY 2019) respectively.
“As
we deploy rigorous balance sheet management strategies to protect our
margins, we will sustain cost discipline to push cost-to-income ratio to
our desired sub-60% target in the short-term. The Group continues to
target 15% loan growth, a NIM of >6.0% and ROE of >16% for the
2020 financial year, but targets remain subject to the evolution of the
COVID-19 pandemic and its implications on the operating environment,”
the GCFO explained.
United
Bank for Africa Plc is a leading Pan-African financial institution,
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
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