See Why Payment Issues, Currency Depreciation Pose Threat To African Banks - Global Report

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Tuesday, October 25, 2022

See Why Payment Issues, Currency Depreciation Pose Threat To African Banks



United Bank for Africa (UBA) says payment-related issues and currency depreciation are part of the issues plaguing financial institutions in Africa.

UBA Group Managing Director/ Chief Executive Officer (GCEO), Oliver Alawuba, said this in an interview with journalists on the sidelines of a four-day international banking conference from October 17-21 in the United States of America.

 

He said the bank had developed the capacity to effectively manage those risks, He pointed out that due to its reach and network, the banking group is strengthened.

Alawuba added that it is also largely insulated from internal and external challenges that have become commonplace among financial institutions on the continent.

 

He highlighted the various challenges plaguing banks and financial institutions, including credit, market and operational risks.

 

Alawuba further explained that with UBA’s vast foray into key markets, the bank has put in place solutions that will help hedge against losses arising from such risks.

“There are several challenges for Nigerian and African banks such as issues of payments, currency depreciation amongst others, but over the years, at UBA, we have developed the capacity to effectively manage these risks whilst we continue to pursue our growth strategy,” he said.

“UBA is a diversified institution in terms of the businesses and sectors we support. Some of the countries where we are present, like Zambia, Guinea and Mozambique have not witnessed currency depreciation, and so, the diversified nature of our business is a key positive.

“It gives us the leverage and provides business resilience. Furthermore, our presence in global financial centres such as New York, Paris, and London, provides further diversification of revenues and hedges against devaluation on the African continent. “UBA America has been providing banking services to African institutions for over three decades. We know Africa very well and understand how to mitigate the risks of doing business in Africa.”

On her part, Sola Yomi-Ajayi, executive director, UBA Group/CEO UBA America, said the objective of the conference was to build and strengthen the financial ecosystem, adding that the group has been working with African commercial banks and sovereign entities.

“UBA has been leveraging its extensive network to improve access to financial markets in addition to providing capacity-building initiatives for the development of the African financial eco-system. A key takeaway from this conference is that the risks pertaining to Africa can be de-risked, and we can make it more attractive to do business with African financial institutions,” she said.

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