United Bank for Africa
(UBA) Plc, the pan-African financial services group operating in 19
countries, has released its audited 2016 full year results, showing a
significant growth in gross earnings and profits.
A statement from the bank attributed the improved earnings and profits
to its resilience, enhanced productivity and geographic diversification,
evident in the impressive contribution from its African subsidiaries.
The UBA Group reported a 22 per cent growth in gross earnings to N384
billion for December ending 2016, from N315 billion at the end of the
2015 financial year, illustrating the bank’s ability to grow
profitability despite the difficult macroeconomic environment.
According to the statement, in addition to the rising adoption of
electronic banking channels in many of the African markets where UBA
operates, the bank leveraged its strong franchise and geographical
footprint.
As reflected in the results released on March 24, 2017 at the Nigerian
Stock Exchange (NSE) covering the period January to December 2016, the
UBA saw a 32 per cent growth in profit before tax to N91 billion,
compared to N68 billion profit recorded over the same period of 2015,
while the bank’s profit after tax grew by 22 per cent to N72 billion,
from N60 billion recorded the previous year.
The performance was buoyed by considerable growth in both interest and
non-interest income, as well as increasing efficiency gains from cost
management initiatives.
The statement added: “UBA’s subsidiaries outside Nigeria are
increasingly gaining market share, reinforcing the strong and impressive
subsidiary contribution to the Group, estimated at one-third of profit
in 2016, from a quarter in 2015 financial year.”
Following the impressive performance, the Board of Directors proposed a
final dividend of 55kobo per share, subject to the approval of the
shareholders at the forthcoming Annual General Meeting (AGM), scheduled
to be held on April 7, 2017 at the Eko Hotel and Suites in Lagos.
The bank had earlier paid an interim dividend of 20kobo per share to
shareholders, bringing the total dividend for the 2016 financial year to
N0.75, an unprecedented yield of 13.9 per cent, based on the stock’s
unit price of N5.39 on the floor of the NSE.
UBA stated: “The results and dividend proposal justify investor
confidence in the bank, as reflected in the 20% year-to-date rally in
the share price, compared to the overall market loss of 5% over the same
period.”
Commenting on the results, Kennedy Uzoka, Group Managing Director/CEO of
UBA expressed satisfaction with the resilience of the bank, despite the
macroeconomic challenges in a number of countries where UBA operates.
“Given the operating environment in 2016, I am very pleased with our
profitability – an impressive 32 per cent growth in profit before tax to
N91 billion – whilst we have also focused keenly on operational
efficiencies, illustrated by the reduction in our cost-to-income ratio,”
Uzoka said.
Speaking on its outlook for the 2017 financial year, Uzoka expressed
optimism on the bank’s pan-African operations increasingly gaining
critical mass across its chosen markets.
“As we implement our Customer First Philosophy, we are approaching 2017
with real optimism, especially with the outlook remaining positive in
many of our markets, where we benefit from our increasingly diverse
revenue streams.
“We reiterate our pledge to delivering excellent services to our
customers, and remain committed to creating superior and sustainable
return for our shareholders.”
Ugo Nwaghodoh, Chief Financial Officer (CFO) of UBA Group, stated that
the bank extracted efficiency gains across its operations to boost
profitability.
He confirmed that the bank has seen significant improvement across major
performance metrics, including an improvement in the net interest
margin.
“Our performance in 2016 reflects the strong potential and resilience of
our business. We grew top and bottom lines by 22 per cent and 32 per
cent respectively, despite the stagflation in Nigeria, our core market.
“Reflecting improved balance sheet management and better value
extraction, our net interest margin (NIM) improved by 40 basis points
year-on-year to 6.7 per cent,” the CFO noted.
He also expressed delight at the performance of the group’s African
subsidiaries (ex-Nigeria), which contributed a third of the group’s
profits, adding that the bank would continue to leverage innovative
offerings to grow its share of the respective markets.
“As we diligently execute our Customer First initiative, I am
particularly upbeat on the future of business and the value creation for
shareholders,” he added.
UBA has a presence in 19 African countries, as well as the United
Kingdom, the United States of America and France.
The group boasts 11 million customers globally through a diverse service
channels in sub-Saharan Africa comprising 632 business offices, 1,750
ATMs, some 13,500 PoS’, and a robust online and mobile banking platform.
UBA was the first Nigerian bank to make an Initial Public Offering
(IPO), following its listing on the NSE in 1970. It was also the first
Nigerian bank to issue Global Depository Receipts (GDRs).
The shares of UBA are publicly traded on the NSE and the bank has a
well-diversified shareholder base, including foreign and local
institutional investors as well as individual shareholders.
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