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United Bank for Africa, Banking Beyond Borders

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UBA retained earnings crosses N1 trillion as group posts N156.3 billion pre-tax profit in Q1 2024

United Bank for Africa, Banking Beyond Borders

 

United Bank for Africa (UBA) Plc’s highly commended first-half financial statement was driven partly by growths in the group’s operations in other African markets and other parts of the world. Deputy Group Business Editor, Taofik Salako, reports that the growing influence of Nigerian corporates, especially financial institutions, in other non-Nigerian markets underlines the importance of the economic diplomacy of the new government

United Bank for Africa (UBA) Plc was the most active stock at the country’s stock market last week, sustaining the momentum of activities that greeted the release of the group’s financial report and accounts for the first half ended June 30, 2023.

Since the release of the six-month results seven days ago, UBA’s share price has risen by more than 20 per cent as investors continue to react positively to the audited statement.

With more than 270,000 shareholders and 37 million customers, UBA, a first-generation legacy bank, is a leading tier one bank, the top hierarchy of the major financial institutions of systemic importance to the country; euphemistically referred to as “too big to fail”.

The performance of such an institution provides a bird-view of the macroeconomic analysis, especially given the interconnectivity of banking, business growth, returns, wealth distribution and the average living standards of the mass of economically active populace.

Independent market analysts have generally acclaimed UBA Group’s performance as impressive. Cordros Securities said UBA Group’s results were “impressive financial performance”, adding that it expected the “strong earnings growth to remain by year-end”.

FSDH Capital stated that UBA “reported a robust set of numbers”, noting that “investor reaction to the robust second quarter 2023 results was buoyant”.

Economic Interconnectivity

The release of the UBA results came as President Bola Tinubu rounded off a multi-level foreign trips, largely centred on re-energising Nigeria’s global presence and recognition as an economic force to reckon with. Tinubu rolled many things into his participation at the G-20 Summit in India, hosting a bilateral Nigeria-India Presidential Roundtable that brought India and Nigeria’s private and public sectors together, a direct interaction with the Nigerian community in India, many bilateral discussions on the sidelines of the G-20 Summit and a well-applauded message at the main G-20 Summit.

With $14 billion immediate investment pipeline and several commitments secured in India, Tinubu moved to United Arab Emirates (UAE) to straighten a frosty relationship. The president resolved the lingering issues of visa ban on Nigerians and suspension of flights to Nigeria by UAE airlines.

Beyond the lifting of visa ban on Nigeria by authorities at UAE and the resumption of operations by UAE airlines as well as the investment deals in India, analysts said the biggest gains of the trips were the Nigerian businesses and investors. Tinubu, who is championing a socio-empaehic market-economy, was accompanied on the India trip by a large number of Nigeria’s leading investors and enterpreneurs; a mix of public and private sectors that has been the trademark of the new administration.

The connection between Nigeria’s economic diplomacy and the growing international influence of Nigerian businesses was illustrated by the UBA Group’s results.

Facts of the results
Key extracts of the audited results for the six-month period ended June 30, 2023 showed that UBA recorded triple-digit growths across major income lines, as the pan-African banking group continued to show substantial progress in increasing the contribution and market share from its subsidiaries in Africa and globally.

The six-month report showed that UBA’s profit before tax leapt by 371 per cent from N85.75 billion in first half 2022 to N404 billion in first half 2023. Profit after tax jumped by 437.8 per cent to N378.24 billion in first half 2023. Gross earnings grew by 164 per cent to N981.78 billion in June 2023 as against N372.36 billion in comparable period of June 2022. Operating income rose by 206.6 per cent to N783.96 billion in June 2023 as against N255.67 billion reported in comparable period of 2022.

The balance sheet indicated that total assets continued on upward trajectory, rising above the N15 trillion mark. It hit N15.38 trillion, representing a 41.7 per cent leap from N10.86 trillion recorded at the end of last year. Customer deposits also rose by 42.4 per cent to N11.14 trillion as against N7.8 trillion recorded at the end of 2022 while shareholders’ funds increased to N1.712 trillion, reflecting the group’s strong capacity for internal capital generation.

The impressive performance prompted the board of the bank to increase interim dividend payouts by 150 per cent. Shareholders will receive N17.1 billion as interim dividend for the first half 2023 as against N6.84 billion paid for first half 2022. This implies a dividend per share of 50 kobo in first half 2023 as against 20 kobo paid for first half 2022. The report indicated annualised return on average equity of 57.7 per cent as against 17.1 per cent it recorded last year.

 

Gains of global focus

UBA groups its businesses under three geographical segments of Nigeria, the home country; ‘Rest of Africa’, which comprises all subsidiaries in Africa, excluding Nigeria and ‘Rest of the World’, which comprises of UBA UK Limited, UBA New York branch and UBA Abu Dhabi. UBA operates some 1,000 business offices and touchpoints across 20 African countries. Beyond London, New York and Abu Dhabi, it also has notable presence in Paris and Cayman Island.

A segmental analysis of the businesses showed significant growths across the international subsidiaries, providing additional boost for equally impressive performance at the Nigerian market.

The ‘Rest of the World’ saw 182.1 per cent growth in turnover and 170.6 per cent increase in profit in first half 2023. The ‘Rest of Africa’ also reported 64.7 per cent growth in turnover with 55.6 per cent and 62.8 per cent increase in pre and post-tax profits respectively. Altogether, the non-Nigerian businesses accounted for almost a third of UBA Group’s turnover and about a quarter of the group’s pre-tax profit during the first half 2023.

Analysts have noted that the UBA’s global outlook has further validated the effectiveness of UBA’s long-term global strategy and positioning as the financial intermediary for Africa and the rest of the World, led by its largest shareholder and chairman, Mr. Tony Elumelu. A multi-preneur, Elumelu’s concept of ‘Africapitalism’ seeks to deploy private resources in critical sectors of African economy as a driving force for continental growth. This concept is also embedded in the Tony Elumelu Foundation (TEF), which provides grants, training, mentoring and other resources to innovative African youths and start-ups.

Group Managing Director, UBA Plc, Mr. Oliver Alawuba, said the first-half of the year’s result has again demonstrated the benefits of the group’s long-held diversification strategy across Africa and globally.

“The three core geographical pillars of our business-Nigeria, ‘Rest of Africa’ and ‘Rest of the World’ are making strong contributions to the group’s profit, further justifying our global strategy and business positioning across Africa, UAE, France, UK and USA, and demonstrating the benefits of positioning UBA as the financial intermediary for Africa and the rest of the world,” Alawuba said.

According to him, the growth of the group’s international business, most recently in the UAE, reinforces the group’s earnings quality.

He said the latest results underscored the group’s commitment to consistently deliver value to its shareholders, noting that the group recorded strong growths in revenues and profits from its operations.

According to him, the group made progress in digital payments, retail penetration and also benefitted from the effect of revaluation gains, arising from the harmonisation of foreign exchange rates at the different access windows in Nigeria.

“Our business is on a steady growth trajectory, as we further strengthen our risk management traditions and practices necessary technology investments to deliver premium service to our customers. We have also continued to finance landmark projects in critical sectors of the economies across Africa, facilitating intra-Africa trade with our valuable offerings and provide a versatile last-mile distribution network for Africa-bound donor and multilateral agency funds,” Alawuba said.

 

Analysts’ perspectives

Analysts also shared the optimistic view of the outlook for the group. FSDH Capital noted the positive trajectory of performance quarter on quarter. “Sequentially, the company recorded a steady 162.0 per cent quarter-on-quarter growth in gross earnings to N710.6 billion in 2Q23. The net interest income grew 32.5 per cent quarter-on-quarter to N158.5 billion, primarily due to a 23.2 per cent quarter-on-quarter increase in interest income from amortised cost and FVOCI securities.

Also, this was supported by a 41.3 per cent quarter-on-quarter increase in net fee and commission income to N73.7 billion in second quarter 2023, compared to N52.2 billion in first quarter 2023 and a significant rise in net trading and foreign exchange income to N392.2 billion in second quarter 2023, compared to N26.1 billion in first quarter 2023, leading to a robust 242.6 per cent quarter-on-quarter expansion in operating income to N608.2 billion in second quarter 2023,” FSDH Capital stated.

 

Outlook

Executive Director, Finance and Risk, Ugo Nwaghodoh, said the group’s annualised return on average equity at 57.7 per cent was bolstered by improved operating income and revaluation gains.

“Our half year 2023 financial numbers reflect excellent performance across key metrics, as we diligently execute our priorities for the year. It also pointed out that the group maintains robust capital buffers to support business growth and loss absorbency. The group’s shareholders’ funds stood at N1.7 trillion, with a capital adequacy ratio of 36.4 per cent,” Nwaghodoh said.

UBA stated that it believes that its international business has significant potential for continuing growth and to materially contribute to group’s revenue and profit in the future.

Alawuba said the first-half performance served as a strong impetus to deliver superior returns this year.

“As we approach the last quarter of the year, the group remains strategically positioned to sustain the strong performance, consolidating on first half 2023 results, to deliver superior returns to our esteemed shareholders,” Alawuba said.

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Union Bank Advocates for Environmental Restoration; Commemorates World Environment Day

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Union Bank promotes environmental restoration and commemorates World Environment Day

Union Bank promotes environmental restoration and commemorates World Environment Day

Union Bank, one of Nigeria’s leading financial institutions, has emphasised the importance of preserving and restoring the global habitat through sustainable environmental practices. This clarion call was made during an event organised in partnership with the Nigerian Conservation Foundation to commemorate this year’s World Environment Day.

The program, held on June 5th, 2024, at the Lekki Conservation Centre in Lagos State, brought together various stakeholders, including environmental rights activists, international partner agencies, corporate institutions, government agencies, and students of select secondary schools, to deliberate and engage in activities marking World Environment Day.

One of the main events on the day was a tree-planting exercise involving various participants and stakeholder representatives. The tree-planting activity was in keeping with this year’s celebration theme, “Land Restoration, Desertification, and Drought Resilience,” advocating for the rejuvenation and revitalisation of land devastated by deforestation, erosion, and desertification globally and in Nigeria in particular.
Speaking during the program, Patricia Iwhewhe, Head of Citizenship and Sustainability at Union Bank, echoed the importance of preserving our environment. According to her:

“Land degradation and erosion are not things stakeholders and policymakers can afford to ignore or gloss over. We all must get involved in helping restore and reclaim parts of our environment badly impacted by deforestation and desertification. Union Bank, as a sustainability champion committed to the preservation of our dear planet, appreciates and recognises the responsibility we have as humanity to look after our environment. We will continue to support and participate in programs dedicated to protecting and enriching our precious habitat”.

Stakeholders like the Nigerian Conservation Foundation (NCF) have also been invaluable partners in progress and are at the forefront of helping to preserve and protect nature and its resources. This has served to not only improve the quality of human life but also to sustain present and future generations. NCF’s advocacy over the decades has positively impacted and influenced Nigeria’s environmental policy. Union Bank will continue to be a dependable ally in supporting this noble cause of environmental preservation.

Union Bank, through its diverse range of projects and interventions, has demonstrated its unwavering commitment to bequeathing a safer, healthier, and more sustainable environment. The bank’s tangible contributions serve as a beacon of hope, inspiring a brighter and more sustainable future for all.

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FiBOP Partners with Fidelity Bank and CRC Credit Bureau to Educate Students on Financial Literacy

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FiBOP Partners with Fidelity Bank and CRC Credit Bureau to Educate Students on Financial Literacy

FiBOP Partners with Fidelity Bank and CRC Credit Bureau to Educate Students on Financial Literacy

In a bid to instill financial management skills in young minds, the Financial and Business Online Publishers (FiBOP) collaborated with Fidelity Bank and CRC Credit Bureau to organize a financial literacy class for over 100 students from various Lagos schools.

Despite the heavy rain and mid-term break, the students converged on the Muson Centre in Lagos, eager to learn about early-age financial management.

The interactive session, themed “Financial Literacy in a Digital Era: Catching Them Young,” was led by Osasikemwen Ighilen, representing Dr. Tunde Ahmed Popoola, Group MD/CEO of CRC Credit Bureau.

Ighilen emphasized the importance of developing a savings habit from an early age, encouraging the students to set aside a portion of their pocket money or earnings from part-time jobs.

She stressed that this habit would enable them to achieve their future ambitions, whether it be starting their own businesses or securing well-paying jobs.

FiBOP Partners with Fidelity Bank and CRC Credit Bureau to Educate Students on Financial Literacy

L-R: Representing, CRC, Credit Bureau Limited, Brand and Communications Manager, Osasikemwen Ighile; President, Finance and Business Online Publishers (FIBOP), Charles Onwuatogwu and Dan Preston Nwaokorie, Corporate Communications Dept., Fidelity Bank Plc, during the Maiden edition of FIBOP, Mid-Year Summit 2024 on Financial Literacy themed “Financial Literacy in a Digital Era: Catching them Young” at Muson Centre in Lagos on Friday June 14, 2024.

The CRC spokesperson also highlighted the significance of self-discipline, noting that every amount, no matter how small, counts when it comes to saving.

Dan-Preston Nwaokorie, representing Fidelity Bank, echoed this sentiment, urging the students to cultivate financial discipline by regularly setting aside a portion of their income.

By imparting these valuable lessons, the organizers aimed to equip the students with the skills necessary to make informed financial decisions and live fulfilling lives.

FiBOP Partners with Fidelity Bank and CRC Credit Bureau to Educate Students on Financial Literacy

L – R: Representative of the Guest Speaker, Branding and Communication Manager, CRC, Credit Bureau Limited, Osasikemwen Ighile; President, Finance and Business Online Publishers (FIBOP), Charles Onwuatogwu and Representing Fidelity Bank, Corporate Communication Manager, Fidelity Bank, Mr. Dan Preston Nwaokorie, students from various schools and other participants at the Maiden edition of FIBOP, Mid-Year Summit 2024 on Financial Literacy themed “Financial Literacy in a Digital Era: Catching them Young” at Muson Centre in Lagos on Friday June 14, 2024.

 

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Ecobank Reiterates Commitment To Help Adire Industry Leverage AfCFTA…

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Ecobank Reiterates Commitment To Help Adire Industry Leverage AfCFTA…

Ecobank Reiterates Commitment To Help Adire Industry Leverage AfCFTA…

 

… Gets Commendation from Ogun State Government

Ecobank Nigeria has restated its commitment to ensure that Nigeria’s Adire industry leverages the potential of the African Continental Free Trade Agreement (AfCFTA).

Speaking at the third edition of the annual Ecobank ‘Adire Lagos Experience’ in Lagos, the Executive Director, Commercial Banking, Ecobank Nigeria, Kola Adeleke, said the bank is committed to helping businesses exhibiting at the fair explore opportunities available through the Africa trade pact.

The event which is holding at the ultra-modern Ecobank Pan African Centre (EPAC), has seen over 100 exhibitors showcase locally processed adire attires made by indigenous designers.

“After the program, these 100 merchants, we are going to continue partnering with them. We are going to support them to build capacity. We are going to even use the opportunity for them to improve the quality of whatever they are producing for export purposes. Because ultimately, our goal is to ensure that Adire becomes like an African brand with global acclaim.
“This is very unique for us as an organization because it will help to grow our nation’s economy as we see the export potential there. We are going to profile all these merchants on the Ecobank single market trade hub and then position them so that they will be able to export their products to other countries in Africa and beyond, “he said.

Mr. Kola noted that Adire Lagos’ exhibition is part of the efforts of the bank to support and project the creative industry in the country, adding that as part of a Pan African bank which operates in 33 countries of Africa, Ecobank Nigeria will always look out to support various productive initiatives and the Adire exhibition fits into this goal.

Ecobank Reiterates Commitment To Help Adire Industry Leverage AfCFTA…

(L-R) Kola Adeleke, Executive Director, Commercial Banking, Ecobank Nigeria; Bimbola Wright, Director, Ecobank Nigeria; Emmanuel Ikazoboh, Former Chairman, Ecobank Transnational Inc.; Carol Oyedeji, Deputy Managing Director; Dr. Adesegun Akin-Olugbade, OON, Chairman, Luwaji Advisory & Former General Counsel, AFC & ADB.; Titi Olujobi, Director, Ecobank Nigeria; and Kenneth Okere, Company Secretary, Ecobank Nigeria at the Ecobank Adire Exhibition in Lagos.
Meanwhile, the Commissioner for Culture and Tourism, Ogun State, Dr. Fagbayi Oluwasesan, has commended Ecobank for promoting Adire culture to help improve the sector.

 

Speaking during his visit to the fair, Fagbayi, said: “The fabric is synonymous to Ogun state. We are the custodians of Adire. It is an indigenous textile from Ogun State and we have to protect it. That’s why we are happy with Ecobank for what they’re doing today, assisting us to showcase what God has given to us, protecting it, and also telling the world that this is what is good for us to be using as fabric.”

He also said that the Ogun State government has commenced measures to address the challenge of imported adulterated Adire fabric, which poses a major threat to the local Adire industry.

“The State House of Assembly have commenced steps, through our ministry, to curb the excesses or inflow of Chinese adulterated fabric.

“First and foremost, we don’t need to address it as ‘Adire Chinese’. It is never Adire because it is a print on its own that doesn’t pass through the process of how the fabric is made. The original fabric is made manually, and it passes through nine stages before it is made.
“We are working on that and a committee has been set up with the approval of the Governor that they should go to the market, you know, look at what we can do and come up with a law, probably, though we may not have the capacity to ban it outrightly.
“We’re also taking it up with the National Assembly; the Representative Abeokuta South Federal Constituency has also raised a Bill at the National Assembly that has passed its second reading now. By the time that is done probably we will have the backing of the federal government in banning this adulterated fabric out rightly.”

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