By Goddy EgeneÂ Â Â
United Bank for Africa (UBA) Plc has announced its audited results for the financial year ended December 31, 2017, showing significant growth in the contribution and market share from its pan-African subsidiaries, among other positive trends in its financial performance.
A statement from UBA at the weekend showed that the pan-African financial institutionâ€™s gross earnings grew substantially to N462 billion, up by 20 per cent from N314 billion recorded in the corresponding period of 2016.
According to the report released to the Nigerian Stock ExchangeÂ on Friday, UBA delivered a strong 16 per cent year-on-year growth in profit before tax to N105 billion, compared to N90.6 billion in the 2016 financial year. Its profit after tax also leaped to N78.6 billion, an 8.8 per cent year-on-year growth compared to N72.3 billion in 2016.
The bankâ€™s subsidiaries outside Nigeria contributed a third of the groupâ€™s top-line and 45 per cent of the profit for the year, a remarkable improvement from the 31 per cent contribution made by the ex-Nigeria offices in 2016.
This, according to market analysts, affirmed the success of the bankâ€™s expansion strategy, with a target of 50 per cent contributions by 2020, said the statement.
The bankâ€™s operating income grew to N326.6 billion, a 20.6 per cent increase compared to N270.9 billion recorded in 2016. This, according to analysts, affirmed the capacity of the group to deliver strong performance through varying economic cycles and a challenging business environment.
The audited results also showed that the bankâ€™s total assets peaked at N4.07 trillion, translating to a 16.1 per cent year-on-year growth from the N3.50 trillion recorded in the 2016 financial year.
In 2017, the bankâ€™s net loans achieved a prudent 9.7 per cent growth at N1.65 trillion, while customer deposits grew toÂ N2.73Â trillion, representing a 10 per cent YoY growth over the N2.49 trillion recorded in the 2016 financial year.
Reflecting strong internal capital generation, the bankâ€™s shareholdersâ€™ fund also rose by 18.2 per cent to N529.4 billion in the 2017 financial year.
Subject to the approvals of the shareholders, the bankâ€™s board proposed a final dividend of 65 kobo per every share of 50 kobo each. This final dividend proposal is in addition to the 20 kobo per share interim dividend paid after the audit of the 2017 half-year financial statements, thus putting the total dividend for 2017 financial year at 85 kobo per share.
Commenting on the results, Kennedy Uzoka, GMD/CEO of UBA, said: â€œThe results underline the success of our strategy of expanding across Africa, diversifying revenues and capturing the broader business opportunities inherent in Africaâ€™s growth.
â€œThe results reinforce the sustainability of our business model and the capacity to deliver superior long-term returns to shareholders, as the economic and business environments improve.
â€œIn 2017, we made strong progress in our strategic initiative of dominating transaction-banking across all our countries of operation, gaining market share in all lines of our business.
â€œEven as the non-oil sector of our largest country of operation, Nigeria, remained relatively weak, we still grew earnings by 20 per cent to N462 billion, a third of which was attributable to non-funded income.â€
Also speaking on the bankâ€™s performance, the Group Chief Finance Officer (GCFO), Ugo Nwaghodoh said: â€œIn a period of high-interest rates, we achieved a relatively low 3.7 per cent cost of funds. This operational efficiency reflects the benefit of our rich pool of stable savings and current account deposits.
â€œNet interest margin stabilised at 7 per cent, even as yields on treasury assets dropped in the last quarter of 2017. Our core transaction banking offerings gained strong momentum, with income from these business lines growing by double digits.â€
â€œWe remain committed to our responsible approach to balance sheet management, with a focus on growing risk assets and a broader balance sheet in a profitable and prudent manner.
â€œAmidst a subdued Nigerian credit market, we grew our loan portfolio by 10 per cent, leveraging our robust liquidity and capitalisation to support good businesses through this challenging economic cycle.
â€œWe closed the year with a Basel II capital adequacy ratio of 19 per cent and a liquidity ratio of 50 per cent, well ahead of the 15 per cent and 30 per cent regulatory requirement, respectively.
â€œOur disciplined approach to lending and broader risk management continue to uphold our asset quality,â€ he added.
Apart from the strong financial performance in 2017, the UBA Group proved its leadership on the continent as the Banker Magazine crowned the group, African Bank of the Year 2017, the statement added.
To further demonstrate the groupâ€™s strength and dominance in the financial sector on the continent, four of UBA Groupâ€™s operations in Africa also led contenders in their respective countries to emerge the Best Bank of the Year 2017.
UBA Congo, UBA Tchad, UBA Gabon and UBA Senegal emerged the Best Bank of the Year in Congo, Tchad, Gabon and Senegal, reinforcing the strong franchise of the group across its chosen markets in Africa.
UBA is a leading financial services group in sub-Saharan Africa, with a presence in 19 African countries, as well as the United Kingdom, the United States of America and France.