Strengthening Pan-African Banking Status

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The United Bank for Africa Plc is positioning itself to continue to benefit from economies of scale, writes Obinna Chima

There has been a rapid expansion of pan-African banks (PABs) in recent years. 

According to a report by the International Monetary Fund (IMF), overall, the PABs are now much more important in Africa than the long-established European and American banks. 

PABs have expanded mainly through subsidiaries, via the acquisition of existing banks. Only a few PABs have used greenfield investments to expand across countries. 

In fact, the IMF stressed that the growth of PABs offers a number of opportunities and benefits, stating that the expansion of the banks reflect the increase in economic integration within Africa more generally and was contributing to improve competition, support financial inclusion, and give rise to greater economies of scale. 

“PABs raise the importance of transparency and disclosure, good governance, strong prudential oversight, and a legal and regulatory framework that supports effective and comprehensive supervision and crisis management, particularly in the countries that are homes to major PABs. 

“Anecdotal evidence suggests that the expansion of these banks has improved competition and given rise to economies of scale especially in host countries with small local markets. The PABs are driving innovation, offer opportunities to enhance financial inclusion, and in some cases have contributed to lowering costs. 

African banks have also become lead arrangers for syndicated loans filling the recent gap left by European banks The expansion of PABs increased diversification effects for home countries and provided further growth opportunities,” the fund had stated in the report.

Similarly, a report by Capital Markets in Africa, noted that a number of strategies are helping pan-African banks to expand. 

“Pan-African banks have also benefited from a strategic combination of using brick and mortar expansion as well as modern banking and communication technology. First banks often need to time markets and enter when it is profitable to do so. 

“Brick and mortar banks require significant investments and branching. Hence in more populated areas where businesses and jobs are expanding, these banks are willing to sink the initial cost of entry to have a physical presence. In others where markets are thin, a combination of mobile banking and networks of agents are used to source customers from otherwise unattractive and underserved markets.  

“Increasingly, Africa-originated banks are playing significant roles in filling the financing and technical needs, of various governments, including the financing of large infrastructure projects that are in most cases co-financed with multilateral banks,” it added.

Clearly, the United Bank for Africa (UBA), a pan-African bank, has continued to take advantage of the opportunities with its wide network in the continent.

Also, the recent appointment of the first non-Nigerian as its African Executive, Mr. Abdoul-Aziz Dia, a Senegalese as Executive Director for Treasury and International Banking, epitomises its pan-African character.

This is, however, subject to the approval of the Central Bank of Nigeria. Dia becomes the first non-Nigerian Group Executive Director of the bank, bringing a wealth of multi-geographical experience to the Group.

“Dia will be responsible for UBA’s global network of operations in New York, London and Paris, together with Group Treasury, where UBA offers a sophisticated suite of products to multinationals, international institutions and African clients,” a statement from the bank added.

Indeed, Africa has provided ample opportunity for UBA to diversify its banking business and therefore ensure sustainable revenues regardless of economic cycle.

Other Appointments

Apart from Dia, the bank also appointed Mr. Oliver Alawuba as the Chief Executive Officer (CEO) of UBA Africa. He is to oversee the bank’s 20 African country operations, excluding Nigeria. Alawuba succeeds Mr. Victor Osadolor who retires from the Group Board after nine years of service working at UBA. Alawuba has close to three decades of banking industry experience.

He was once the CEO of UBA Ghana and rose to become Regional CEO, UBA Africa before returning to Nigeria to run UBA’s East Bank.
Under his leadership, UBA’s Nigerian East Bank division became the fastest growing regional bank in the group.

Similarly, Mr. Chukwuma Nweke, who is currently the Executive Director Operations, was confirmed by the Board as the Group Executive Director, Retail and Payments, demonstrating the group’s commitment to its retail offering.

Nweke has close to three decades of banking experience spanning Banking Operations, Finance, Technology, Audit and Strategy.

The Board also announced the appointment of Mr. Chiugo Ndubisi as Group Executive Director and the Group Chief Operating Officer, subject to the approval of the Central Bank of Nigeria.

Ndubisi is a professional with almost three decades of banking experience that includes the role of Chief Finance Officer (CFO) and Executive Director on the board of a financial institution.

His in-depth understanding of banking and finance industry dynamics will bring a lot of value to the Group Board of UBA.

Speaking on the appointments, the Group Chairman, Mr. Tony Elumelu, said: “These appointments emphasise the group’s commitment to our pan-African and global network, our huge retail client base and our operational infrastructure. We are focused on improving our efficiency and further strengthening our pan-African mission, using the extraordinary pool of talent and experience available in the group.”

Elumelu thanked the outgoing Deputy Managing Director/CEO, UBA Africa, Mr. Victor Osadolor, and the former Regional CEO for UBA in East and Southern Africa, Mr. Emeke Iweriebor, for their contributions to the bank.

“Victor and Emeke were key players during the merger of Standard Trust Bank and UBA and have been valuable contributors to the growth of the bank. We wish them well,” he added.

According to the statement, the board appointments underlined UBA’s broader commitment to investing in the highest quality human capital.

The bank recently reformed its grade structure and technology teams, having reduced its grade structure from 16 to 12 levels, at the end of 2019. The bank also welcomed 3,000 new staff members in 2019 and promoted over 5,000 employees.
Under the Group Managing Director/CEO, UBA Plc, Kennedy Uzoka, the bank has expanded across the continent and beyond, meeting client’s global banking needs through its presence in London, New York, Paris as well.

In 2019 alone, UBA launched operations in Mali and upgraded its operation in the United Kingdom. 

On March 1, 2019, UBA launched its full banking operations in the United Kingdom, an expansion move that further consolidated its positioning as the first and only Sub-Saharan African financial institution with banking operations in both the UK and the US.

A techie himself, the GMD has ensured significant investment in the digitalisation of the bank’s activities and processes, particularly the introduction of UBA’s chatbot, LEO which is the first of its kind by any financial institutions in Africa.

“Our commitment to customer service excellence is translating to strong, operational and financial efficiency,” Uzoka said, reiterating the bank’s commitment to continue to put customers at the forefront of its activities.

“We are focused on adding value to the customers as we strive to give them an excellent experience at all times. We do this by having a vivid understanding of our customers and their specific needs, and by effectively monitoring their satisfaction through the feedback mechanism, and more importantly, making valuable improvements from their feedback. I am pleased to see we are increasingly becoming the bank of choice for individuals and businesses across Africa,” the GMD said.

“UBA remains committed to its vision of becoming the undisputed leading and dominant financial services institution in Africa. We will continue to innovate and lead in all our business segments, whilst delivering top-notch operational efficiencies and best-in-class customer service. We are beginning to realise early gains from our ongoing Transformation Program and I am indeed excited about the days ahead,” Uzoka added.

The bank’s chatbox, LEO, is available on different platforms including Whatsapp, Facebook and more recently on IOS, the mobile operating system of Apple Inc.

UBA customers can use the services of Leo, to open an account, buy airtime, check account balance, make account transfers and pay bills.
With business chat, customers can always reach a live person and are always in control of whether they share any contact information with a business, the bank said at the launch earlier in September.

Since its introduction in 2018, Leo has effectively been replicated in 18 African countries and the list keeps growing.