- Gross Earnings Crosses the N600bn Mark
- Proposes Final Dividend of N0.35k
Pan-African monetary establishment, United Bank for Africa Plc (UBA) has introduced its audited outcomes for the full-year ended December 31, 2020, recording spectacular development throughout its prime and backside traces.
The 2020 audited financials filed on the Nigerian Stock Exchange (NSE) on Monday, confirmed that financial institution’s gross earnings grew by 10.8 % to N620.4 billion, in comparison with N559.8 billion recorded within the corresponding interval of 2019. The Bank’s complete property additionally grew by 37.0 % to N7.7 trillion for the 12 months beneath overview.
Despite the difficult enterprise surroundings throughout the Covid-19 pandemic and the resultant impact on economies globally, the Bank’s Profit Before Tax was spectacular at N131.9 billion, in comparison with N111.3 billion on the finish of the 2019 monetary 12 months. In the identical vein, the Profit After Tax rose remarkably by 27.7 % to N113.8 billion in comparison with N89.1 billion recorded on the finish of the 2019 monetary 12 months.
On the price aspect, Operating Expenses grew by 10.1 % to N249.8 billion, as towards N217.2 billion in 2019, properly beneath common inflation charge of 13.2 per cent for the 12 months, thus reflecting the financial institution’s cost-effectiveness.
In its normal custom of rewarding shareholders, the Bank proposed a ultimate dividend of N0.35 kobo for each odd share of fifty kobo. The ultimate dividend, which is topic to the affirmation of the shareholders at its Annual General Meeting, will carry the entire dividend for the 12 months to N0.52kobo because the financial institution had paid an interim dividend of N0.17 kobo earlier within the 12 months.
UBA recorded a outstanding 24 % development (to N2.6 trillion) in loans to clients, while buyer deposits elevated by 48.1 % to N5.7 trillion, in comparison with N3.8 trillion recorded within the corresponding interval of 2019, reflecting elevated buyer confidence, enhanced buyer expertise, successes from the continuing enterprise transformation programme and the additional deepening of its retail banking franchise.
Commenting on the consequence, the Group Managing Director/CEO, Kennedy Uzoka famous that the 12 months 2020 was vital for UBA Group, because it gained additional market share in most of its nations of operation.
He mentioned, “We ended a very challenging year on a reassuring note. The Bank recorded double-digit growth in both our top and bottom lines, as gross earnings and after-tax profit grew by 10.8% and 27.7% to N620.4billion and N113.8 billon respectively. Return on equity was 17.2%, even as our cost-to-income ratio moderated to 61.3%. Our earnings per share of N3.20 is a 26.8% growth from the preceding year, as we continue to ensure maximum value creation for our highly esteemed shareholders.
Continuing, Uzoka said, “Despite the tumultuous impact of Covid-19 pandemic globally and across our 23 countries of operation, we created N519.0 billion additional loans as we continued to support our customers and their businesses. Customer deposits grew 48.1% to N5.7 trillion, driven primarily by additional N1.8 trillion in retail deposits. As a global bank, we remain well capitalized and determined to successfully drive financial inclusion on the continent through our innovative products and vast network. Our capital adequacy and liquidity ratios came in at 22.4% and 44.3%, well above the respective regulatory minimum of 15.0% and 30.0%.
Speaking on the bank’s strategy, he said, “Our primary strategy will continue to focus on providing excellent services from our customers’ standpoint, putting the customer first always. Looking ahead, I am inspired by the achievements we have made since the launch of our transformation programme. We have expanded market share considerably across the geographies where we operate and are consolidating our digital banking leadership in Africa. We will continue to leverage our diversified business model and dedicated workforce to further strengthen our position as ‘Africa’s Global Bank’.”
Speaking on the efficiency, the Group Chief Financial Official, Ugo Nwaghodoh mentioned, “The persistent low interest rate environment in 2020 exerted significant downward pressure on margins. Notwithstanding, our interest income for the year grew by 5.7% (to N427.9 billion), driven by 8.2% and 7.5% year-on-year growth on interest income on loans and investment securities respectively. Our interest expense declined by 8% (to N168.4billion) driven largely by a 34.2% decline in interest expense on customer deposits in our Nigerian operations, bringing down the Group’s cost of funds to 2.9%, from 4% in 2019.
Nwaghodoh said, “We have prudently stepped-up our reserves for loan impairments, hence the 37.4% YoY growth to N22.4billion, implying a 0.9% cost of risk. These reserves provide adequate cover for impairments and should help minimise the need for further reserves in the current year, in view of the improving global operating environment. Our NPL ratio has declined to 4.7% (from 5.3% in 2019), driven by growth in the loan book, robust credit risk monitoring architecture, and payment of Past Due Obligations (PDOs).
The CFO added that as Nigeria continues to see signs of recovery from the Covid-19 pandemic led by resumption of economic activities across the globe, increase in consumer spending, and continued progress on vaccine deployment, UBA is well-positioned for greater synergy across the Group. “We remain committed to our prudent risk management practices, and optimistic of best value for our stakeholders in the days ahead,” he added.
United Bank for Africa Plc is a number one Pan-African monetary establishment, providing banking companies to greater than twenty-one million clients, throughout over 1,000 enterprise places of work and buyer touchpoints, in 20 African nations. With presence within the United States of America, the United Kingdom and France, UBA is connecting individuals and companies throughout Africa via retail; industrial and company banking; progressive cross-border funds and remittances; commerce finance and ancillary banking companies.