BEVERLY HILLS, March 09, (THEWILL) – The United Bank for Africa Plc (UBA) has announced that its Profit Before Tax (PBT) rose to N131.9bn by the end of the 2020 financial period from N111.3bn at the end of the 2019.
The bank made these known in its 2020 audited financial statement filed at the Nigerian Stock Exchange (NSE) on Monday.
It stated, “Despite the challenging business environment during the COVID-19 pandemic and the resultant effect on economies globally, the bank’s profit before tax was impressive at N131.9bn, compared to N111.3bn at the end of the 2019 financial year.
“In the same vein, the profit after tax rose remarkably by 27.7 per cent to N113.8bn compared to N89.1bn recorded at the end of the 2019 financial year.”
The 2020 audited financial statement also showed the bank’s gross earnings grew by 10.8 per cent to N620.4bn from N559.8bn recorded in the corresponding period of 2019. Its total assets also grew by 37 per cent to N7.7tn for the year under review.
On the cost side, it stated, operating expenses grew by 10.1 per cent to N249.8bn from N217.2bn in 2019, well below average inflation rate of 13.2 per cent for the year, reflecting the bank’s cost effectiveness.
The bank said in its tradition of rewarding shareholders, it proposed a final dividend of N0.35 kobo for every ordinary share of 50 kobo.
The final dividend, which was subject to the affirmation of the shareholders at its annual general meeting, would bring the total dividend for the year to N0.52kobo as the bank had paid an interim dividend of N0.17 kobo earlier in the year, it stated.
UBA recorded 24 per cent growth (to N2.6tn) in loans to customers, while customer deposits increased by 48.1 per cent to N5.7tn, compared to N3.8tn recorded in the corresponding period of 2019, reflecting increased customer confidence, enhanced customer experience, successes from the ongoing business transformation programme and the further deepening of its retail banking franchise.
Commenting on the result, the Group Managing Director/Chief Executive Officer, Kennedy Uzoka, noted that 2020 was important for UBA Group, as it gained further market share in most of its countries of operation.
He said, “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 per cent and 27.7 per cent to N620.4bn and N113.8bn respectively.
“Return on equity was 17.2 per cent, even as our cost-to-income ratio moderated to 61.3 per cent.”
He added that the earnings per share of N3.20 was 26.8 per cent higher than that of the preceding year.
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 performance, the Group Chief Financial Official, Ugo Nwaghodoh said, “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).”