The banking community didn’t see it coming. In the face of the current turbulent economic headwinds, even banks like other organisations are struggling to be profitable. The UBA Bank emerged as the most profitable bank in the half of the year and probably would end the year high on profits.
For a bank to tower above its peers and sit atop the ladder of profitability, is no mean feat. This the UBA has achieved to shareholders’ delight.
In its audited result released to the Nigerian Exchange Limited (NGX) on Tuesday for the half year ended June 30, 2023, the bank’s Profit-before-tax stood at N404 billion, representing a 371 percent increase.
The bank’s annualised return on average equity of 57.7 percent whilst its shareholders’ funds grew to N1.712 trillion, reflecting the Group’s strong capacity for internal capital generation.
UBA’s customer deposits peaked at N11.14 trillion, representing a sharp growth of 42.4 percent whilst its total assets grew to N15.38 trillion.
Based on the impressive result, the bank declared an interim dividend of 50k per share compared to 20k last year – representing an annualized interim dividend yield of 7.2 percent.
Strong contributions to Group profit from UBA’s operations in 20 African countries, UBA America, UBA UK, UBA UAE, UBA France. Demonstrating once again the effectiveness of UBA’s global strategy and positioning as the financial intermediary for Africa and the rest of the World – delivering on Tony Elumelu’s long term strategy and vision for the bank.
Mr. Elumelu’s business and investment approaches even the Chairman of the UBA Group has paid off handsomely.
At one of the Bank’s annual general meetings, Mr. Elumelu said “The bank’s strategic investment decisions over the past few years have indeed translated to huge returns for its investors, despite the challenging business environment witnessed in the last two years.”
“I am proud of how as a Group, we have been able to further consolidate on the new capabilities we have built, novel customer solutions we have deployed, efficiency gains recorded, and the growth prospects we have leveraged from a recovering world,” he had said.
“These were the building blocks for the very strong financial performance and the growth delivered by your Group in 2021, further confirming the wisdom of the investments we made and the strategy we have pursued, to ensure the diversification and sustainability of our business model.”
“Our goal is to continue to build strong brand loyalty with our customers and create additional value for our shareholders, whose underlying support has positioned UBA for continued growth,” he had said.
Commenting on the bank’s H1 result, the UBA’s Group Managing Director/Chief Executive Officer, Mr. Oliver Alawuba commenting on the results said the exceptional performance underscored the Group’s commitment to consistently deliver value to its shareholders; he added that the Group made progress in digital payments, retail penetration and also benefitted from the effect of revaluation gains, arising from the harmonization of foreign exchange rates at the different access windows in Nigeria.
He said, “The Group recorded strong double-digit growth in revenues and profits from its operations, the result also reflects the effect of sizeable revaluation gains, arising from the harmonization of currency exchange rates in Nigeria. Our reporting currency found a new exchange level at about N756 to 1US$ as of 30 June 2023, compared to N465 at the beginning of the year. The results again demonstrate the benefits of our long-held diversification strategy across Africa and globally. The growth of our international business, most recently in the UAE, only reinforces this earnings quality.
Continuing he added, “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 providing a versatile last-mile distribution network for Africa-bound donor and multilateral agency funds.”
“The three core geographical pillars of our business (Nigeria, the Rest of Africa and the Rest of the World) are making strong contributions to the Group 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.
On the plans for the rest of the year, Alawuba said, “As we approach the last quarter of the year, the Group remains strategically positioned to sustain the strong performance, consolidating on H1 2023 results, to deliver superior returns to our esteemed shareholders.”
UBA’s Executive Director of Finance & Risk, Ugo Nwaghodoh, said the half-year 2023 financial numbers reflect an excellent performance across key metrics, as the bank diligently executes its strategic priorities.
“Our HY2023 financial numbers reflect excellent performance across key metrics, as we diligently execute our priorities for the year. Annualized return on average equity at 57.7% was bolstered by improved operating income and revaluation gains,” he explained.
Nwaghodoh also pointed out that the Group maintains robust capital buffers to support business growth and loss absorbency. The Group’s shareholders’ funds stood at N1.7trillion, with a capital adequacy ratio of 36.4%”.
