United Bank for Africa Plc (UBA) has announced audited results for the full-year ended December 31, 2020, recording N132 billion profit.
According to a statement, the bank said despite the challenging business environment during the COVID-19 pandemic, the bank’s Profit Before Tax (PBT) was N131.9bn compared to N111.3b earned in the 2019 financial year.
The results filed at the Nigerian Stock Exchange (NSE) on Monday, showed that the bank’s gross earnings grew by 10.8 per cent to N620.4b, compared to N559.8bn in 2019. The Bank’s total assets also grew by 37% to N7.7 trillion in 2020.
Its Profit After Tax (PAT) rose by 27.7% to N113.8b compared to N89.1b in 2019. Its operating expenses grew by 10.1% to N249.8b, as against N217.2b in 2019, well below the average inflation rate of 13.2 per cent for the year, thus reflecting the bank’s cost effectiveness, it stated.
The Bank proposed a final dividend of N0.35 kobo for every ordinary share of 50 kobo. The final dividend, which is subject to the affirmation of the shareholders at its Annual General Meeting, will 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.
UBA recorded a remarkable 24 per cent growth (to N2.6 trillion) in loans to customers, whilst customer deposits increased by 48.1 per cent to N5.7 trillion, compared to N3.8 trillion 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/CEO, Kennedy Uzoka noted that the year 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% 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 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).
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 leading Pan-African financial institution, offering banking services to more than twenty-one million customers, across over 1,000 business offices and customer touchpoints, in 20 African countries. With presence in the United States of America, the United Kingdom and France, UBA is connecting people and businesses across Africa through retail; commercial and corporate banking; innovative cross-border payments and remittances; trade finance and ancillary banking services.