United Bank for Africa (UBA) Plc, has assured its local and international investors that it’s prudent focus on improved asset quality as well as continuous adoption of strict cost efficient measures will help it achieve objectives and priorities for the 2019 financial year and beyond. This, the bank said will culminate in an institution with even stronger indices and capacity to earn strong double-digit growth in annuity-based trade services, enhanced offerings and improved customer service.
Already, the bank has instituted a number of enhanced risk management and control frameworks which have in no small measure contributed to its financial performances and overall balance sheet growth over the years.
The Group Managing Director/Chief Executive Officer, Mr. Kennedy Uzoka, who noted this in a submission at the presentation of the bank’s 2018 full year results and international investor/ analysts conference call on Thursday, explained that UBA’s well diversified asset book supported by stable funding structure, placed it in a premium position to perform remarkably despite the falling economic indices in its various operating environment.
He said, “In spite of slow recovery in economic activities in Nigeria (our single largest market), the Group’s total assets has grown by 19.7per cent, driven largely by a strong deposit growth of 23per cent, as the drive for retail deposits continue to yield desired results. Leveraging enhanced customer service, the Group grew retail deposits by 48 per cent, thus strengthening the funding base and providing the foundation for lower cost of funds in 2019.
“Notably, the growth in balance sheet also partly reflects the impact of exchange rate difference between the reporting dates (2017: N331/USD vs. 2018: N359/USD), as 37 per cent of loans and 27per cent of overall balance sheet is FCY-denominated. The Group maintained its appetite for a well-diversified balance sheet, with over 60per cent in liquid, low risk instruments.”
Uzoka explained to the investors that the bank recorded impressive growths achieved across major financial lines, recording a 48 percent year-on-year growth in retail deposits and improved CASA ratio to 77 percent.
Meanwhile in its results for the year end December 2018, UBA gross earnings grew by 7.0 percent to N494.0 billion, compared to N461.6 billion recorded in the corresponding period of 2017. The bank’s total assets also grew significantly by 19.7 percent to an unprecedented N4.9 trillion for the year under review
On how the financials were recorded, Uzoka stated that gross earnings rose by 7per cent year-on-year, despite regulatory and market conditions which undermined the non-interest income line. Interest income, which contributed 73per cent of gross earnings, grew by 11per cent, driven by strong interest income on treasuries, reflecting the low-risk appetite and treasury-led strategy adopted during the year. He noted that the lower non-interest income was occasioned by market condition and regulatory impact on FX trading income, adding that growing volume on FX trading was compensating for lower margin on this business, thus reinforcing the bank’s positive growth expectations on this income line in 2019. While speaking on the strength of the financial institution in the coming years, especially on the back of it’s African and non-African subsidiaries, Uzoka said the bank’s recent foray into key markets and economies remain a milestone that will catapult the institution in the coming years.