The United Bank for Africa recorded mixed fortunes in its performances 2020 between the Group and the Bank, with one recording about 26.24 percent increase against a decline of about 43.83 percent of the other.
Consolidated and Separate Financial Statements of the Bank for the year ended December 31, 2020 published on the Nigerian Stock Exchange (NSE) on Monday showed total comprehensive income for the Group in 2020 grew by about a N32.65 billion (26.24 percent), compared to a decline by N48.65 billion (about 43.83 percent) by the Bank.
Details of the publication obtained by MEDIATRACNET showed the Group’s comprehensive earnings increased from N124.44 billion in 2019 to about N157.09 billion during the year under review.
The comprehensive income included profit before tax of N131.9billion, from N111.3billion in 2019 and income tax expenses of N18.1billion from N22.2billion in 2019.
However, the performance of the Bank declined, with comprehensive income dropping from about N70.1billion in 2019 to N58.4billion, while profit for the year was down from N62.8billion to N56.9billion.
Consequently, the directors of the bank in their report have proposed a final dividend of N0.35 per share to qualified investors in line with the provisions of Section 379 of the Companies and Allied Matters Act (CAMA).
The amount includes N0.80 per share payout from the retained earnings account for 2019.
The proposed final dividend, and the N0.17 per share interim dividend paid in September 2020, the directors said, would be presented to shareholders for approval at the next Annual General Meeting.
Total assets of the Bank Group rose from N5.6trillion to N7.7trillion compared with the Bank’s asset base, which grew from N4.1trillion in 2019 to N5.2trillion.
The Group Managing Director/CEO, Kennedy Uzoka said the year 2020 was important for UBA Group, as it gained further market share in most of its countries of operation.
“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 billion 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,” he 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,” hr added.
Uzoka said the bank remains well capitalized and determined to successfully drive financial inclusion on the continent through its innovative products and vast network.
He said the Bank’s capital adequacy and liquidity ratios stood at at 22.4 percent and 44.3 percent respectively, well above the corresponding minimum regulatory threshold of 15.0 percent and 30.0 percent.
On the bank’s strategy, he said the focus would continue to be providing excellent services from the customers’ standpoint, putting the customer first always.
Looking ahead, he said the Band would continue to be inspired by its achievements under its transformation programme, which resulted in the considerable expansion of market share across the geographical location of their operations.
“We will continue to leverage our diversified business model and dedicated workforce to further strengthen our position as ‘Africa’s Global Bank’,” he said.
The Group Chief Financial Official, Ugo Nwaghodoh said the persistent low-interest-rate environment in 2020 exerted significant downward pressure on the Bank’s margins.
Regardless, he said its interest income for the year grew by 5.7 percent (to N427.9 billion), driven by 8.2 percent and 7.5 percent year-on-year growth on interest income on loans and investment securities respectively.
Besides, he said interest expense declined by 8 percent (to N168.4billion) driven largely by a 34.2 percent decline in interest expense on customer deposits in its Nigerian operations, bringing down the Group’s cost of funds to 2.9 percent, from 4 percent in 2019.
“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 minimize 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),” Nwaghodoh said,
He said as Nigeria continues to see signs of recovery from the COVID-19 pandemic led by the 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.