United Bank for Africa (UBA) Plc says that it intends to achieve a 20% growth in deposits for the entire year of 2024.

Additionally, the group has stated its commitment to raising the necessary capital component in accordance with directives from the Central Bank of Nigeria.(CBN) at the appropriate time.

The capital raise initiative aligns with the efforts of other banks to bolster capital reserves in order to meet new regulatory targets.

The CBN, last month, announced minimum capital requirements for banks to strengthen the country’s financial system and enable lenders to play a bigger role in boosting economic growth.

The management of the bank made the disclosure at the full-year 2023 investor conference call presentation where it provided insights into the bank’s remarkable end-of-year 2023 financial results.

“We’re guiding a full-year deposit growth of about 20%, loan growth of about 20%, cost of risk of about 3.8%, non-performing loan ratio of about 4.5%, return on average equity of about 30%, return on assets of about 3%, capital adequacy ratio of about 30%, cost to income ratio at about 45%, and net interest margins will be about 7.5%,” it noted.

According to the Group Managing Director and Chief Executive Officer of UBA Plc, Mr. Oliver Alawuba, the bank will, in due course, raise the required component of capital in line with the CBN directives.

“I want to reiterate that United Bank for Africa is very well capitalized with shareholders’ funds in excess of N2 trillion. We wil,l in due course, raise the required component of capital in line with the Central Bank of Nigeria directives,” he said.

Alawuba noted that against a backdrop of challenging and volatile geopolitical and economic conditions, the bank delivered another year of record earnings.

“Our gross earnings and profit before tax reached their highest levels in our history. Gross earnings grew year-on-year (y-o-y) by 143.3% to N2.1 trillion and our profit before tax increased by 277.2% to N757.7 billion, asserting UBA’s position as a leading financial institution,” he said.
According to Alawuba, the growth was fueled by a significant increase in net interest income, due to a combination of a strong expansion in the loan portfolio, higher net interest margins, and a substantial contribution from foreign exchange operations.

He said the FX operations benefited from increased business activity and improved profit margins.

Alawuba added that operating costs increased by 69%, driven significantly by the substantial impact of an over 100% increase attributable to the bank’s foreign operations and FX currency-denominated expenses in domestic operations.

Executive Director, Finance and Risk Management, Ugo Nwaghodoh, in his presentations, noted that operating income rose 168% to N1.6 trillion.

Devaluation in some markets
According to him, given the inflation that has been seen globally and the devaluation in some markets, operating expenses rose 78% from N350 billion in the 2022 full year to N592 billion at the end of the 2023 full year.

Nwaghodoh stated that in spite of the headwinds, profit before tax (PBT) rose N557 billion from N201 billion in the full year 2022 to N758 billion at the end of the full year 2023. SimilarlY, profit after tax (PAT) was up to N608 billion from N170 billion same time last year. Total assets grew 90% to N20.7 trillion. Deposits also moved in the same trajectory, growing 93% to N17.4 trillion.

“I must say at this point that the valuation of the Naira, which is our reporting currency, is pivotal to some of the growth that we’ve recorded on some of these balance sheet lines. Loans and advances are also up 61% to N5.5 trillion.
Real growth on loans and advances was 15% and real growth on deposits was 56%. Shareholders’ funds now stand at N2.1 trillion from N922 billion in the correcponding period. .

We saw significant moderation in our cost-to-income ratio, from 59% to 37.2%. And cost of risk also rose from 0.63% to 3.09%,” he said.

He stated that the rise in the cost of risk was largely on the back of the fact that the lender feels that the portfolio impairment that it should carry needs to reflect the weakening in a number of economies and the impact of devaluation and removal of fuel subsidy, among others on customers’ businesses.

“And that has led to, for us, potential heightening of credit risk, which has meant that we needed to reserve much more for portfolio impairment. So, we expect that there might be some defaults somewhere down the lane, and we are reflecting all of that in the impairment numbers.

Of course, the return on equity closed at 41.1%, and the capital adequacy ratio at 32.6%. The NPL slipped from 2.95% to 5.85% largely because of some major classifications in some of the markets like Nigeria, Cameroon, and Congo DRC.
That’s why we have that at 5.85%. Included in the profits for the 2023 full year is the valuation gain coming from the valuation of our derivative portfolio, which was about N457 billion,” he said.

United Bank for Africa (UBA) posted a record N607.7 billion in annual net profit after significant increase in interest income and foreign exchange gains impacted bottom-line by as much as 256.9 per cent last year.

Gross revenue for the pan-African financial services group which, apart from its home market Nigeria, has footprints in 23 countries advanced to N2.1 trillion from N853.2 billion.

Interest income from lending and investment securities nearly doubled to N1.1 trillion, helped by the longest cycle of monetary policy rate tightening in Nigeria last year, according to the lender’s audited financials issued on Monday.

The CBN policy gave lenders the liberty to charge more for loans and allowed higher yields on fixed-income assets.

On that score, net interest income – a profitability metric measuring the difference between how much banks earn from loans and what it pays to depositors for keeping their cash, improved by 86.4 per cent.

One major dark spot in the financial result was the dramatic increase in the amount set aside to cover problematic loans whose chances of being repaid have been hampered by multiple defaults. Consequently, impairment charges for credit losses on loans soared more than seven times to N144 billion within the review period.

On account of a 70 per cent slide in the value of the naira against the US dollar last year, UBA, which holds a good part of its assets in foreign currency, recorded a jump in net trading and foreign exchange gain to N659.3 billion from N72.2 billion after converting its foreign exchange earnings into the local currency.

Pre-tax profit came to N757.7 billion, up from N200.9 billion a year ago.

UBA earned N435.9 billion in windfall gain from exchange differences on translation of foreign operations. That compares with a loss of N2 billion reported for the prior year.

The gain lifted the lender’s total comprehensive income for the year to N1.1 trillion year.

Total assets scaled up to N20.7 trillion from N10.9 trillion.

Africa’s Global Bank, United Bank for Africa (UBA) Plc, has unveiled a Quick Response solution code, qrdispute.ubagroup.com:8088 called the ‘Scan to Resolve Complaint’ Portal with code aimed at enhancing satisfaction and swiftly addressing customers’ disputes.

The first of its kind innovative platform marks another significant step by the bank to revolutionise customer service and streamline complaint resolution processes.

The ‘Scan to Resolve complaint’ portal is a QR-code-based qrdispute.ubagroup.com:8088,-portal conceptualised by the bank to proffer timely solution to customers’-challenges, without them having to visit the bank or branch.

With the portal, a variety of concerns including challenges around failed transactions will be quickly resolved from the comfort of their homes and business places.

UBA’s Head, Digital Banking, Olukayode Olubiyi, who spoke on the workings and benefits of the ‘Scan and Resolve Complaint’ portal explained that with the platform, difficulties with transactions on web, Point of sale machines (PoS) and Automated Teller Machines will immediately get responses and be treated within 72 hours.

“Our customers are at the heart of our business, that’s why we keep going the extra mile to constantly innovate in a bid to satisfy them. As the name implies, Scan and Resolve Complaint, is a solution driven portal which attends to complaints and issues of customers fast and promptly,” he explained.

He also disclosed that the portal is loaded with many benefits including ease of transactions, adding that “henceforth, customers are only required to scan and log in complaints while each complaint would be integrated into the portal register to make resolution seamless which also reduces customer hassles.”

According to Olubiyi, when these complaints are made, there will be an Instant verification process and notifications will be sent to customers while resolution will commence immediately with the overall aim to satisfy customer.

UBA’s Group Head, Customer Experience, Michelle Nwoga said the bank is always on the look-out to provide exceptional services to customers, and has over time developed various strategies to ensure that its service delivery is continuously upgraded to remain the bank of choice.

“UBA aims to provide the best value possible for its customers through a more interactive, user-friendly interface that will make countless opportunities available for the customers from the comfort of their homes,” she stated.

United Bank for Africa is one of the largest employers in the financial sector on the African continent, with 25,000 employees group wide and serving over 35 million customers globally. Operating in 20 African countries and in the United Kingdom, the United States of America, France and the United Arab Emirates, UBA provides retail, commercial and institutional banking services, leading financial inclusion and implementing cutting edge technology