UBA posts N153 billion profit, grows balance sheet by 11 per cent

United Bank for Africa (UBA) Plc has announced its audited results for the full year ended December 31, 2021, reporting impressive performance in key financial metrics.

The financial filed by the bank at the Nigerian Stock Exchange (NSE) showed that gross earnings rose to N660.2 billion, representing an increase of seven per cent compared to N616.8 billion recorded in the preceding year.

Total assets grew by 11 per cent to N8.5 trillion in the year under review, up from N7.7 trillion recorded in 2020, marking the first time the bank’s assets would cross the N8 trillion mark.

Despite challenging business environment, UBA’s profit before tax (PBT) was impressive with a 20.3 per cent growth to N153.1 billion, compared to N127.3 billion recorded in the comparative period while profit after tax (PAT) rose grew by 8.7 per cent to N118.7 billion.

Similarly, net loans grew by 7.7 per cent to N2.8 trillion while customer deposits rose by 12.2 per cent to N6.4 trillion, compared to N5.7 trillion in the corresponding period of 2020. This reflects increased customer confidence, enhanced customer experience, successes from the ongoing business transformation programme and deepening of retail banking franchise, a statement by the bank said.

In the year under consideration, the bank’s operating income rose by 10 per cent to N443 billion compared to N403 billion in the prior year, whereas operating expenses closed the period at N279 billion.

In its usual tradition of rewarding shareholders, the bank proposed a final dividend of 80 kobo for every ordinary share of 50 kobo for the financial year ended December 31, 2021. 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 N1 as the Bank had paid an interim dividend of 20 kobo earlier in the year.

Commenting on the result, the Group Managing Director/CEO, Kennedy Uzoka, said that notwithstanding the tight and challenging operating environment, UBA continues to deliver significant performance,

He said, “The year 2021 can best be described as a year of global recovery; economies around the world began to witness early-stage recoveries, as supply chains recover from the devastating disruptions suffered in 2020.

Consequently, UBA recorded a remarkable seven per cent growth in the top line to N660 billion (USD1.56bn), and profit before tax (PBT) of N153.1 billion, up 20.3 per cent from the prior year. Net Loans and advances grew by 7.7 per cent to N2.8 trillion with exposure mostly to resilient economic sectors including oil and gas, agriculture and manufacturing. Deposit from customers grew 12.2 per cent, crossing the N6 trillion mark, to N6.4trillion.”

The GMD explained that the quality of UBA’s portfolio, as well as the strength of the bank’s credit risk management frameworks and policies, remain the bedrock of the positive results that the bank has been recording over the years, adding that the current performance highlights UBA’s relentless customer focus, and leverage on its key strategic levers – People, Process and Technology.

“Looking forward, I am particularly excited about our ongoing Enterprise Transformation Program which is designed to enhance the bank’s process agility, service delivery and customer experience. We are also making sizeable investments in cutting-edge technology and cyber security, to keep our innovative digital banking offerings above the curve, as we tool and re-tool our human resources to compete and win in a rapidly changing and evolving landscape. This will ensure the bank continues to achieve respectable top and bottom-line growth through the medium to long term” the GMD stated.

UBA’s Group Chief Financial Official, Ugo Nwaghodoh, who corroborated the GMD’s comments, said, once again, the bank has shown resilience. It achieved sizeable growth and strengthened its balance sheet despite the slow pace of economic recovery that characterised the year 2021.

“Through active and diligent assets and liabilities management, the bank was able to protect its net interest margin and achieved a downward moderation of Cost of funds (CoF) by 70 basis points to 2.2 per cent from 2.9 per cent in the prior year.

According to him, the group’s capital adequacy ratio at 24.9 per cent was well above the required regulatory minimum and reflects a strong capacity for business growth. “The Group’s non-performing loan ratio improved further to 3.6 per cent from 4.7 per cent at the end of 2020. This testifies to the quality of UBA’s loan portfolio even as the bank remains relentless in its resolve to drive down the Cost-to-Income ratio, which stood at 63 per cent at the end of the year.”

Nwaghodoh added that the bank achieved further strides in growing its business and gaining market share across its pan-African operations, with the region accounting for 63.2 per cent of the Group’s profitability, compared to 55.4 per cent in 2020; Loans and advances, as well as Deposit in the region, were also up 14.5 per cent and 27.3 per cent respectively from a year earlier.

In his concluding remarks, the CFO stated: “We recognise the changing competitive landscape and are proactively positioning to consistently deliver on our strategic objectives and commitment to shareholders.”

United Bank for Africa Plc is Africa’s global bank, offering banking services to more than twenty-five million customers, across over 1,000 business offices and customer touchpoints in 20 African countries. With a presence in the United States of America, the United Kingdom and France and more recently the United Arab Emirates, 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.