The Group Managing Director and Chief Executive Officer of UBA Plc, Oliver Alawuba, said 2023 was marked by geopolitical tensions, inflation spikes, and the transformative emergence of technologies such as generative AI, yet, the bank not only navigated these challenges but also achieved unprecedented financial milestones.
According to Alawuba, the bank’s gross earnings grew by a remarkable 143.3 per cent year-on-year, reaching N2.1 trillion, with profits before tax surging 277.2 per cent to N757.7 billion.
He said despite the harsh economic conditions impacting many regions where UBA operates, particularly in Sub-Saharan Africa, the bank managed to maintain a Non-Performing Loan (NPL) ratio of 5.85 per cent, underscoring the strength of its asset quality.
The Executive Director of Finance and Risk Management at United Bank for Africa (UBA) Group, Ugo Nwaghodoh, detailed the financial outcomes and strategic insights following the group’s impressive performance for the fiscal year 2023.
Nwaghodoh announced that UBA Group’s gross earnings have more than doubled, surging 143 per cent to reach N2.1 trillion, driven by significant growth in both funded and non-funded transactional incomes.
This is just as the operating income followed suit, witnessing a 168 per cent increase to N1.6 trillion. He said despite the challenges of global inflation and currency devaluation in various markets, UBA managed to control operating expenses, which rose by 78 per cent to N592 billion.
Nevertheless, Nwaghodoh said, the bank’s pre-tax profits soared to N758 billion, up from N201 billion in the previous year, with after-tax profits reaching N608 billion, a substantial rise from N170 billion reported last year.
According to him, the total assets of the bank saw a 90 per cent increment, amounting to N20.7 trillion, with deposits growing by 93 per cent to N17.4 trillion He said loans and advances to customers increased by 61 per cent to N5.5 trillion, reflecting a real growth of 15 per cent, while deposits experienced a real growth rate of 56 per cent.
Nwaghodoh explained that the bank’s robust financial performance can largely be attributed to the strategic foresight in its operations and the pivotal role of the Naira’s valuation, adding that the shareholder funds also experienced a significant boost, now standing at N2.1 trillion, up from N922 billion.
He said a noteworthy improvement was seen in the bank’s cost-to-income ratio, which moderated from 59 per cent to 37.2 per cent . Nwaghodoh stated that however, the cost of risk increased from 0.63 per cent to 3.09 per cent, a reflection of anticipated credit risks due to economic downturns in several operational regions, including Nigeria, Cameroon, and Democratic Republic of Congo (DRC).
He said the bank also reported a non-performing loan (NPL) ratio increase from 2.95 per cent to 5.85 per cent, attributing it to major classifications in certain markets, while the derivative portfolio also contributed a valuation gain of about N457 billion to the profits.
Breaking down the earnings components, Nwaghodoh highlighted that non-interest income made up 48 per cent of earnings, with the remainder from interest income.
He said the bank’s trading and revaluation gains saw remarkable growth, particularly from fixed income security and foreign exchange trading. Looking ahead to the financial year 2024, he said, the UBA Group projects continued strong performance with an expected deposit and loan growth of 20 per cent, a cost of risk anticipated at 3.8 per cent, and aiming for a non-performing loan ratio of about 4.5 per cent. He said the bank also targets a return on average equity of 30 per cent, showcasing confidence in maintaining profitability amidst expanding operations.
“This outlook sets the stage for continued strategic expansion and reinforces our commitment to securing a dominant position as a systemically important bank in every market we operate,” Nwaghodoh stated.
