United Bank for Africa (UBA) Plc, Africa’s Global Bank, has announced an impressive performance in key financial parameters in its 2021 full year report, which ended on December 31, 2021.
The Tier-1 bank reported a 20.3 percent increase in profit before tax (PBT) to N153.1 billion in its audited results submitted to the Nigerian Exchange on Friday, compared to N127.3 billion at the end of the previous year.
Similarly, profit after tax (PAT) increased by 8.7% in 2021 to N118.7 billion, up from N109.2 billion in 2020.
Despite the difficult business environment and slow economic recovery in most of its operating countries, gross earnings increased by 7% to N660.2 billion at the end of the 2020 financial year, compared to N616.8 billion at the end of the previous year.
Total assets followed the same upward trend, reaching an all-time high of N8.5 trillion in the year under review, up from N7.7 trillion in 2020.
This is the first time the bank’s assets have surpassed N8 trillion, indicating sound resource management decisions and a relentless pursuit of customer deposits.
According to the report, net loans increased by 7.7% to N2.8 trillion, while customer deposits increased by 12.2% to N6.4 trillion, compared to N5.7 trillion in the same period in 2020.
This is due to increased customer confidence, improved customer experience, achievements from the ongoing business transformation program, and the expansion of its retail banking franchise.
Operating income increased by 10% to N443 billion from N403 billion the previous year, while operating expenses remained unchanged at N279 billion.
For the fiscal year ending December 31, 2021, the Global Bank proposed a final dividend of 80 kobo per ordinary share of 50 kobo.
The final dividend, which is subject to shareholder approval at the bank’s Annual General Meeting, will bring the total dividend for the year to 100 kobo, after the bank paid a 20 kobo interim dividend earlier in the year.
Kennedy Uzoka, Group Managing Director/CEO, commented on the results, saying that despite the tight and challenging operating environment, UBA continues to deliver significant results.
“The year 2021 can best be described as a year of global recovery,” he said, “as supply chains recover from the devastating disruptions suffered in 2020.”
As a result, UBA’s top line increased by 7% to N660 billion (USD1.56 billion), with profit before tax (PBT) of N153.1 billion, up 20.3 percent from the previous year. Net Loans and Advances increased by 7.7% to N2.8 trillion, with a focus on resilient economic sectors such as oil and gas, agriculture, and manufacturing. Customers’ deposits increased by 12.2%, crossing the N6 trillion mark to N6.4 trillion.”
The GMD stated that the bank’s portfolio quality, as well as the bank’s credit risk management frameworks and policies, remain the bedrock of the bank’s positive results over the years, and that the current performance highlights UBA’s relentless customer focus and leverage on its key strategic levers – People, Process, and Technology.
“In the future, I’m particularly enthusiastic about our ongoing Enterprise Transformation Program, which aims to improve the bank’s process agility, service delivery, and customer experience.” We’re also investing heavily in cutting-edge technology and cyber security to stay ahead of the curve with our innovative digital banking offerings, as well as retooling and retooling our human resources to compete and win in an ever-changing and evolving landscape. The bank will be able to maintain respectable top and bottom-line growth in the medium to long term as a result of this, according to the GMD.
UBA’s Group Chief Financial Official, Ugo Nwaghodoh, echoed the GMD’s remarks, saying the bank has shown resilience once again. Despite the slow pace of economic recovery that characterized 2021, it achieved significant growth and strengthened its balance sheet.
“The bank was able to protect its net interest margin and achieve a downward moderation of Cost of funds (CoF) by 70 basis points to 2.2 percent from 2.9 percent in the prior year thanks to active and diligent asset and liability management.”
According to him, the group’s capital adequacy ratio of 24.9 percent was well above the regulatory minimum and reflected a strong ability to grow the business. “By the end of 2020, the Group’s non-performing loan ratio had dropped to 3.6 percent from 4.7 percent. This demonstrates the strength of UBA’s loan portfolio, even as the bank continues to pursue its goal of lowering the Cost-to-Income ratio, which was 63.0 percent at the end of the year.”
Nwaghodoh went on to say that the bank made more progress in growing its business and gaining market share across its pan-African operations, with the region accounting for 63.2 percent of the Group’s profitability, up from 55.4 percent in 2020; loans and advances, as well as deposits, were up 14.5 percent and 27.3 percent, respectively, from the previous year.
“We recognize the changing competitive landscape and are proactively positioning to consistently deliver on our strategic objectives and commitment to shareholders,” the CFO said in his closing remarks.
In the face of fierce competition, UBA is investing heavily in technology to explore the vast opportunities in modern financial services.
