The United Bank of Africa has once again asserted its position as the lion of Nigeria’s banking. Most analysts agree on that, looking at the way it cut through on economic headwinds in the first quarter of 2017. Quarterly reports, ratings, peer competitiveness, ready shareholders, and a motivated workforce are reasons the UBA will do better as leadership and market share go.
Ending 2016 with N384 billion in earnings, which was 22 percent increase from 2015’s figure, and a 32 percent rise in profit after tax to N91 billion, the bank ramped up N23 billion in the first quarter of 2017. That is 41 percent growth compared to the first quarter of 2016.
“Our performance in the first quarter of the year strengthens our optimism on economic and business recovery in Nigeria and many of our markets across Africa,” said Group Managing Director Kennedy Uzoka.
“More importantly, this result is evidence of efficiency gains in our pricing, balance sheet management and operations.”
While its Nigerian operations strengthen in terms of bottomlines, the overseas branches are equally faring well. According to Uzoka, the bank’s external operations contribute 35 percent of its earnings.
“We remained prudent in risk asset creation growing net loans by 2% year-to-date, as we have continued to monitor development in key sectors of the economy to take advantage of emerging bankable opportunities in due time,” he said while commenting on the quarterly report.
The UBA operates in 19 countries across Africa, and has branches in New York, London, and Paris. It serves millions customers in over 1000 business offices and centres where it carries out its retail, commercial and corporate banking, cross border payments and remittances, trade and finance, and other banking services.
Its flying start in 2017 further gets confirmation from Standard and Poor’s early in the month. According to the international rating agency, the UBA is rated ‘B’ in long-term and ‘B’ short-term global scale counterparty credit ratings. Analysts at Proshare said S&P’s ‘B’ rating is the highest rating currently assigned to any Nigeria-based financial institution.
“It thus reinforces the respectable quality and strength of UBA, the third largest Nigeria-based bank by total assets, deposits and profits,” the analysts said.
S&P also confirmed that UBA’s earnings will be resilient despite the economic slowdown in Nigeria. “We believe the bank’s capital and earnings under our risk adjusted capital and earnings framework will remain moderate over the next 12-18 months, with its capital adequacy ratio remaining well above minimum regulatory requirements,” the ratings agency noted.
The bank’s capital adequacy ratio was 19.7 percent at year-end 2016, way above the regulatory minimum of 15 percent. S&P believe it will remain stable over the next 12-18 months. Its showings in other indices are also superlative. Its credit losses to decline to about 1.0% in 2017-2018; its average liquidity ratio is doing well, 42 percent as of 2016; it has a stable funding ratio of 143 percent as of last December, thus becoming one of the lowest levels of loan leverage in Nigeria.
It has been a sustained rally for the bank. Which is a mark of its competitiveness in any situation. In the midst of decline Nigeria’s economy experienced last year, UBA still managed to tide over so well that it won five plaques in the Bank of The Year 2016 country awards in Gabon, Congo-Brazzaville, Senegal, Cameroon and Chad at the last annual Bankers Award in London.
Achievement trainers will make us such feat is possible when an organisation has a water-tight philosophy of goal getting. Well, the UBA has one: the three E’s—Enterprise, Excellence, and Execution.
But the GMD thinks that is not all. So he dedicated the awards to the customers whose loyalty, support and patronage, according to him, remain the fountain of the group’s growth and competitive edge in the African continent.
The UBA has over 14 million customers in Africa only. And they are well served by a synergy if technology and an army of highly motivated staff. It means a lot to the bank, especially the GMD, that its human resources remain in high spirits. As the 2016 annual report came out, and shareholders got over N19 billion in dividends, no fewer than 3000 staffers got promotion, too.
“Investment in our human capital is critical to our success,” said Uzoka.
“It is a product of our ability to invest for the long term and create an institution that is built to last. It is the bedrock of our determination to be Africa’s leading customer focused bank.”
All thing being equal, the second quarter reports can only get better.