…proposes a final dividend of N0.65
By Kayode Tokede
United Bank for Africa Plc (UBA) has reported 8.8 per cent growth in profit after tax to N78.6 billion in financial year ended December 31, 2017 compared to N72.3 billion in 2016 financial year.
The pan African bank Profit Before Tax also gained 16.1 per cent to N105.3 billion, compared to N90.6 billion in 2016 over increased Gross Earnings and operating income.
UBA’s gross earnings gained 20.3 per cent to N461.6 billion in 2017, compared to N383.6 billion in 2016 as Operating Income closed 2017 at N326.6 billion, after gaining 20.6 per cent from N270.9 billion reported in 2016.
The financial institution however proposed a final dividend of N0.65 per share (31 December 2016: N0.55 per share) from the retained earnings account as 2017.
This proposed final dividend and the N0.20 per share interim dividend paid in September 2017 will be presented to shareholders for approval at the next Annual General Meeting in Lagos.
Commenting on the result, GMD/CEO, Mr. Kennedy Uzoka, said, “This set of results, underlines the success of our strategy of expanding across Africa, diversifying revenues and capturing the broader business opportunities inherent in Africa’s growth.
“The results reinforce the sustainability of our business model and the capacity to deliver superior long-term return to shareholders, as the economic and business environment improves.
“In 2017, we made strong progress in our strategic initiative of dominating transaction banking across all our countries of operation, gaining market share in all lines of our business.
“Even as the non-oil sectors of our largest country of operation, Nigeria, remained relatively weak, we still grew earnings by 20per cent to N462 billion, a third of which is attributable to non-funded income.
“I am particularly excited by the strong performance of our subsidiaries. Our banking operations outside of Nigeria contributed a third of the Group’s top-line and 45per cent of the profit for the year.
“Our flagship subsidiaries are increasingly becoming systemically important in their respective markets, and we are leveraging customer-centric strategies, speed to market, innovation and an exceptional culture of enterprise to consolidate our market share.
“We are emerging as a clear leader in digital banking offerings, as we leverage on new technologies and strategic alliances, to provide products and services that provide convenience and empowerment to our customers. Whilst we continue to invest in the future of the business, we remained focused on cost efficiency and we are on track to deliver our medium term cost-to-income ratio (CIR) target.
“We closed 2017 with 58per cent CIR, despite the impact of Naira devaluation, on the cost of doing business in Nigeria. Overall, we achieved a profit before tax of N105.3 billion, translating to 16per cent return on average equity.
“Importantly, we are optimistic on the future earnings capacity of the Group, as our entrenched approach to customer engagement positions us for sustainable growth.”
Also speaking on UBA’s financial performance and position, the Group CFO, Ugo Nwaghodoh said, “In a period of high interest rates, we achieved a relatively low 3.7per cent cost of funds.
“This operational efficiency reflects the benefit of our rich pool of stable savings and current account deposits. The net interest margin stabilized at seven per cent, even as yields on treasury assets dropped in the last quarter of 2017.
“Our core transaction banking offerings gained strong momentum, with income from these business lines growing by double digits.
“We remain committed to our responsible approach to balance sheet management, with focus on growing risk asset and broader balance sheet in a profitable and prudent manner. Amidst a subdued Nigerian credit market, we grew our loan portfolio by 10per cent, leveraging our robust liquidity and capitalization to support good businesses through this challenging economic cycle.
“We closed the year with a Basel II capital adequacy ratio of 19per cent and a liquidity ratio of 50per cent, well ahead of 15per cent and 30per cent regulatory requirement respectively. Our disciplined approach to lending and broader risk management continues to uphold our asset quality.”