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UBA posts N462b earnings, foreign operations contribute 45 per cent

United Bank for Africa

United Bank for Africa Plc has posted gross earnings of N462 billion in 2017 financial year, up by 20 per cent from N314 billion in 2016, with 45 per cent of the income contributed by foreign subsidiaries.

The feat, recorded by the pan-African banking group, came at a time when other banks are scaling down offshore operations due to costs and profitability concerns.

The bank’s profit before tax also settled at N105 billion in the period under review, against N90.6 billion in 2016, while profit after tax rose to N78.6 billion, showing 8.8 per cent rise, compared to N72.3 billion in 2016.

The bank’s offshore subsidiaries’ contribution, which is a third of the group’s top-line and 45 per cent of the profit, has been described as a remarkable improvement from 31 per cent recorded in 2016, even as it targets a 50 per cent contribution by 2020.

The Group Chief Finance Officer, Ugochukwu Nwaghodo, while speaking with select journalist in Lagos, explained that the group’s performance was rallied by improved interest and non-interest income, including its treasury assets, declining costs of fund, discounting of foreign exchange futures and strong e-channel network.

He said that the improving economic fundamentals have put the bank in stead for a much better outcome in 2018, especially with planned increase in lifestyle products’ offerings through digital channels.
Reiterating the achievements of 2017 operations, the bank chief said that there is a strategic alliance now with relevant financial technology companies, the pioneered chart banking- Leo, which currently is recording a significant uptake and the newly acquired banking license in the United States.

“In a period of high interest rates, we achieved a relatively low 3.7 per 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 stabilised 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 10 per 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 19 per cent and a liquidity ratio of 50 per cent, well ahead of 15 per cent and 30 per cent regulatory requirement respectively. Our disciplined approach to lending and broader risk management continues to uphold our asset quality,” he said.

The audited results also showed that the bank’s total assets rose to N4.07 trillion, translating into 16.1 percent year-on-year growth from the figure of N3.50 trillion recorded as at 2016 financial year.
In the 2017 financial year, the Bank’s Net loans achieved a prudent 9.7 percent growth at N1.65 trillion, while the customer deposits grew to N2.73 trillion, representing 10 percent year-on-year growth on N2.49 trillion recorded in 2016 financial year.

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