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Performance in 2017 financial year driven by prudent balance sheet management—UBA

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More facts have emerged on why Africa’s global bank, the United Bank for Africa (UBA) Plc., grossed earnings in the recently released 2017 financial results.

According to the Group Chief Finance Officer (CFO) of the bank, Mr. Ugo Nwaghodoh, “the pan-African lender’s improved performance in the 2017 financial year cannot be unconnected to prudent balance sheet management, among other things”.

Business Hilights recalls that the financial power house jumped its gross earnings to N462bn, making a 20 per cent growth in overall revenue for the year under review.

Besides, Nwaghodoh traced the feat further to growth in loan book and treasury assets, as well as efficient balance sheet management, stressing that the lender recorded a 23 per cent growth in interest income which is about N62bn.

He said “The yield environment was positive and relatively high during the first half of the year. Despite growing our revenue, we also had strong control on our cost of funding. The banking business is intermediation. How efficient you are in the intermediation process is very vital. This borders on how much you bought money and sold money.

“Cost of funding was kept under significant check despite the tight liquidity environment you saw in the second half of the year. We were able to keep our weighted average cost of fund at 3.7 per cent. We kept it constant from 2016 in a market where fixed deposit interest rate went as high as 20 per cent. That efficiency in interest income and cost of funding side led to a net interest income growth of about 25 per cent.”

In his presentation at a recent press briefing, the Head, Investor Relations, Mr. Abiola Rasaq, said the lender had also taken decisive steps to expand and deepen its overseas operations in the United Kingdom and the United States and insisted that the feat means that the bank is set to record more business from its operations in those jurisdictions.

Business Hilights recalls that the bank recently secured an operating licence in the UK.

According to Rasaq, “We took a decisive step to expand our business in London. We have a subsidiary in London, which is in addition to the New York office. To the best of our knowledge, we are the only Nigerian bank that has a deposit-taking licence in the United States. No other bank in Nigeria does that. And we say that proudly because today, we also service the correspondent banking needs of a number of Nigeria banks in the USA because of our deposit-taking licence.

“So what we did was to take our business in the UK a little further by applying to the UK Prudential Regulation Authority, which is more or less like their central bank. We applied to the PRA and invariably to the Financial Conduct Authority of the UK. Just early this year, we were given the authorisation to deepen and expand our business in the UK. We are happy to say that 2018 going forward, you will see more business going through our UK business.”

On developments in the mobile banking division, he averred that UBA’s mobile banking app was ranked the highest at 4.2 among other Nigerian banks’ apps in the Google Play Store.

Continuing, he noted that “There is lot of things we are doing around our digital banking, because we have seen that this is the way to go; that if the future of banking.  To that extent, the best thing to do is to continue to go digital, so that we can serve our customer best”.

Business Hilights is an online news channel conceptualized and structured to report and track on a daily basis; latest developments in critical business sectors to serve as a one stop news gateway for governments, foreign and indigenous investors.