Intending investors are expectant of the United Bank for Africa (UBA) return to the market as the lender has disclosed that it is at advanced stage with recapitalisation process.
“Our application has been submitted to SEC and we expect their approval in the next couple of weeks following which the market will be advised, says the Group Managing Director, UBA Mr. Oliver Alawuba.
During the Banks Investors’ Conference held on recently, Alawuba stated that despite global economic challenges, including high inflation and political instability across some regions in Sub-Saharan Africa, UBA achieved double-digit growth, strengthening its position in the banking industry.
During the conference, he highlighted the economic environment, both globally and regionally, and the strategic execution that has driven the bank’s strong financial performance.
“We have remained resilient and focused on executing our strategy, driven by our commitment to the principles of Enterprise, Excellence, and Execution,” he stated.
According to him, looking ahead, the group is confident of a positive Outlook for the Second Half of 2024.
As UBA enters the second half of the year, it does so from a position of strength he said, adding that the bank is well-positioned to continue its growth trajectory, with an emphasis on market leadership and customer satisfaction.
UBA is committed to full-year targets of 45 percent deposit growth, 40 percent loan growth, and a Return on Average Equity of 28 percent.
Giveing breakdown of the bank’s financial Performance, Alawuba noted that UBA recorded Strong Growth Across All Key Metrics.
Profit Before Tax surged to N401.6 billion, an impressive reflection of the bank’s effective risk management despite macroeconomic pressures.
Customer Deposits grew by 34 percent increasing from N17.4 trillion at the end of 2023 to N23.2 trillion in H1 2024, a sign of strong customer trust and loyalty.
Total Assets rose by 37 percent, reaching N28.3 trillion, up from N20.7 trillion at the end of 2023. Net Interest Income experienced significant growth, expanding by 143 percent year-on-year to N675 billion, further demonstrating the bank’s strength in its core banking operations.
Further breakdown shows that in digital banking, UBA reported a 107.8 percent year-on-year growth in income, highlighting the bank’s leadership in digital transformation and financial inclusion.
On digital banking and Innovation, UBA’s investment in technology and innovation has paid off significantly, as income from digital banking and payments saw a dramatic increase, with funds transfer fees rising by 188.7 percent and remittance fees jumping by 228 percent.
Alawuba emphasized that UBA’s strategy of leveraging technology and data analytics is a key driver of this growth, helping to boost financial inclusion across Africa.
UBA’s focus on trade facilitation also showed promising results, with income from trade transactions growing by 83 percent to N18 billion, reaffirming the bank’s pivotal role in regional and international trade.
According to the GMD, the bank’s strategic partnerships continue to propel its growth. UBA is a key partner in the Pan-African Payment Settlement System (PAPSS), enhancing cross-border trade and financial integration across Africa.
Additionally, UBA has expanded its collaborations with telecommunications companies, with funds under management now exceeding $1 billion.
“UBA’s commitment to Environmental, Social, and Governance (ESG) initiatives remains strong. “At UBA, we are determined to ‘do good’ by supporting inclusivity and environmental sustainability. We have pledged to plant One Million Trees over the next one year as part of our environmental stewardship.
“We continue to roll out our Braille account opening packages to more countries, promoting inclusivity for visually impaired customers. Our loans to young entrepreneurs, women-led businesses, and SMEs across Africa are part of our broader commitment to driving inclusive growth,” he stated.
UBA’s achievements in the first half of 2024 have been recognized through several prestigious awards, including Global Finance’s Best Bank in Frontier Markets and Best SME Bank in Africa.
These accolades affirm UBA’s leadership in the banking sector and its focus on delivering value across its diverse markets.
In his closing remarks, Alawuba expressed gratitude to UBA’s employees, customers, and shareholders, pledging continued dedication to achieving even greater milestones in the months ahead.
At another forum, Alawuba disclosed that in recent years, Nigerian banks have faced challenges from both external shocks (such as the global pandemic, volatile oil prices, and global monetary tightening) and internal pressures like inflation and Naira depreciation.
But the current recapitalisation initiative in the sector according to him, is not just about compliance with regulatory requirements, but about equipping the banking sector with the financial strength to be a reliable engine for economic transformation.
He said that with a stronger capital base, banks will have the cushion to withstand both external and internal shocks.
“This resilience is critical to maintaining market confidence and ensuring that the financial system can continue to function even during times of crisis. We saw the importance of this during the global financial crisis and the COVID-19 pandemic.
“A robust capital base also attracts foreign investments, as global investors seek stability and growth opportunities, “ he stated.
The recapitalization policy must lead to a significant expansion in the provision of credit to the real sector, particularly in Agriculture, Manufacturing, and Infrastructure.
Currently, Nigeria’s economy faces a productivity gap.
According to the Nigerian Bureau of Statistics, the Manufacturing Sector for example, contributed about 12.68percent to the nominal GDP as of Q2 2024 (down from 14.55percent in Q2 2023 and lower than the 14.79percent recorded in Q1 2024 and 16.04percent recorded in Q4 2023.
This according to Alawuba, is far below the level required to drive industrialisation and economic diversification.
With larger capital bases, Nigerian banks should be well-positioned to finance long-term infrastructure projects and provide low-cost credit facilities to businesses that will drive industrial growth he added.
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