UBA earnings outlook for 2018 bright despite likely rate cut in Nigeria

United Bank for Africa (UBA) says its earnings outlook for 2018 is bright despite a likely rate cut in Nigeria, its home operating country, adding that its technology investment and diversification in differing regions would hold it instead for another stellar performance year-end.

Ugo Nwaghodoh, UBA’s group chief finance officer disclosed this weekend in an interactive session with the business media in Lagos. He said the bank has several new product offerings, which would drive increased transactions, especially in digital channels like Leo, its chart banking solution, which integrates banking into the lifestyles of customers.

“We have a strong pipeline of offerings that would soon be unleashed into the market,” he said, adding that the UBA mobile banking application now has facial recognition options, which guaranty safety of transactions.

According to him, Google has ranked the mobile app 4.2 percent out of 5.0, the highest among Nigerian banks, and that Apple Store has also ranked the same application high.

He said the bank’s approval to undertake wholesale banking in the UK and a full fledged subsidiary in the US puts it pole position undertake correspondent banking for other Nigerian banks UBA earnings outlook for 2018 bright despite likely rate cut in Nigeria On the bank offshore subsidiaries, Abiola Rasaq, the bank’s head of investor relations, said the bank has increased its stake in most of the subsidiaries since return from them in 2017 moved up to 45 percent of the groups earnings.

For those not doing pretty well, he said the bank in 2017 increased its investment with what he called escalator capital to drive profitability, especially in Mozambique and Congo DRC.

In unpacking the numbers in the 2017 earnings, Rasaq said improving customer service was behind the sustained strong performance the bank, which grew profit by 16 percent to N105 billion, higher than the average return on equity of 14 percent for those that have already released their audited results so far.

He said UBA is systemically important in most of the regions it operates, and that growing its loan book by 20 percent in Nigeria while the industry average loan growth was 0.2 percent indicates, the bank’s commitment to developing the economy.

The pan-African financial institution’s audited results showed gross earnings growing substantially to N462 billion, up by 20 percent from N314 billion recorded in the corresponding period of 2017.

The banking group delivered a strong 16 percent year-on-year growth in profit before tax of N105 billion, compared to N90.6 billion in the 2016 financial year. The N78.6 billion, an 8.8 percent growth year-on-year from N72.3 billion in 2016.

The bank’s subsidiaries outside Nigeria contributed a third of the Group’s top line and 45 percent of the profit for the year, a remarkable improvement from 31 percent contribution made by the ex-Nigeria offices in 2016.

This, according to market analysts affirms the success of the Bank’s expansion strategy, with a target of 50 percent contributions by 2020.

The audited results also showed that the bank’s total assets peaked at N4.07 trillion, translating into 16.1 percent year-on-year growth from the N3.50 trillion recorded in the previous financial year.

In the review period, 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. Reflecting a strong internal capital generation, the bank’s shareholders’ fund also soared 18.2 percent to N529.4 billion in the 2017 financial year.

United Bank for Africa Plc. is a leading financial services group in sub-Saharan Africa, with presence in 19 African countries, as well as the United Kingdom, the United States of America and France