Business a.m.
Africa’s leading financial institution, United Bank for Africa (UBA) Plc, has released its 2023 financial results, which revealed a significant increase in its gross earnings. Despite the financial turbulence experienced in the banking sector, UBA’s gross earnings rose by 143 percent to N2.08 trillion in 2023, compared to N853.2 billion in 2022.
The 2023 financial results, filed by the bank to the Nigerian Exchange Limited (NGx), exhibited a remarkable and robust performance across all key metrics. The bank’s total assets appreciated 90.22 percent, soaring from N10.86 trillion in 2022 to N20.65 trillion by the end of 2023. The commendable increase was attributed to UBA’s continued strength and resilience, as well as its ability to effectively navigate the increasingly complex financial landscape.
UBA also recorded an outstanding profit before tax (PBT) in the year under considereration, growing by 277 percent to N758 billion, from N201 billion in 2022. The significant improvement in PBT was further reflected in the bank’s profit after tax (PAT), which rose 257 per cent, from N170 billion in 2022 to N608 billion in 2023. In addition, the bank’s cost-to-income ratio, which measures the bank’s efficiency, improved significantly from 59.2 percent in 2022 to 37.2 per cent in 2023.
The tier-one bank reported a 61.3 percent increase in loans to customers, from N3.4 trillion in 2022 to N5.5 trillion in 2023, while customer deposits rose 90.31 per cent from N7.8 trillion in 2022 to N14.9 trillion in 2023,reflecting increased customer confidence, enhanced customer experience, successes from the ongoing business transformation programme and the deepening of its retail banking franchise
In line with UBA’s impressive performance across other financial metrics, the group shareholders’ funds increased significantly by 120.2 per cent from N922 billion in December 2022 to N2 trillion by December 2023.
Tony Elumelu, the group chairman, had made a commitment at the previous annual general meeting to pay out a substantial dividend to shareholders. In line with that promise, the bank announced a final dividend of N2.30 per share, subject to shareholder approval at the upcoming AGM.
Oliver Alawuba, the group managing director/CEO, expressed satisfaction with the bank’s outstanding financial performance, which resulted in record profits and balance sheet growth.
Alawuba dwelled on the group’s shareholder’s funds which crossed N2 trillion from N922 billion in 2022, and total assets which crossed the N20 trillion mark, with a 90.2 per cent Year-on-Year growth. He noted that the group is well positioned for further business expansion in FY2024 having closed FY2023 with Capital Adequacy Ratio of 32.6 per cent.
The GMD added that the bank’s diversified business model (Pan-African and International strategy) is justified by the contribution of its ex-Nigeria business to the group’s results and reinforces its resolve to expand the market share of customers, funding, digital and transaction banking businesses across Africa.
“Driven by our customer service and execution-led delivery model, we will continue to expand our market share and create value for our shareholders and meet the expectations of our various stakeholders,” he stated.
Ugo Nwaghodoh, UBA’s executive director for finance and risk management, described the 2023 fiscal year as a very challenging one, with high inflation and currency depreciation in many of the markets in which the bank operates. He noted that the economic situation in many countries was exacerbated by regional conflicts and security challenges.
“I am delighted however at the strong growth in earnings and profitability recorded in the year. The Group conservatively set up significant impairment reserves against its overall risk assets portfolio considering the latent impact of the macroeconomic headwinds on our credit portfolio. Consequently, Cost of Risk grew to 3.09% from 0.63% in the prior year,” he noted.
On the outlook for the 2024 financial year, Nwaghodoh stated that the bank remains committed to sustainable growth and maintaining its strong culture of compliance and risk management. He also highlighted the bank’s commitment to continuing to drive its business forward and achieve its growth targets.
