UBA’s Elumelu asks shareholders to reinvest from N95.8bn bumper dividend

• To own shares across multiple countries

• Elumule, board members to reinvest 100%

• Commend 2023 performance, dividend payout

• Approve regulator ordered recapitalisation

BUSINESS A.M. REPORTER  

In a bumper dividend year for shareholders of United Bank for Africa (UBA) Plc, Tony Elumelu, the group chairman of the multi jurisdiction financial institution, on Friday asked the shareholders to save a good chunk of their bumper 2023 dividends payout which hit their individual accounts last week for reinvestment in the organisation as it prepares to head to the market for a rights issue.

Elumelu spoke to a packed gathering of the company’s shareholders at its 62nd annual general meeting inside the Congress Hall of the prestigious Transcorp Hotel in Abuja. 

Elumelu’s advice to the shareholders comes on the back of plans for a rights issue to existing shareholders in the company’s quest to meet new regulatory requirements for holders of an international banking licence, like UBA, to have a minimum capital of N500 billion.

In a strong appeal to the shareholders, Elumelu appealed to them to participate fully and reinvest their dividends in the bank’s recapitalisation drive as this will ensure that they continue to enjoy even higher returns from their investments.

“I call on you shareholders to re-invest a substantial part of your dividends in our rights issues which will be announced soon, as we will be giving you the first opportunity to own a share in all the countries where we operate; I am advising shareholders, as you get your dividends, reinvest a significant part of it. As for my board members and I, we would be investing 100 percent of the dividends we get, because if we don’t do so, it means we would be leaving food on the table for others who did not labour for it,” Elumelu stated.

The shareholders have seen their dividends bump up from the very positive performance of the institution in the 2023 financial year. It had initially paid out an interim dividend of N17.1 billion, representing a pay-out of 50 kobo per share for the first half of 2023. 

With a further payment of N78.7 billion as final dividend, it brought the total dividend for the 2023 financial year to N95.8 billion, representing N2.80 per share.

Elumelu’s call for the shareholders to reserve a great percentage of their dividend for the company’s planned rights issues appears to have followed for the knowledge that in a surprising move, representing another first, dividend payouts were received while the meeting was still on just seconds after the resolution on dividend payments were passed at the meeting by the shareholders, which had resulted in display of open excitement by the shareholders.

The happy shareholders praised the board, management and staff of the bank on the impressive performance recorded over the past years and especially in 2023, which had culminated in the huge dividend payment for the 2023 financial year.

The board had presented a number of resolutions for the consideration of shareholders. One of the resolutions which they overwhelmingly approved was the board’s proposal to raise additional capital through the issuance of securities comprising ordinary shares, preference shares, convertible and/or non-convertible notes, bonds or any other instruments in the Nigerian and/or international capital market.

Shareholders attending the meeting commended the bank’s management over the impressive performance for the 2023 financial year, which resulted in the large payout of dividend to its investors, and highlighted its thriving business in its African subsidiaries, which continues to contribute significantly to the group’s total income.

Mukhtar Mukhtar, one of the shareholders who spoke at the meeting, commended group chairman, Tony Elumelu, and group managing director, Oliver Alawuba, for their concerted effort towards ensuring that the performance of the bank reached unprecedented heights in the year under consideration.

“I want to specially commend the management and board of UBA, especially the chairman, Tony Elumelu and the group managing director and chief executive officer, Oliver Alawuba, who have been managing activities of this great institution over the past few years.

“We are impressed at the results that you have recorded so far, how you have managed to maintain a well-structured balance-sheet and diversified balance sheet with total assets growing to over N20 trillion. The achievement that the bank has recorded under your leadership, especially the sterling contributions of our subsidiaries in Africa, deserves accolades,” Muktar stated.

Patrick Ajudo, another shareholder at the meeting,  also commended Elumelu for keeping the promise made to shareholders a few years ago to begin to pay an increased dividend.

“Our chairman, Tony Elumelu, promised shareholders a few years ago in this same hall, that he will move from ‘kobo-kobo’ dividends to naira dividends, and he has kept that promise. We are very excited, because, not only have you kept that promise, but you have backed it up by even matching the industry standards. Indeed, we are proud to be associated with such a brand that has integrity, and we highly commend you for this,” he stated.

Adetutu Siyanbola, a legal practitioner and shareholder of UBA, took time to commend the bank’s management for its operations over the decades, especially as it celebrates its landmark 75th year anniversary, praising the gender balance and high female representation on the bank’s board, which according to her, is a feat worth emulating by other financial institutions in Africa.

While commending the group managing director for winning several awards in the 2023 financial year, she expressed satisfaction that the bank did not incur any penalty in the year under consideration, which meant that UBA had zero infractions and didn’t run afoul of any regulations.

In the 2023 financial year, UBA recorded an impressive leap in gross earnings, as it grew from N853.2 billion recorded at the end of 2022 to close at N2.07 trillion; representing a strong 143 percent growth; total assets also rose remarkably by 90.22 percent, to close at N20.65 trillion up from N10.86 trillion in 2022.

Profit before tax also grew exponentially by 277 percent, to close at N758 billion, up from N200.88 billion recorded in 2022; while profit after tax (PAT) grew by 257 percent from N170.2 billion in 2022, to N607 billion.

Oliver Alawuba, group managing director/CEO,  explained that despite being a year of significant geopolitical and economic challenges, UBA’s strength, the effort and dedication of the team, and its leadership in strategic areas such as innovation and sustainability, helped the bank to grow in a profitable and sustainable manner,

Looking ahead, he said, “The outlook is great because we are diversified. Our African subsidiaries contributed over 55 percent to the bank’s profit this year, and we will do more. Already, the bank entered 2024 from a position of strength, with proven resiliency, a powerful brand and a strong capital position.

“As we begin 2024, “execution” will continue to be on the front burner, with an unrelenting focus on market leadership and excellent customer experience at all touch points,” Alawuba explained.

United Bank for Africa is one of the largest employers in the financial sector on the African continent, with 25,000 employees group wide and serving over 35 million customers globally. Operating in twenty African countries and in the United Kingdom, the United States of America, France and the United Arab Emirates, UBA provides retail, commercial and institutional banking services, leading financial inclusion and implementing cutting edge technology.