This the
bank has said will culminate into an institution with even stronger
indices laced with the capacity to churn out strong double-digit growth
in annuity-based
trade services, enhanced offerings and improved customer service.
Already,
the bank has instituted a number of enhanced risk management and control
framework which have in no small measure contributed to its financial
performances
and overall balance sheet growth over the years.
The Group
Managing Director/Chief Executive Officer, Mr. Kennedy Uzoka, who noted
this in a submission while presenting the bank’s 2018 full year results
during
an international investor/ analysts conference call on Thursday,
explained that UBA’s well diversified asset book supported by stable
funding structure, placed it in a premium position to perform remarkably
despite the falling economic indices in its operating
environment.
He said,
“In spite of slow recovery in economic activities in Nigeria (our single
largest market), the Group’s total assets has grown by 19.7%, driven
largely
by a strong deposit growth of 23%, as the drive for retail deposits
continue to yield desired results. Leveraging on enhanced customer
service, the Group grew retail deposits by 48%, thus strengthening the
funding base and providing the foundation for lower
cost of funds in 2019.
“Notably,
the growth in balance sheet also partly reflects the impact of exchange
rate difference between the reporting dates (2017: N331/USD vs. 2018:
N359/USD),
as 37% of loans and 27% of overall balance sheet is FCY-denominated.
The Group maintained its appetite for a well-diversified balance sheet,
with over 60% in liquid, low risk instruments.”
Uzoka
explained to the investors that the bank recorded impressive growths
achieved across major financial lines, recording a 48 percent
year-on-year growth
in retail deposits and improved CASA ratio to 77 percent.
In its
results for the year end December 2018, UBA gross earnings grew by 7.0
percent to N494.0 billion, compared to N461.6 billion recorded in the
corresponding
period of 2017. The Bank’s total assets also grew significantly by 19.7
percent to an unprecedented N4.9 trillion for the year under review
Throwing
more light on the financials, he stated that gross earnings grew by 7%
year-on-year, despite regulation and market conditions undermined the
non-interest
income line. Interest income, which contributed 73% of gross earnings,
grew by 11%, driven by strong interest income on treasuries, reflecting
the low-risk appetite and treasury-led strategy adopted during the year.
He noted that the lower non-interest income
was occasioned by market condition and regulatory impact on FX trading
income, adding that growing volume on FX trading is compensating for
lower margin on this business, thus reinforcing our positive growth
expectation on this income line in 2019.
While
speaking on the strength of the financial institution in the coming
years, especially on the back of it’s African and non-African
subsidiaries, Uzoka
said the bank’s recent foray into key markets and economies remain a
milestone that will catapult the institution in the coming years.
He said,
“UBA is a unique pan-African franchise with diversified risk and
earnings across fast growing African economies with sound governance,
risk management
and compliance culture which can be seen from our adherence to
international best practice. Our robust digital banking platform through
which we are leveraging technology to serve over 15 million customers
in a cost efficient approach that has helped to deepen
African banking penetration.
“We have
the strong financial capacity backed by high capitalization (BASEL II
capital ratio well above requirement) and strong liquidity, and we have
worked
hard towards connecting Africa and the world through our presence in
key African markets and major global financial centres such as New York,
London and Paris.”
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