United Bank for Africa Plc, UBA, has announced its audited results for the full-year ended December 31, 2020 recording an impressive growth across top and bottom lines.
According to an audited 2020 full financial year press release statement from UBA, the bank’s gross earnings grew by 10.8% to N620.4 billion, compared to N559.8 billion recorded in 2019 financial year.
UBA total assets also grew significantly by 37.0% to an unprecedented N7.7 trillion compared to N5.6 trillion, as at 2019 for the year. This is the second time the Bank’s gross earnings and assets will respectively cross the N500billion and N5trillion marks.
Notwithstanding the Covid-19 pandemic and lockdown in the country which stopped business operations in Nigeria, the bank’s profit before tax impressively increased by 18.5% to N131.9 billion, compared to N111.3 billion in 2019. While, the profit after tax increased by 27.7% to N113.8 billion, compared to N89.1 billion in 2019.
UBA Operating expenses grew by 15.0% to N249.8 billion, compared to N217.2 billion in 2019 financial year.
Other Key Highlights
- Operating Income: N407.6billion, a 17.7% YoY increase compared to N346.3 billion in 2019FY.
- Cost-to-Income Ratio: 61.3%; compared to 62.7% in 2019FY.
- Return on Average Equity (RoAE): 17.2%; compared to 16.6%; in 2019FY.
- Net Loans: N2.6 trillion; reflecting an impressive 24.0% YoY growth in the loan book.
- Customer Deposits: N5.7 trillion, compared to N3.8 trillion as at 2019FY; representing 48.1% YoY growth.
- Shareholders’ Funds: N 724.1 billion, up 21.1% YoY compared to 2019FY.
Commenting on the result, Kennedy Uzoka, the GMD/CEO, said; “We ended a very challenging year on a reassuring note. The Bank recorded double-digit growth in both our
top and bottom lines, as gross earnings and after-tax profit grew 10.8% and 27.7% to N620.4billion and N113.8 billon respectively. Return on equity was 17.2%, even as our cost-to-income ratio moderated to 61.3%. Our earnings per share of N3.20 is a 26.8% growth from the preceding year, as we continue to ensure maximum
value creation for our highly esteemed shareholders.”
Despite the tumultuous impact of Covid-19 pandemic globally and across our 23 countries of operation, we created N519.0 billion additional loans as we continued to support our customers and their businesses. Customer deposits grew 48.1% to N5.7 trillion, driven primarily by additional N1.8 trillion in low-cost deposits.
As a global bank, we remain well capitalized and determined to successfully drive financial inclusion on the continent through our innovative products and vast network. Our capital adequacy and liquidity ratios came in at 22.4% and 44.3%, well above the respective regulatory minimum of 15.0% and 30.0%. Our primary strategy will continue to focus on providing excellent services from our customers’ standpoint, putting the customer first (C1st Philosophy).
Looking ahead, I am inspired by the achievements we have made since the launch of our transformation programme. We have expanded market share considerably across the geographies where we operate and are consolidating our digital banking leadership in Africa. We will continue to leverage our diversified business model and dedicated workforce to further strengthen our position as ‘Africa’s Global Bank’.
Also speaking on the performance, the Group CFO, Ugo Nwaghodoh said; The persistent low interest rate environment in 2020 exerted significant downward pressure on margins. Notwithstanding, our interest income for the year grew by 5.7% (to N427.9 billion), driven by 8.2% and 7.5% yearon-year growth on interest income on loans and investment securities respectively. Our interest expense declined by 8.0% (to N168.4billion) driven largely by a 51.9% decline in interest expense on customer deposits in our Nigerian operations, bringing down the Group’s cost of funds to 2.9%, 113 basis points below 2019 position.
We have prudently stepped-up our reserves for loan impairments, hence the 37.4% YoY growth to N22.4billion, yielding a 0.9% cost of risk. These reserves provide adequate cover for impairments, and should help minimize the need for further reserves in the current year, in view of the improving global operating environment. Our NPL ratio has declined to 4.7% (from 5.3% in 2019), driven largely by growth in loan book, robust credit risk
monitoring architecture, and payment of Past Due Obligations (PDOs).
As we continue to see signs of recovery from the Covid-19 pandemic, led by resumption of economic activities across the globe, increase in consumer spending and continued progress on vaccine deployment, we have positioned our businesses for greater synergy across the Group. We remain committed to our prudent risk management practices, and optimistic of best value for our stakeholders in the days ahead.
United Bank for Africa Plc is a leading Pan-African financial institution, offering banking services to more than twenty-one (21) million customers, across 1,000 business offices and customer touch points in 20 African countries. With presence in New York, London and Paris, UBA is connecting people and businesses across Africa through retail, commercial and corporate banking, innovative cross-border payments and remittances, trade finance and ancillary banking services.