UBA Forging Ahead | Independent Newspapers Limited
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UBA Forging Ahead

Posted: Sep 10, 2015 at 12:00 am   /   by   /   comments (0)

By Andy Nssien,


Pan African Bank, UBA Plc  exuded a measure of confidence as it exhibited an audited half year results for the period ended June 30, 2015.  The results which were achieved in the teeth of economic headwinds that prevailed during the period, indicated improvements in virtually all the departments of  the bank’s  operation.


Gross Earnings rose by 21 per cent to  N166.9 billion year-on year (yoy)  from N138.2 billion in 2014 half year.

Net Operating Income grew to N108.7 billion, yoy, compared to N90.0 billion in 2014.

Operating Expenses  stood at N69.6 billion, yoy,  a rise of 14 per cent from N61.1 billion in 2014.

Profit Before Tax increased by 35 per cent to N39.0 billion, yoy, from N28.9 billion recorded in 2014.

Profit After Tax  grew by 40 per cent to  N32.0 billion, yoy,  from N22.9 billion recorded in 2014 .

Cost-to-Income Ratio  reduced to 64.0 per cent,  yoy, from 67.9 per cent in 2014.

Return on Average Equity rose  to 22.3 per cent, yoy, from  19.0 per cent in 2014

Total Assets up by 6 per cent to N2.93 trillion, year to date (ytd) from  N2.76 trillion at 2014 full year.

Loans and Advances stood at N1.16 trillion, ytd, up from  N1.07 trillion at 2014 full year.

Customers deposit rose by 3 per cent to N2.23 trillion, from N2.17 trillion, while shareholders’ funds grew  by 16 per cent to  N307.6 billion, ytd, from N265.4 billion.

However, analyses of the above statistics indicate that the margins are dwindling, on account of high operating expenses.  Fees and Commission shot up by 50 per cent  to N4.2 billion from N2.8 billion, just as Other Operating expenses rose  by 22 per cent to N36.0 billion  from N29.7 billion recorded in the corresponding period in 2014. Consequently, the Net Interest Margin was flat, at 2.50 per cent as against 2.54  per cent of the previous period. Pretax Profit Margin slipped  to  2.47 per cent from 4.78 per cent in the similar period last year, while Net Profit Margin dropped from 6.06 per cent to 5.20 per cent during the same period.

Even so, the half year performance of the bank was a function of the seed sowed by the lender  through its  activities and programmes during the full year ended 2014.

Full Year 2014 Performance

For the year ended December 2014, UBA posted a 9.57 percent increase in Gross Earnings to N290.01 billion from N264.68 billion entered the same period of 2013.

Interest Income jumped by 5.91 per cent to N196.68 billion in  2014 compared with N185.70 billion as at December 2013. The growth in Interest Income was driven by strong growth in loans and advances in the period under review.

However, Interest Expense  rose by 9.78 per cent to N90.54 billion from N82.47 billion, while Net Interest Income rose by 2.89 per cent to N106.13 billion  from N103.23 billion  recorded in the previous  year.

Non-Interest Income was up 18.2 per cent to N93.3 billion from N78.9 billion.  Operating Income rose 3.6 per cent to N192.4 billion from N185.7 billion, while Profit Before Tax inched up 0.3 per cent to N56.2 from N56.0 billion in 2013.

Operating Expenses

Apart from Fees and Commission which rose by  34 per cent to N7.0 billion, the Group’s bottom line was depressed by Other Operating expenses which further shot up by about the same rate to N68.5 billion from N51.0 billion of the previous year. Mostly affected were such items as; Fuel, Repairs and Maintenance which leaped by about 138 per cent to N5.0 billion from N2.1 billion; Other Administrative expenses, rose from N1.2 billion to N4.6 billion; Advertisement, from N2.6 billion to N3.7 billion; Business Travel jumped from N1.9 billion to N3.2 billion. One worrying expenditure item in the category was Computer Consumables which at Group level, was jacked up 162 per cent to N1.2 billion from N457 million, while at the bank’s level, it was spiked at about the same rate to N1.1 billion from N420 million expended in the previous year.


Although, conscious efforts were made to reduce the Group’s impairment losses on loans and advances to customers which improved from N13 billion to N6.5 billion,  more initiatives are required  at the company’s level  which impairment further deepened from N181 million to N3.0 billion as at the end of last year. Of the impairment losses suffered last year at Group operations, Nigeria accounted for N3.0 billion; the Rest of Africa, N3.5 billion; while the Rest of the World segment recorded N2 million.

Operational Segments

Management needs to keep an eye on operational segments as total revenue from of the segments, Corporate,  dipped from N109.5 billion recorded in 2013 to N96.2 billion.    Also, Treasury and Financial Markets  segment reported total revenue of N26.8 billion in 2014, down from N28.3 billion which affected  its profit before tax  which dropped to N11.3 billion from N31.6 billion registered in the previous year.

Subordinated Liabilities

Subordinated liabilities represent medium-term bonds issued by the Bank. In 2010, the bank offered for subscription N20 billion fixed rate subordinated unsecured notes, maturing in 2017 with a coupon of 13 per cent. In 2011, the bank also offered N35 billion fixed rate subordinated unsecured notes, maturing in 2018 with a coupon of 14 per cent. In December 2014, the lender also offered N30.5 billion fixed rate unsecured notes, maturing in 2021. Coupon on the notes are payable semi-annually while principal is payable on maturity.

Last year, the interest accrued for the Group stood at N7.7 billion, up from N7.6 billion, while repayments stood at N7.5 billion each in 2014 and 2013.


The origin of UBA dates back to 1949 when it was first referred to as the British and French Bank Limited (BFB). It took over the assets and liabilities of BFB and was incorporated as a limited liability company on 23rd February, 1961 under the Companies Ordinance (Cap 37) 1922. UBA was the first Nigerian bank to make an Initial Public Offering (IPO), following its listing on The Nigerian Stock Exchange in1970. It was also the first Nigerian bank to issue Global Depository Receipts (GDRs).

In 2005, it completed one of the biggest mergers in the history of Nigeria’s capital markets, following the business combination with Standard Trust Bank (STB) Plc. From then, it commenced its pan-African expansion, which has led to its presence in Ghana, Benin Republic, Cote d’Ivoire, Burkina Faso, Guinea, Chad, Cameroon, Kenya, Gabon, Tanzania, Zambia, Uganda, Liberia, Sierra- Leone, Mozambique, Senegal, Congo DR and Congo Brazzaville. It also established presence in France and the UK to complement its already existing USA office.