- Gross Earnings Crosses the N0.5 trillion mark
- Contributions of Ex-Nigeria operations’ now at 46%
- Proposes Final Dividend of N.80
Pan-African financial institution, United Bank for Africa Plc (UBA) has announced its audited results for the full-year ended December 2019, recording impressive growth across the top and bottom lines.
According to the 2019 financials filed at the Nigerian Stock Exchange (NSE) on Friday, February 28, 2020, Africa’s global bank’s gross earnings grew by 13.3% to N559.8 billion, compared to N494.0 billion recorded in the corresponding period of 2018.
The Bank’s total assets also grew significantly by 15.1% to an unprecedented N5.6 trillion for the year under review. This is the first time the Bank’s gross earnings and assets will respectively cross the N500billion and N5trillion marks.
Notwithstanding the challenging business environment in Nigeria, the Bank’s Profit Before Tax was impressive at N111.3 billion, compared to N106.8 billion at the end of the 2018 financial year. Furthermore, the Profit After Tax rose by 13.3% to N89.1 billion compared to N78.6 billion recorded in 2018. On the cost side, Operating Expenses grew by 10.1 percent to N217.2 billion, as against N197.3 billion in 2018, well below average inflation rate within the period, a reflection of cost efficiency gains.
These results depict the Bank’s deepening of its Pan-African business strategy, given the growth in the contribution of its 19 African subsidiaries to the Group’s net earnings and total assets. Ex-Nigeria Operations’ contributed 46% to the Group’s Profit Before Tax(PBT) in the year under review.
In addition, UBA has been deploying innovative lifestyle products to expand its market share across Sub-Saharan Africa, leveraging its presence in the United Kingdom, United States of America and France, to build a true Africa’s Global Bank, facilitating trade and capital flows between Africa and the rest of the world.
In its tradition of rewarding shareholders, the Bank proposed a final dividend of 80 kobo for every ordinary share of 50 kobo for the financial year ended December 31, 2019. The final dividend which is subject to the affirmation of the shareholders at its Annual General Meeting will bring the total dividend for the year to N1.00, as the Bank had paid an interim dividend of 20 kobo earlier in the year.
UBA recorded a remarkable 20.2% growth (to N2.1 trillion) in loans to customers, whilst customer deposits increased by 14.4% to N3.8 trillion, compared to N3.3 trillion recorded in the corresponding period of 2018. This reflects increased customer confidence, enhanced customer experience, early wins from the ongoing business transformation program and the deepening of its retail banking franchise.
Commenting on the result, the Group Managing Director/CEO, Kennedy Uzoka noted that the year 2019 was important for UBA Group, as it gained further market share in most of its countries of operation.
“The year 2019 was a very remarkable one for UBA given the adverse market developments. Nonetheless, we achieved sizable growth in the balance sheets and earnings, even as we reposition the Bank for the future. Gross earnings crossed the N500 billion threshold to N559billion, whilst total assets also crossed the N5 trillion mark for the first time to N5.6trillion.
“Our strategy remains centered around unparalleled service to our esteemed customers. Accordingly, we are making significant investments in a technology-driven transformation journey. We have recorded early gains as shown in the 39% growth in electronic banking income to N38.8bn in 2019 from N27.9bn in 2018. Our businesses are gaining commendable share in their markets across regions in Africa, as we deepen the scale and scope of our operations.”
Continuing, Uzoka said; “I am indeed excited about the synergy we have built within the UBA Group and the significant progress we have made in our transformation drive. We have positioned the Bank as a truly pan-African banking franchise, leveraging our operations in France, the UK and the USA, to deepen intra-African trade, and facilitate capital flows between Africa and the rest of the world.
“In 2020, we will pursue the aggressive deepening of market share in all our subsidiaries, leveraging technology, rich human resources and our customer-first strategy to win in all the markets we operate, notwithstanding the challenges of our operating environment”.
Also speaking on the performance, the Group CFO, Ugo Nwaghodoh emphasized that the Bank well-positioned to sustain impressive performance across key financial indices, adding that already, some of its previous investment in digital and technological transformation is already paying off significantly.
“We navigated the fragile yield environment in our largest market, to deliver an 8% growth in net interest income to N221.9billion. This was bolstered by a 7.8% and 13.9% growth in interest income from corporate loans and investment securities respectively, as well as a 4.0% cost of funds driven by our stable retail deposits. Resulting from cost-efficiency gains within the year, the cost-to-income ratio moderated to 62.7% (64% in 2018), whilst profit for the year grew 13.3%, to N89.1billion, translating to 16.2% return on average equity (RoAE),” Nwaghodoh said.
United Bank for Africa Plc is a leading Pan-African financial institution, offering diverse banking and payments services to more than eighteen (18) million customers, across 1,000 business offices and customer touchpoints in 20 African countries. With a presence in New York, London and Paris, UBA are connecting people and businesses across Africa through retail, commercial and corporate banking, innovative cross-border payments and remittances, trade finance and ancillary banking services.
Five oil majors reduce value of their assets by $50 billion in Q2
Energy demand at one point was down by more than 30% globally.
Five oil majors (including Exxon Mobil and British Petroleum) reduced the value of their assets by $50 billion in Q2, 2020. They also reduced their production rates as the COVID-19 pandemic caused a downward trend in energy demand.
What this means: The cut in asset valuations and reduction in crude oil production by these oil majors showed the depth of damage the COVID-19 pandemic caused on the global energy sector in Q2, 2020.
Energy demand at one point was down by more than 30% globally and still remains below pre-pandemic levels.
Some of these conpanies’ executives said they took these austerity measures because they expect demand to continue to be on the downward trend in the meantime. This is in view of the fact that people around the world are traveling less, even as many global industries are not in full capacity. The pandemic has already killed more than 700,000 people.
Of those five oil majors, only Exxon Mobil (XOM.N) did not book sizeable impairments, Reuters reported. However, an ongoing re-evaluation of Exxon Mobil plans could lead to a reasonable amount of its assets being impaired, and signal the removal of 20% or 4.4 billion barrels of its oil and gas reserves.
Oil major BP (BP.L) took a $17 billion hot. It said its plans in the coming years would be a focus on renewables and fewer fossils.
About two weeks ago, Nairametrics reported how Exxon Mobil and Chevron posted their worst losses in modern history, as the COVID-19 pandemic and a glut in crude oil reduced the demand for energy products in the second quarter of 2020.
US gives reasons it warned citizens against travelling to Nigeria, lists 12 high risk states
The US government has issued a level 3 Travel Health Notice for Nigeria due to COVID-19.
The United State Government has advised its citizens against travelling to Nigeria due to the Coronavirus pandemic, terrorism, civil unrest, kidnapping, widespread inter-communal violence, and others.
This warning is contained in a travel advisory statement that was obtained from the United State Department of State website.
The statement also disclosed that the Centre for Disease Control and Prevention (CDC) had issued a level 3 Travel Health Notice for Nigeria due to the Coronavirus pandemic. Also, some parts of the country have increased risk.
“Reconsider travel to Nigeria due to Covid-19. Reconsider travel to Nigeria due to crime, terrorism, civil unrest, kidnapping and maritime crime. Some areas have increased risk.’
‘’Do not travel to; Borno and Yobe States and Northern Adamawa State due to terrorism; Adamawa, Bauchi, Borno, Gombe, Kaduna, Kano and Yobe States due to kidnapping; Coastal areas of Akwa Ibom, Bayelsa, Cross Rivers, Delta and Rivers States (with the exception of Port Harcourt) due to crime, civil unrest, kidnapping and maritime crime,’’ the statement said.
It stated that violent crimes such as armed robbery, assault, carjacking, kidnapping, and rape, have become common throughout the country. As such, US citizens were advised to exercise extreme caution throughout the country due to the threat of indiscriminate violence.
“Terrorists continue plotting and carrying out attacks in Nigeria, especially in the Northeast. Terrorists may attack with little or no warning, targeting shopping centres, malls, markets, hotels, places of worship, restaurants, bars, schools, government installations, transportation hubs, and other places where crowds gather.
“Sporadic violence occurs between communities of farmers and herders in rural areas.’’
The US government acknowledged the fact that it has limited ability to provide emergency services to US citizens in many parts of Nigeria due to the security conditions.
Going further it stated, “Do not travel to Borno and Yobe States and Nothern Adamawa. Terrorist groups based in the Northeast target churches, schools, mosques, government installations, educational institutions and entertainment venues. Approximately two million Nigerians have been displaced as a result of the violence in Northeast Nigeria.
“Do not travel to Adamawa, Bauchi, Borno, Gombe, Kaduna, Kano and Yobe States. The security situation in Northwest and Northeast Nigeria is fluid and unpredictable, particularly in the states listed above due to widespread inter-communal violence and kidnapping.
“Do not travel to the coastal areas of Akwa Ibom, Bayelsa, Cross Rivers, Delta and Rivers States (with the exception of Port Harcourt). Crime is rampant throughout Southern Nigeria, and there is a heightened risk of kidnapping and maritime crime, along with violent civil unrest and attacks against expatriate oil workers and facilities.’’
World’s largest oil company to pay $75 billion annual dividend, despite plunge in profits
Saudi Aramco is the national energy company of Saudi Arabia.
The world’s largest oil company, Saudi Aramco reported a 73% drop in profit Q2,2020 profit and still kept its plans to pay $75 billion in annual dividends in a report credited to Bloomberg News
Saudi Aramco reported a plunge in profits for Q2,2020 of 24.6 billion riyals compared to 92.6 billion riyals recorded in the same corresponding year.
Aramco will pay a Q2,2020 dividend of $18.75 billion, most of it to the government of Saudi Arabia, the company’s major shareholder.
The plunge in profit was due mainly to “the impact of lower crude oil prices and declining refining and chemical margins,” Aramco said in the statement to the Saudi stock exchange.
“Strong headwinds from reduced demand and lower oil prices are reflected in our second-quarter results,” said Chief Executive Officer Amin Nasser.
“We are seeing a partial recovery in the energy market as countries around the world take steps to ease restrictions and reboot their economies.”
Quick fact; Saudi Aramco is the national energy company of Saudi Arabia. It produces five grades of crude oil and natural gas liquids.
It also produces refined energy products that include liquefied petroleum gas, ethanol, naphtha, and other products.
It exports about 75% of its crude oil to foreign markets, most often with its oil tankers. Saudi Aramco has access to crude oil reserves of about 260 billion barrels, the largest in the world.
OPEC’s largest oil exporter, Saudi Arabia has been hit hard by global economic restrictions aimed at curbing the spread of COVID-19.
The Saudis make most of its revenue from crude oil, which has dropped 33% in value this year.