Key Highlights
- The Group recorded 28.1% growth in deposits to N9 trillion from N7.02 billion during the comparable period of 2021
- The elevated interest rate regime positively impacted NIM which improved by 0.70% on account of asset repricing.
- The Banking industry in Sub-Saharan African (SSA) countries in 2022 was defined by a rapidly evolving regulatory landscape.
The Pan African Bank, UBA Plc has said that the 28.1% growth in deposits achieved by the Group in the 2022 financial year was a testament to quality service and customers ‘confidence in the bank.
Mr. Ugo Nwaghodoh, the Group’s Executive Director, Risk Management & Finance stated this while making presentations when the Bank held its Audited 2022 Results Conference Call on Wednesday.
The Group recorded a 28.1% growth in deposits to N9 trillion from N7.02 billion during the comparable period of 2021.
Double-digit growth
Nwaghodoh noted that the Group’s 31% growth in PBT was buoyed by strong double-digit growth in operating income. He noted that the elevated interest rate regime positively impacted NIM which improved by 0.70% on account of asset repricing.
According to him, slight moderation in the cost of funds despite an uptick in the rate environment was further supported by growth in retail deposits while Return on Average Equity (ROAE) improved to 19.7% on the back of the significant increase in profit.
He added that the group maintains a well-diversified balance sheet, with over 50% of the assets in liquid and low-moderate risk instruments.
- “Customer deposits continue to dominate the Bank’s funding mix (83%) with a 22.9% YoY deposit growth. This demonstrates combined efforts toward deepening the wallet share of corporate, commercial, and retail customers.
- The remarkable deposit growth (mostly low cost) enabled the funding of investment securities and other earning assets,” he said.
Additional operations
The Group Managing Director/CEO, Mr. Oliver Alawuba speaking at the Conference Call said that the Bank opened additional operations in UAE (Dubai), increasing its presence to 24 countries, across 4 continents – Africa, America, Europe, and Asia
- “We are positioned to take Africa to the world and bring the world to Africa through capital and investment funds flows. We also remain focused on simplifying trade and cross-border payment across the continent with UBA as one of the leading Banks championing the Pan-African Payment and Settlement System (PAPSS), an AfCFTA agenda and brainchild of Afreximbank which is currently operating in six pilot countries in West Africa – Nigeria, Ghana, Sierra Leone, Guinea, Liberia, and Gambia.
- Collectively, we are committed to providing quality leadership, a conducive work environment for our workforce and excellent customer experience that will continually translate to improving the bottom line and our shareholders’ value in the short, medium, and long term,” he said.
Regulatory landscape
Alawuba said the Banking industry in Sub-Saharan African (SSA) countries in 2022 was defined by a rapidly evolving regulatory landscape.
- “Mirroring the hawkish monetary policy stance in developed markets, interest rates were raised in 2022 in the countries where we operate.
- Among others, the Central Bank of Nigeria (CBN) has steadily raised its Monetary Policy Rate (MPR) to bring the benchmark rate to 18% in March 2023.
- Furthermore, the CBN increased the Cash Reserve Ratio (CRR) from 27.5% to 32.5% but opted to retain the asymmetric corridor at +100bp and – 700bp around the MPR and kept the liquidity ratio at 30%,” he said.
Scorecards
He explained that despite volatile market conditions and many operational challenges, the Bank continued to deliver on key strengths built in the past years.
- “For the year ended 31 December 2022, UBA delivered gross earnings of N853 billion, up 29.2% on the prior year. As a result, we recorded an operating income of N591 billion, representing an increase of 33.6% from N443 billion in 2021.
- Profit Before Tax (PBT) increased by 31.2% to N201 billion from N153 billion recorded in 2021 while Profit After Tax (PAT) rose by 43.5% to close the year at N170 billion from N119 billion in 2021.
- In line with the overall objective of stimulating growth in the real sector, we grew our loan portfolio by N605 billion, or 21.4%, from the prior year.
- We continue to maintain a close focus on cost efficiency and strictly control operating expenses across the Group, including our new strategic investments. Consequently, our reported cost-to-income ratio stood at 59.1%.
- In terms of capital adequacy, UBA boasts an excellent capital position with a Capital Adequacy Ratio (CAR) of 28.3% – well above the regulatory requirement of 15%. We are committed to delivering improved performances in the years ahead,” Alawuba said.
