Recapitalisation: UBA Unveils Proactive Strategies To Navigate Regulatory Changes

Africa’s Global Bank, United Bank for Africa (UBA) Plc, has outlined its strategies aimed at navigating the dynamic and ever-evolving banking landscape while also consolidating growth prospects for the 2024 financial year.

To this end, the bank aims to focus on regulatory compliance and sustainable value creation as it aims to sustain its current growth momentum and enhance shareholder confidence.

UBA’s group managing director/chief executive officer, Oliver Alawuba, disclosed this to the banks’ local and international investors during its 2023 Full Year Investors’ Conference Call on Friday, following the release of the bank’s financial result for the year ended December 31st, 2023.

At the end of the 2023 financial year, UBA recorded an impressive leap in gross earnings, as it grew from N853.2 billion recorded at the end of 2022 to close at N2.08tn; representing a strong 143 percent growth; total assets also rose remarkably by 90.22 percent, to close at N20.7 trillion up from N10.9 trillion in 2022. Profit before tax grew exponentially by 277 percent, to close at N757.7billion, up from N200.9 billion recorded in 2022; while profit after tax (PAT) increased by 257 percent from N170.2 billion in 2022, to N607.7 billion.

The GMD expressed confidence that based on the bank’s strategic business investments in the last year, UBA remains on the trajectory of achieving and even surpassing its targets for the current financial year, adding that the bank’s strong diversity across Africa and beyond, gives it the needed edge to serve its teeming customers.

On the recently released Central Bank of Nigeria (CBN) circular on minimum capital for banks, the GMD said that as it stands, UBA remains among the top capitalised banks, as he added that the bank is actively exploring a well-defined strategy to boost its capital base and ensure compliance within the regulatory time frame.

He said, “This strategy may include a combination of options such as Rights Issue or Private Placement. The fact remains that we are confident in our ability to meet the CBN’s capital adequacy requirements and will keep investors informed as we progress’’.

Continuing, Alawuba said, “I want to reiterate that, UBA is very well capitalised with shareholders’ fund in excess of N2 trillion. We will in due course, raise the required component of capital in line with the CBN directive.”

Shedding more light on how the Bank intends to manage the risk of Non-Performing Loans (NPLs), especially in the face of the harsh business operating climate in Africa, Alawuba, indicated plans to employ proactive credit monitoring, restructuring strategies for at-risk loans, and increased provisioning coverage.

“We expect to keep NPLs at 4.5% for the 2024 full year. This commitment to credit quality is to further strengthen our ability to support our customers, protect shareholders’ value while contributing to overall economic activity, even in a dynamic economic environment,” he explained.

UBA’s Executive Director, Finance & Risk Management, Ugo Nwaghodoh, who was confident of an even better performance in the 2024 financial year, pointed out that its growing investments, both in technology and IT Security, the bank is well on its way to ensure growth in its business.

“The Group remains fervently committed to sustainable growth and maintaining its strong compliance and risk management practices culture even as we drive our business through the next phase of growth,” Nwaghodoh stated.

United Bank for Africa Plc is a leading Pan-African financial institution, offering banking services to more than thirty-five (35) million customers, across 1,000 business offices and customer touch points in 20 African countries. With presence in New York, London, Paris and Dubai, UBA is connecting people and businesses across Africa through retail, commercial and corporate banking, innovative cross-border payments and remittances, trade finance and ancillary services.