UBA Outlines Growth Strategies, Considers Rights Issue for Regulatory Compliance

The strategies of the United Bank for Africa (UBA) Plc for navigating the dynamic banking landscape and consolidating growth prospects in the 2024 financial year have been outlined. The bank aims to focus on regulatory compliance and sustainable value creation to sustain its current growth momentum and enhance shareholder confidence. These strategies were disclosed by UBA’s Group Managing Director/Chief Executive Officer, Oliver Alawuba, during the 2023 Full Year Investors’ Conference Call following the release of the bank’s financial results for the year ended December 31, 2023.

At the close of the 2023 financial year, UBA reported impressive growth in gross earnings, with a substantial increase from N853.2 billion in 2022 to N2.08 trillion, representing a robust 143 percent growth. Additionally, total assets rose remarkably by 90.22 percent to N20.7 trillion, up from N10.9 trillion in 2022. Profit Before Tax (PBT) soared by 277 percent to N757.7 billion, while Profit After Tax (PAT) increased by 257 percent to N607.7 billion.

Alawuba highlighted UBA’s strong diversity across Africa and beyond, underscoring its competitive advantage in serving a diverse customer base. Regarding the recent Central Bank of Nigeria (CBN) circular on minimum capital for banks, Alawuba assured that UBA remains among the top capitalized banks and is actively exploring strategies to boost its capital base in compliance with regulatory requirements, potentially through options such as rights issue or private placement. He reiterated UBA’s confidence in meeting the CBN’s capital adequacy requirements, emphasizing its well-capitalized position with shareholders’ funds exceeding N2 trillion.

Alawuba also addressed UBA’s approach to managing the risk of Non-Performing Loans (NPLs), outlining plans for proactive credit monitoring, restructuring strategies for at-risk loans, and increased provisioning coverage. The aim is to maintain NPLs at 4.5 percent for the 2024 full year, thereby strengthening the bank’s ability to support customers, protect shareholders’ value, and contribute to overall economic activity, even in a dynamic economic environment. UBA’s Executive Director, Finance & Risk Management, Ugo Nwaghodoh, expressed confidence in the bank’s performance for the 2024 financial year, attributing it to growing investments in technology and IT security, ensuring sustainable growth, and maintaining strong compliance and risk management practices.