Uba Reduces Loan, Operational Risk Losses
By Jerome Ushakang
The improved risk assets management process adopted by United Bank for Africa Plc (UBA) has led to reduction in loans and operational risk losses by N2.5 billion or 78.125 per cent.
This year the bank's loans and operational risk losses stood at N700 million compared to N3.2 billion recorded in 2003.
The significant reduction in loans and operational risk losses has been attributed to the bank's adherence to a stringent code of professional conduct and ethics in line with international standards.
The innovations and techniques introduced by UBA have impacted positively on its operations and service delivery as it has now been rated first class in risk management processes in line with the new capital accord (Basle II).
Financial Performance
Total assets at the end of March 31, 2004 were N212billion in contrast to N204 billion recorded in the previous year, thus indicating a rise of four percent.
Gross revenue stood at N24.5 billion as against N24.2 billion in year 2003; profit before tax increased to N6 billion from N5.1 billion in the comparative period of last year, showing 17 percent growth.
N4.5 billion was recorded as profit after tax in 2004 compared to N3.2 billion for 2003, indicating 28.88 percent increase.
Loans and operational risks losses fell sharply to N700 million from N3.2 billion last year, increasing by 78.125 percent.
Available records from the financial performance of the bank also showed that total deposit base rose to N151.9 billion as against N142.4 last year, an increase of 6.25 percent.
Risk assets climbed up to N50 billion from N46 billion in the previous year, recording a rise of 22 percent. Earnings per share grew by 38 per cent from N1.29 billion to N1.77 billion.
Dividend per share went up by 33 percent, specifically from 45 kobo to 60 kobo within the period under review.
Operating cost/income ratio for 2004 was 76 percent compared to 79 percent of March 31, 2003. The bank contributed 98 per cent to earnings in the financial year ended march 31, 2004 and 93 percent to profit before tax in contrast to 94 percent last year. A total of 98.5 percent was contributed to assets.
Group Structure
The major business of the UBA group is commercial banking and financial services. The group comprises UBA PLC, (the bank) and UBA Capital and Trust Limited, a subsidiary that targets asset management, trusteeship and private equity.
It also has a fully owned subsidiary known as UBA securities Limited. This subsidiary is fully engaged in security registration, custodial services, issuing house and underwriting business.
Products and Services
The products and services of UBA are basically categorised into three. these are retail, wholesale and investment/specialised products services.
As a retail bank, UBA is positioned to serve the needs of medium and small business growth through its branch network in the major commercial centres of Nigeria and New York to meet the financial need of wholesale customers.
The investment/specialised unit handles asset management, custodial services, share registration, private equity and trust services, foreign currency loans and payment and receipt for all business on an international scale can be offered through UBA New York in the United States of America.
Other sundry products and services provided by UBA are UBA MoneyGram in which the beneficiary is paid in cash, (dollars) TCS, Dom account, naira without charges, UBA no Wahala loan, UBA Executive Loan, Direct credit among others.
Information Technology Driven
As a modern bank geared towards maximum precision and efficiency, the services of the bank are redesigned on automation and centralised with 176 branches currently online, with 97 on line real time.
Focus
The bank intends to concentrate on retail banking where it strength lies, with 250 branches spread across the length and breath of Nigeria.
Aggressive pursuit of other high dividend yielding ventures will be given attention especially oil and gas.
More will also be done to further improve the quality of risk assets in order to reduce operational risk issues.
Head Office
Meanwhile, the Head Office is responsible for strategy and policy formulation, risk management and controls, legal and regulatory compliance as well as financial control and performance management.
Legacy
UBA is one of the oldest and leading financial services groups in Nigeria and sub-Saharan Africa.
It was the first bank to be quoted on the Nigerian Stock Exchange (NSE), first to open a branch in the USA, the first and only Nigerian bank to issue Global Depository Receipt, which makes the shares easily accessible to institutional investors internationally. It also pioneered the establishment of a university campus branch and currently maintains outlets in, New York and Cayman Island.
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