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UBA’s profit dips by 43%

Category: Capital Market


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UBA’s profit dips by 43%

May 11, 2010 By Emma Ujah & Oscarline Onwuemenyi


All may not be rosy for shareholders of the United Bank for Africa, UBA, this year, as the bank recorded a dip in its profits during the business year.



Announcing the fall in profit during its Annual General Meeting in Abuja on Monday, the Chairman of UBA Plc, Chief Ferdinand Alabraba, noted that, “2009 has been an unusual year with varying degrees of unusual demands on many of our people and resources. The banking industry came under regulatory and public scrutiny this year, and our bank weathered the storm.”He added that the year under review was “an exceptionally difficult year for the Nigerian banking system with significant reforms and shake-ups in the second-half of the year.”



According to him, the bank’s gross earnings grew by 46 per cent to N247 billion against N169.6 billion from 2008, which was buoyed by improved contributions from operations outside Nigeria.“However, profit before tax and exceptional items dipped from N56.8 billion in 2008 to N13.7 billion due to provisioning, pre-operational charges by our new African subsidiaries and exceptional write-offs during the year, reflecting the challenging environment in which we operated in 2009.”The Chairman noted that in spite of all these, the bank has continued to show its leadership pedrigree.



“Despite these challenges, the bank continued to show strong risk ratios that exceeded regulatory-required minimum. Our liquidity ratio was 47 per cent as against 42 per cent in 2008, and capital adequacy ration was 16 per cent as against 22 per cent in the previous year,” he stated.At the AGM, the out-going Chief Executive Officer of UBA, Mr. Tony Elumelu, noted that in line with the bank’s tradition of distributing returns to its shareholders, the Board of Directors is proposing a dividend of 10 kobo per share and a bonus share issue of one new share for every five shares held.



Elumelu, who is handing over as CEO after 13 years at the helm starting with the old Standard Trust Bank, also blamed the bank’s continental expansion efforts for the dip in form.He said, “Our African strategy is beginning to yield the desired results, with the African bank subsidiaries contributing about 10 per cent (2008: 5.6 per cent) to deposit liabilities of the group.



Elumelu, however, lauded his years as CEO as one that has brought prosperity and wealth to shareholders of the bank, adding that “During these years, we have gone through periods of prosperity and challenges, emerging bigger, stronger and more focused on our vision of becoming Africa’s Global bank.”Meanwhile, the National Coordinator of the Independent Shareholders Association of Nigeria, Mr. Sunny Nwosu, has blamed the recent economic crunch witnessed in the country on the reform activities embarked upon by the Central Bank of Nigeria (CBN).


(Source:Vanguard)



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