UBA commences the consolidation of its Africa Operations
Category: Investors NewsBeat
Friday, May 18, 2012 / Temple ASAJU / PROSHARE WebTV
The United Bank for Africa (UBA) Plc stated today that its expansion processes around major markets in the African continent has reached the consolidation stage.
Speaking at the bank’s Annual General Meeting (AGM) held today in Lagos , Nigeria ; the Group Managing Director and Chief Executive Officer, Phillip Oduoza explained to shareholders the significant roles being played by the subsidiaries spread across the continent in its estimable financials.
Oduoza, said “the procurement of licence(s) from one country to the other started a while back now spans over eighteen African countries today.
The GMD announced that based on varying economic drivers, some of the African operations are beginning to return profit to the holding company in Nigeria .
He remarks, “In Guinea , for example we were able to break even within a spate of 3 months and write off their expenses. They began to yield profit Month-on-Month.” He added that “in a country like Ghana , it took a while for the bank to start making profits but today, Ghana is a flagship subsidiary and one the best for UBA. It currently generates about $3million Month-on-Month Profit Before Tax (PBT).”
In general, 12 of the African subsidiaries submitted returns for the 2011 FYE, while 15 declared returns in Q1, 2012.
The African countries contributed 13% to the PBT of UBA in FYE 2010. In 2011, the same operations contributed 18%. In Q1 2012 the contributions have increased to 19%. The GMD says by the end of 2012, it is expected that the African subsidiaries would be turning over 25% contributions to the bank’s financials.
Stating that “UBA’s ultimate goal in the African countries is to have approx 50% contributions from Africa and 50% yields from Nigeria , thereby providing additional returns to investors.
On the Zambian branch, operations here is confronted with challenges arising from the regulatory authority’s requirement for a capital base increase from $2million to $100million, “The options available is for us to either convert to a local bank (which requires $20million capital base), to merge with some other banks or we meet the $100million demands” said Oduoza.
With a previous forecast of N15billion, UBA yielded a PBT of N16billion in its 2011 FYE.
The bank proposed a bonus of 1 for 50 to shareholders but promised dividends payments in 2012. Under the approved restructuring plans of the bank, its various subsidiaries will be spun-off while the bank will transform into UBA Holdings Plc.