Shares in United Bank for Africa plc (UBA) yesterday rose 1.32 percent, outperforming the Nigerian Stock Exchange (NSE) all share index which was down 1.69 percent after the bank said gross earnings rose 46 percent in the 15 months to December 2009.
UBA became the second bank to release its full year result after Zenith Bank, in compliance with the common year end accounting period for banks. The bank’s share price closed at N15.50 from the day’s opening of N15.49. The directors said UBA experienced strong growth in 2009 despite the economic challenges arising from the global financial crisis and capital market downturn.
Specifically, gross earnings rose to N246.72 billion while net interest income increased by 57 percent to N118.189 billion. However, its pre-tax profit had fallen by 76 percent to N13.66 billion, hit by provisioning for loan losses.
The directors have recommended a dividend of 10 kobo per share and a bonus share issue of one new share for every five held. It was gathered that the bank’s exceptional items for the period included net charge of N38 billion for diminution in assets value following stress tests by the Central Bank of Nigeria. Group chief executive officer (CEO), Tony Elumelu, described the results as a reflection of the bank’s “solid foundations, strong capital base (risk weighted capital adequacy ratio of 16.3 percent) and focus on risk management and corporate governance.”He added that the group’s continental expansion play continues to be a significant differentiator and source of future growth.
BusinessDay learnt that UBA commenced operations in eight new African countries during the year, increasing the total Africa presence to 16 countries as it seeks to diversify its earnings stream and open up considerable prospects for the distribution of its product suite.
The countries of operation include Nigeria, Ghana, Cameroon, Liberia, Cote d’Ivoire, Senegal, Benin, Burkina Faso, Kenya, Zambia, Tanzania, Uganda, Sierra Leone, The Chad, Gabon and Guinea. A statement by Martin C. Anyanwu, director, group marketing and corporate relations, noted that ”the disciplined approach to growth is already providing the group with material diversification as revenues from African operations (ex-Nigeria) grew by 330 percent during the period and now represent 7.2 percent of the group’s gross earnings.”
Anyanwu added that the group expects stronger growth and more material contribution from its ex-Nigeria operations in 2010. UBA is one of Africa’s leading financial services institutions, offering banking services to 7.5 million of customer accounts across 750 branches and other channels.