The bank’s total assets also grew by 37 per cent to N7.7 trillion for the year under review.
The 2020 audited financials filed yesterday at the Nigerian Stock Exchange (NSE) showed that despite the challenging business environment during the COVID-19 pandemic and the resultant effect on economies globally, the bank’s Profit Before Tax (PBT) was impressive at N131.9 billion.
The figure was a huge improvement compared to the N111.3 billion it posted at the end of the 2019 financial year. In the same vein, the Profit After Tax (PAT) rose remarkably by 27.7 per cent to N113.8 billion compared to N89.1 billion recorded at the end of the previous financial year.
The bank’s gross earnings grew by 10.8 per cent to N620.4 billion, compared to N559.8 billion recorded in the corresponding period of 2019.
On the cost side, Operating Expenses grew by 10.1 percent to N249.8 billion, as against N217.2 billion in 2019, well below average inflation rate of 13.2 per cent for the year, thus reflecting the bank’s cost effectiveness.
In its usual tradition of rewarding shareholders, the Bank proposed a final dividend of N0.35 kobo for every ordinary share of 50 kobo. The final dividend, which is subject to the affirmation of the shareholders at its Annual General Meeting (AGM), will bring the total dividend for the year to N0.52 kobo as the bank had paid an interim dividend of N0.17 kobo earlier in the year.
UBA recorded a remarkable 24 per cent growth (to N2.6 trillion) in loans to customers, whilst customer deposits increased by 48.1 per cent to N5.7 trillion, compared to N3.8 trillion recorded in the corresponding period of 2019, reflecting increased customer confidence, enhanced customer experience, successes from the ongoing business transformation programme and the further deepening of its retail banking franchise.
Commenting on the result, the Group Managing Director/CEO, Kennedy Uzoka noted that the year 2020 was important for UBA Group, as it gained further market share in most of its countries of operation.
He said: “We ended a very challenging year on a reassuring note. The bank recorded double-digit growth in both our top and bottom lines, as gross earnings and after-tax profit grew by 10.8% and 27.7 per cent to N620.4 billion and N113.8 billon respectively. Return on equity was 17.2 per cent, even as our cost-to-income ratio moderated to 61.3 per cent.
“Our earnings per share of N3.20 is a 26.8 per cent growth from the preceding year, as we continue to ensure maximum value creation for our highly esteemed shareholders.”
Continuing, Uzoka said: “Despite the tumultuous impact of Covid-19 pandemic globally and across our 23 countries of operation, we created N519.0 billion additional loans as we continued to support our customers and their businesses.
“Customer deposits grew 48.1 per cent to N5.7 trillion, driven primarily by additional N1.8 trillion in retail deposits. As a global bank, we remain well capitalized and determined to successfully drive financial inclusion on the continent through our innovative products and vast network. Our capital adequacy and liquidity ratios came in at 22.4 per cent and 44.3 per cent, well above the respective regulatory minimum of 15 per cent and 30 per cent.”
Speaking on the performance, the Group Chief Financial Official, Ugo Nwaghodoh, said: “The persistent low interest rate environment in 2020 exerted significant downward pressure on margins.
“Notwithstanding, our interest income for the year grew by 5.7 per cent (to N427.9 billion), driven by 8.2 per cent and 7.5 per cent year-on-year growth on interest income on loans and investment securities respectively.
“Our interest expense declined by eight per cent (to N168.4 billion) driven largely by a 34.2 per cent decline in interest expense on customer deposits in our Nigerian operations, bringing down the Group’s cost of funds to 2.9 per cent, from four per cent in 2019.”