THE Group Managing Director, GMD, UBA Plc, Mr. Kennedy Uzoka, clocked one year in office today (Tuesday). Editor, Daily Champion, THOMAS IMONIKHE, reviews his tenure so far and the reactions of shareholders who have applauded his performance given the current harsh economic operating environment.
CERTAINLY the Group Managing Director, GMD of United Bank for Africa, UBA Plc, Mr. Kennedy Uzoka, who was exactly one year in office on Tuesday, August 1, has justified every ounce of the confidence reposed in him by the Board of the multinational financial institution judging by his commitment to duty and leadership traits since taking over from Mr. Phillips Oduoza, the immediate past GMD of the Bank who retired from service on July 31 last year.
This is not surprising given his pedigree and over two and a half decades track record of service as one of the nation’s foremost bankers who had worked closely with such financial guru as Mr. Tony Elumelu, the incumbent chairman of the Bank’s Board of Directors and also a past GMD of the bank. Under Elumelu, it transformed from a single-country bank to a pan-African institution with millions of customers.
Consequently, it has become a leading Pan-African financial institution, currently offering banking services to over 14 million customers across over 1,000 business offices and customer touch points in 19 African countries including Nigeria with presence in New York, London and Paris .And Elumelu had left nobody in doubt as to the capacity and integrity of the mechanical engineer -turned banker as well as that of Mr. Victor Osadolor, whose appointment as the Deputy Managing Director, UBA Group took effect same date to deliver on the Bank’s mission statement when he declared ahead of their resumption of duties that: “Kennedy brings an extremely strong skill set and is ideally positioned to lead UBA in its next phase of growth.”
“His most recent experience of managing the Group’s increasingly important African business is particularly relevant, as we all work to build one of the leading financial services franchises in Africa. I have no doubt that both he and Victor with their expertise and depth of business experience will ensure that the Bank is best positioned to deliver on its strategic ambition”, he noted last year.
Before his elevation, however, Mr. Uzoka has been leading the transformation of the bank for some time after completing the Advanced Management Programme of Harvard Business School where he garnered quality experience in commercial banking, strategy and business transformation, before serving as Deputy Managing Director, UBA Group.
He was also the CEO of UBA Africa, responsible for the Group’s operations in 18 countries across Africa. A graduate of Mechanical Engineering from University of Benin, Mr. Uzoka is also a holder of a Masters Degree in Business Administration (MBA) from University of Lagos. In other words, given his amazing credentials and tutelage, Uzoka had no impediment taking the hot seat of one of Africa’s best and most healthy banking Groups.
UBA’s has over 69 years of providing uninterrupted banking operations dating back to 1948 when the British and French Bank Limited (BFB) commenced business in Nigeria. BFB was a subsidiary of Banque Nationale de Crédit (BNCI), Paris, which transformed its London branch into a separate subsidiary called the British and French Bank, with shares held by Banque Nationale de Crédit and two British investment firms, S.G. Warburg and Company and Robert Benson and Company.
It is on record that a year later, 1949; BFB opened its offices in Nigeria to break the monopoly of the two existing British owned banks in Nigeria then. Following Nigeria’s independence from Britain on October 1,t 1960, UBA was incorporated on February 23, 1961 to take over the business of BFB and listed its shares on the Nigerian Stock Exchange (NSE) in 1970 becoming the first Nigerian bank to subsequently undertake an Initial Public Offering (IPO). It became the first sub-Saharan bank to take its banking business to North America when it opened its New York Office (USA) in 1984 to offer banking services to Africans in Diaspora.
Meanwhile, today’s UBA emerged from the merger of then dynamic and fast growing Standard Trust Bank, incorporated in 1990 and UBA, one of the biggest and oldest banks in Nigeria. The merger was consummated on August 1, 2005, one of the biggest mergers done on the NSE. Following the merger, UBA subsequently went ahead to acquire Continental Trust Bank in the same year, further expanding the UBA brand. UBA subsequently acquired Trade Bank in 2006 which was under liquidation by the Central Bank of Nigeria (CBN).
UBA had another successful combined public offering and rights issue in 2007 and made further banking acquisitions of three liquidated banks- City Express Bank, Metropolitan Bank, and African Express Bank. The bank also acquired Afrinvest UK, rebranding it UBA Capital, UK. The quest to build a strong domestic and African brand intensified in 2008 when UBA made further acquisitions of two liquidated banks, Gulf Bank and Liberty Bank, while at the same time intensifying its African footprint with the establishment of UBA Cameroon, UBA Cote d Ivoire, UBA Uganda, UBA Sierra Leone, and UBA Liberia as well as the acquisition of a 51 per cent interest in Banque Internationale du Burkina Faso, which was the largest bank in the country with 40 per cent market share. Currently, UBA has 18 African subsidiaries contributing about 20 per cent of the Group’s balance sheet with a target of contributing 50 per cent.
On December 13, 2012, the shareholders of UBA Plc unanimously voted for the bank to restructure into a Monoline Commercial Banking Model in order for it to fully comply with the new CBN guidelines for commercial banks in Nigeria, which repealed the erstwhile universal banking regime.
The Group’s audited report revealed impressive growths as gross earnings rose by 21.9 per cent from N314.84 billion in 2015 to N383.65 billion in 2016, while interest income had grown by 15 per cent from N229.63 billion in 2015 to N263.97 billion. With 2.9 per cent increase in interest expense from N96.03 billion to N98.77 billion, net interest income rose by 23.7 per cent to N165.2 billion in 2016 compared with N133.6 billion in 2015 which showed the profitability of the group’s core banking business. Profit before tax grew by 32.4 per cent to N90.64 billion in 2016 as against N68.45 billion in 2015 while after taxes, net profit rose by 21.1 per cent from N59.65 billion to N72.26 billion. With these, earnings per share increased from N1.79 in 2015 to N2.04 in 2016.
The balance sheet also indicated that total assets rose by 27.3 per cent from N2.75 trillion in 2015 to N3.5 trillion in 2016 and customers’ deposit increased by 19.7 per cent from N2.08 trillion to N2.49 trillion. Loans and advances recorded a growth of 44.2 per cent to N1.50 trillion in 2016 as against N1.04 trillion in 2015, showing the bank’s dogged commitment to economic development. Shareholders’ fund shot up by 33.5 per cent from N325.83 billion in 2015 to N434.85 billion in 2016.
Similarly, shareholders had cause to smile as the bank increased dividend payout to shareholders by 25 per cent. Shareholders got final dividend payment of N19.9 billion for the 2016 business year, in addition to N7.3 billion interim dividend paid after the audit of its 2016 half-year results. With this, shareholders received a final dividend per share of 55 kobo in addition to interim dividend of 20 kobo, bringing total dividend for the 2016 business year to 75 kobo as against 60 kobo paid for the 2015 business year. A dividend yield of more than 14 per cent further placed UBA within the top yields at the stock market. This surpassed the 13.01 per cent coupon on the two-year tenored Federal Government National Savings Bonds.
The latest audit report confirmed UBA Group’s steady performance over the years. A five-year medium term review showed that total assets have grown steadily from N2.27 trillion in 2012 to N3.50 trillion in 2016. Net loans and advances more than doubled from N658.9 billion in 2012 to N1.50 trillion in 2016. Customers’ deposits also followed the uptrend, jumping from N1.72 trillion in 2012 to N2.49 trillion in 2016. Shareholders’ funds rose consecutively from N189.11 billion in 2012 to N434.85 billion in 2016. Profit before tax, which stood at N52.01 billion in 2012, had defied recession to rise to N90.64 billion in 2016 while profit after tax rose from N54.77 billion in 2012 to N72.26 billion in 2016.
Besides, the Board and shareholders have every reason to applaud Mr. Uzoka following the bank’s performance in 2017. UBA’s unaudited first quarter results for the period ended March 30, 2017, showed the group recorded a profit after tax, PAT, of N22.4 billion, showing 32 per cent growth compared to N17.0 billion achieved in the corresponding period of 2016.
Reacting to the results, some shareholders of the UBA have commended the efforts of the management team of the Bank led by Mr. Uzoka in the last one year, describing the performance as exemplary and indicative of greater heights ahead.
The shareholders further noted that the present leadership has been relentless and focused in repositioning the bank thereby gaining the confidence of stockbrokers who now recommend UBA shares as must shares following the five-star performance of the man at the helm of affairs in moving the bank forward. According to them, given the pragmatic and result-oriented way they are running the bank, shareholders would have more returns on their investments in the near future.
Speaking with Daily Champion, a Shareholder Activist, Alhaji Olatokunbo Gbadebo, noted that with the profile of the Chairman, Mr. Tony Elumelu, who founded the Standard Trust Bank that later merged with UBA, in which he was pioneer GMD, shareholders have better days ahead. Overall, he said the incumbent GMD has so far performed excellently and urged the management to create more corridors in their branches in order to reduce overcrowding noticed in some of its banking halls. “I have observed that there is need for improvement of the website too”, he declared.
In separate reaction, National President, Constance Shareholders Association of Nigeria, Alhaji Shehu Mikail, said that in the last one year, the management of UBA had ensured that expectations of shareholders are met, adding that the bank is well positioned not only in Nigeria now, but in Africa as a whole.
According to him, in the last one year, there has been series of initiatives from the bank towards boosting Small and Medium Scale Enterprises (SMEs) financing in Nigeria while the management ensured sustenance of adequate corporate governance. He added: “In this one year in office, shareholders have received interim dividend. I can call him a guru in the financial services sector”.
Going forward, Alhaji Mikail urged Mr. Uzoka to pay more attention towards improving the Information Technology (IT) level of the bank, stressing the need to include the major three Nigerian languages, Hausa, Ibo and Yoruba in its data form to promote financial inclusion strategy. “So far so good, he is doing well. To me, if adequate financial inclusion strategy is pursued, that would bring in more customers into the bank and customer base would increase,” he said.
Meanwhile, notable rating firms such as Fitch and Augusto, among others, had observed that UBA has strong fundamentals to support substantial price appreciation considering the Group’s audited report and accounts for the year ended December 31, 2016 supported the positive view of its earnings potential in spite of the Nigerian economic recession.
“We note improvement in profitability and the bank’s good asset quality. The rating takes into cognizance the weak macroeconomic climate on the banking industry’s asset quality, in which we do not expect UBA to be excluded. Nonetheless, we note positively its diversified geographical reach, which will cushion to an extent the impact of the weak Nigerian economic climate,” Agusto & Co stated in its recent credit rating report. Therefore, it upgraded UBA’s rating from “A+” to “Aa-”, with a stable outlook, citing the bank’s improved capitalisation, good liquidity and large pool of stable deposits, strong domestic presence supported by the bank’s extensive branch network and growing alternative banking channels.
Also, Fitch International, one of the foremost global rating agencies, in its latest report affirmed and upgraded its ratings for the bank, citing strong earnings and asset quality. Fitch affirmed UBA’s viability rating at “B” as the pan-African banking group continues to sustain its benchmark asset quality and strong profitability amid industry and macroeconomic challenges. UBA is one of the few banks with strong risk management framework, which has helped in keeping non-performing loans ratio at a moderate level of 1.74 per cent as at the end of March 2016.
Similarly, International Rating Agency, Standard and Poor’s (S&P) had in May this year assigned its ‘B’ long term and ‘B’ short term global scale counterpart credit ratings to the UBA.
These ratings on the Bank are also at par with S&P ratings on the Nigerian Sovereign, while the S&P’s ‘B’ rating is the highest rating currently assigned to any Nigerian-based financial institution, thus reinforcing the respectable quality and strength of UBA, the third largest Nigerian-based bank by total assets, deposits and profits.
It further noted that UBA’s market position is supported by its good franchise in the corporate and retail segments in Nigeria as well as geographic diversification, with operations in 19 African countries (Nigeria inclusive). More so, UBA is the only West-African bank with operations in the United States, in addition to its presence in the United Kingdom and France.
Recognizing the strong profitability and capitalization of UBA, S&P noted:“We expect that UBA’s earnings will be resilient despite the economic slowdown in Nigeria. We believe the bank’s capital and earnings under our risk adjusted capital and earnings framework will remain moderate over the next 12-18 months with its capital adequacy ratio remaining well above minimum regulatory requirements.”
It is worthy of note that the UBA has won Bank of the Year, 2016, award at the Annual Bankers Award event in London and emerged Most Innovative Bank of the Year at the Independent Newspapers Awards recently to the delight of the Board, Management and Customers. The award was in recognition of innovative products and services introduced by the bank in the past years towards meeting customer s’ needs.
Before that, the Bank had swept several awards, including Finnacle Client Innovation Awards and Best “Bank of The Year 2016” country awards in Gabon, Congo-Brazzaville, Senegal, Cameroon and Chad at the annual Africa by The Bankers Magazine Bankers Award in London, a feat that Mr. Uzoka dedicated to the customers, whose loyalty, support and patronage, he said, have remained the fountain of the Group’s growth and competitive edge in the African continent.
Facts and figures indicate that UBA has over the years been very committed to being a socially responsible company and role model for all businesses in Africa. And to ensure a social contract between the bank, the community and its people, the UBA became the first financial institution in Nigeria to institute a foundation -UBA Foundation- which draws its inspiration from the Group’s intrinsic values,”humility, empathy, resilience, integrity and its mission statement; to be a role model for African businesses, abiding by the utmost professional and ethical standards, and creating an enduring institution. These values have, and will always be the factors that inspire us to ‘Do Well and Do Good.’ By extending the hand of partnership to our communities, the Group aims to ensure that goodwill is cultivated and that our operations are sustainable and beneficial”.
As the Corporate Social Responsibility, CSR, arm of a Bank, UBA Foundation has set standards for other CSR groups; especially concerning the true meaning of CSR and is committed to the socio-economic betterment of the communities in which the bank operates. Since 2006, UBA Foundation has spent over N560 million in the focus areas referred to as E.E.E.S (an acronym that connotes EASE) – providing ‘EASE’ to the community: Education, Environment, Economic Empowerment, special projects.
The Board and Management of UBA have been upbeat in their determination to making the brand strongest and biggest not only in Nigeria but on the continent for which the Banking Group is well-positioned for sustainable long-term growth that will continue to ensure adequate and commensurate returns to shareholders. The Chairman of the bank, Mr. Elumelu, said that most African countries were implementing policy measures that should help stimulate inclusive economic growth, ease macro pressures and lower the cost of doing business.
According to him, while Africa has experienced a difficult period; the UBA group welcomed 2017 with renewed optimism as it truly believes that “Africa is Rising”. “Our Pan- Africa operations have delivered on the promises we made at the outset of our growth strategy and we are beginning to reap the benefits of one of the largest network in Africa. As we navigate the fast changing market place, we are increasingly digitalising our core business, as we explore new markets and means of embracing customers experience, gain increased share of customers’ wallet and offer new services. I am very optimistic that we will sustain the strong growth trajectory, as we continue to gain market share, leveraging our core values of enterprise, excellence and execution,” he stated.
For his part, Mr. Uzoka also assured that the Bank is optimistic of continuing its robust growth in the years ahead. “The 2017 outlook remains positive in most of our markets. We are not unaware of the macro challenges, competition and constantly changing customer preferences. We will further sweat our unique Pan Africa platform to improve productivity, extract efficiency gains and grow our share of customers’ wallet across all business lines and markets,” he said.
According to him, as the Group continues with its customer first philosophy, shareholders can look forward to better performance, especially with the outlook remaining positive in most of the Bank’s markets.“We will build on our strong governance culture, zero-tolerance for infractions and transparency in furthering our frontiers of leadership in the African market,” he assured the Board and shareholders even as the latter wished the GMD a successful tenure.
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