E-Financial
UBA Grows Loan Book By 26.7%, Income Hits N48Bn
United Bank for Africa Plc (UBA) has released its nine months financial results, showing a significant 26.7% growth in loan portfolio, as the bank positions to take advantage of emerging opportunities in Nigeria’s fast growing economy.
The nine months results put the bank’s new loan portfolio position at N870.4 billion as at September 2013, representing a 26.7% increase on N687.4 billion on the bank’s loan portfolio for full year of 2012.
Explaining the significant growth in the Group’s loan portfolio, Phillips Oduoza, group managing director, said the growth was “In line with our guidance for loan growth. We increased our exposure to the power, upstream oil and gas and telecoms sectors of the economy”.
UBA played actively in the financing of big ticket deals, especially in the power sector recently, with potential long term impact on the bank’s future profitability. Some of the major deals UBA actively participated in include taking up $120m (N19.44bn) of the financing in respect of Transcorp Ughelli Power Plant.
The bank also acted as Mandated Lead Arranger, underwriting the entire facility of $122m (N20bn) for Kann Utilities’ acquisition of the Abuja Electricity Distribution Company, financing the payment of 75% acquisition of 60% equity stake in Ikeja Electricity Distribution Company while the bank also threw its financial weight behind Aura Energy for the Acquisition of Jos Electricity Distribution Company, acting as the lead arranger for N9.6 billion loan to finance the payment of 75% of Aura’s 60% equity stake in Jos Electricity Distribution Company.
“We firmly believe that the effect of the asset creation decisions we have taken this quarter will have a sustained impact on our revenue growth” Oduoza explained in a statement from the bank.
The impact on revenues is already being seen as the bank announced gross earnings of N188 billion, representing 12.5% increase from N167.1 billion in the same period of last year while riding on the back of the expansion in loan book, interest income rose 18.8% to N133 billion from N112 billion.
Oduoza said that the “Results for the quarter reflect strong contributions from UBA’s Corporate Banking as shown in the increase in interest income generated from loan growth from Corporate Banking Division and from African Commercial Banking Groups”
Also customer confidence in the Group’s brand continues to soar as total deposits rose 22.1% to N2.17 trillion.
Explaining the significant increase in deposits, Ugochukwu Nwaghodoh, chief finance officer of the UBA Group said, “The bank was able to effectively leverage its branch network in Nigeria and across eighteen countries in Africa to generate cheap deposit”
The bank is already seeing some of the benefits of its positioning with a significant 28.5% increase in total comprehensive income for the period to N48.74billion, compared with N37.92billion in the same period of last year.
A profit of N43.4billion was achieved for the period, representing an increase of 2.8% over the N42.2billion recorded in the corresponding period of last year.
There was also significant increase in other key performance indicators with total assets rising by 13.5% to N2.58 trillion from N2.27 trillion while total equity rose 17.2% to N225.6 billion from N192.5billion.
“Our bank remains resilient and our focus is on delivering a set of full year results that will be able to adequately reward our shareholders. We are already reaping the benefits of operating an African strategy that is anchored on our in-depth knowledge of every market we operate in”. Oduoza said.
Oduoza also assured that UBA remains focused and committed to achieving set targets for 2013 “especially, our long term aspirations of being the leading financial services institution in Africa”, explaining that “Project Alpha”, which details UBA’s strategic intent to take advantage of Africa’s fast growing economy to boost the bank’s growth, ” is beginning to bear the expected results as we are now reaping the benefits of delivering an improved customer experience and improved electronic banking platform to our various customer segments”.
United Bank for Africa (UBA) is Africa’s global bank with operations in 19 African countries including Nigeria, as well as offices in New York, London and Paris providing broad-based banking services to over seven (7) million customers. The Group offers a bouquet of banking services and products designed to meet the specific banking needs of its diverse multi-cultural and multi-lingual customer base in three uniquely different continents.
E-Financial
Lagos State Appoints MoneyMaster as Payment Partner for “Ounje Eko” Programme
“Ounje Eko”, the food price discount initiative of the Lagos State Government, has appointed leading payment service bank, MoneyMaster Payment Service Bank Limited (MMPSB), as its collaborator in the bid to ensure ease of payments at the market.
MoneyMaster is one of the Central Bank of Nigeria-licensed Payment Service Banks (PSBs) to promote financial inclusion across Nigeria.
Under the partnership, MMPSB will apply its cutting-edge payment solution to engender easy payment and reconciliation in order to make the experiences of Lagosians who will be getting their food supplies from the markets pleasurable. Its payment solution is also all-encompassing and ensures real time value to payment destinations.
The mobile bank was appointed as the collection and payment partner for “Ounje Eko” Food Markets programme which is a government initiative serving the five divisions of Lagos State. Consequent on this, MoneyMaster Payment Service Bank will collect payments in 57 LCDAs in the state.
The partnership gives credence to the quality of payment solutions that MoneyMaster is reputed for in its services to its growing business clientele in private and public sectors.
E-Financial
CBN, EFCC Probe Banks, Firms over Alleged Forex Racketeering
Central Bank of Nigeria (CBN), is investigating irregular foreign exchange transactions and forward contracts valued at approximately $2.4 billion.
The inquiry follows an extensive audit by Deloitte, which scrutinized $7 billion in dollar debts accumulated under the bank’s previous leadership.
In the aftermath of the 294th Monetary Policy Committee meeting in Abuja, Yemi Cardoso, governor of CBN, disclosed to journalists that the investigation, supported by the Economic and Financial Crimes Commission, among other security bodies, aims to clarify the legitimacy of these FX allocations identified as problematic by the audit.
“It was determined that a number of these transactions did not qualify…they were outright illegal. The law enforcement agencies are now looking into those transactions that as far as we are concerned, are not valid to be paid,” Cardoso detailed, emphasizing the unlawful nature of these forex deals.
The crux of the investigation lies in the audit findings that a significant portion of the scrutinized transactions lacked proper documentation and, in many instances, were deemed outright illegal.
However, the unfolding investigation has raised concerns within the organized private sector, with some entities contemplating legal action against commercial banks for unresolved forex bids.
Despite these tensions, Governor Cardoso reassures that the foreign exchange market remains open and transparent, inviting stakeholders to address their forex needs through the official channels.
Furthermore, Cardoso clarified the distribution of fertilizers to farmers as a one-off measure and not indicative of a shift back to direct interventions by the CBN, underscoring a commitment to strategic, regulatory governance rather than direct market involvement.
E-Financial
CBN Urges Banks to Expedite Action on Recapitalisation
Central Bank of Nigeria (CBN) has directed deposit money banks in the country to expedite action to increase their capital base from the current ₦25bn.
Olayemi Cardoso, governor of CBN, stated this during the apex bank’s 294th meeting of the Monetary Policy Committee (MPC) on Tuesday in Abuja, when the MPC hiked the interest rate by 22.75% to 24.75%.
The apex bank chief said the MPC examined developments in the banking sector and expressed satisfaction that the industry remained stable. The committee, however, said to guard against risk, commercial banks in the country should accelerate their recapitalisation efforts.
Cardoso said, “The MPC also reviewed developments in the banking system and noted that the industry remains safe, sound, and stable. The committee thus called on the bank to sustain its surveillance and ensure compliance of banks with existing regulatory and macro-potential guidelines.
“The MPC also enjoined the banks to expedite actions on the recapitalisation of banks to strengthen the system against potential risks in an increasingly globalised world.”
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