UBA Voices Confidence in Meeting N500 Billion Capital Requirement
United Bank for Africa Plc (UBA) has expressed optimism about its ability to comply with the Central Bank of Nigeria’s (CBN) revised capital base requirement for commercial banks with international authorization. During the bank’s 2023 Full Year Investors’ Conference Call on Friday, UBA’s Group Managing Director/Chief Executive Officer, Oliver Alawuba, assured local and international investors that the bank is well-positioned to meet the N500 billion capital threshold set by the apex bank.
Alawuba stated that UBA remains among the top-capitalized banks in the country, with shareholders’ funds exceeding N2 trillion. He revealed that the bank is actively exploring a well-defined strategy to boost its capital base further, which may involve a combination of options such as a rights issue or private placement.
“We are confident in our ability to meet the CBN’s capital adequacy requirements and will keep investors informed as we progress,” Alawuba said, emphasizing the bank’s commitment to transparency and regulatory compliance within the stipulated timeframe.
The CBN’s recent directive mandated commercial banks with international authorization to maintain a minimum capital base of N500 billion.
Impressive Financial Performance
During the conference call, Alawuba highlighted UBA’s remarkable financial performance in the 2023 fiscal year. The bank recorded a 143% surge in gross earnings, rising from N853.2 billion to N2.08 trillion. Total assets also witnessed a significant 90.22% increase, closing at N20.7 trillion, up from N10.9 trillion in 2022.
UBA’s profit before tax grew by an impressive 277%, reaching N757.7 billion, compared to N200.9 billion in 2022. Additionally, the bank’s profit after tax soared by 257%, from N170.2 billion in 2022 to N607.7 billion in 2023.
Risk Management and Future Outlook
To address the potential risk of non-performing loans (NPLs), especially in the face of challenging business environments across Africa, Alawuba outlined plans to implement proactive credit monitoring, loan restructuring strategies for at-risk loans, and increased provisioning coverage.
“We expect to keep NPLs at 4.5% for the 2024 full year. This commitment to credit quality is to further strengthen our ability to support our customers, protect shareholders’ value, and contribute to overall economic activity, even in a dynamic economic environment,” he explained.
UBA’s Executive Director for Finance and Risk Management, Ugo Nwaghodoh, expressed confidence in an even better performance in the 2024 financial year, citing the bank’s growing investments in technology and IT security as key drivers of future growth.
“The Group remains fervently committed to sustainable growth and maintaining its strong compliance and risk management practices culture even as we drive our business through the next phase of growth,” Nwaghodoh stated.
UBA operates in 20 African countries, with a presence in major financial centers such as New York, London, Paris, and Dubai.
