BusinessDay... the voice of business: UBA looks to push returns to the maximum

UBA looks to push returns to the maximum
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ABDUL IMOYO on 03 February, 2008 01:00:00
 
The Bank actually proved resilient to the swings in the stock market even as it
was helped by rapid earnings growth. As at the close of equities trading last
year, UBA had moved from a low of N25.31 to N49.50.
On the back of its impressive and industry leading results, the directors of
the bank  declared a dividend of N13.79 billion to be distributed to the
shareholders of the bank at N1.20 for every share held. This is 20% higher than
the N1.00 dividend the bank promised during its last public offer and again
emphasizes the management’s objective of enhancing value and returns to
shareholders. Investors who participated in the bank’s public offer were also
eligible to receive the declared dividend.
Independent analysts put the Bank’s total return in naira term at N35.09, the
highest in the banking sub-sector with capital appreciation of N24.19.
Chairman, Ferdinand Alabraba told shareholders at the annual general meeting
(AGM) held recently in Abuja that the management team has remained resilient in
the face of fierce competition in the industry.
“Your bank’s sterling performance for the 2006/2007 financial year has
established UBA as the most profitable bank in the country today. It also
consolidated our leadership of the financial services sector in terms of reach,
total assets and products”, he said.
Also at the AGM, managing director Tony Elumelu disclosed that the bank has
invested extensively in information technology (IT) noting that the bank’s IT
spending last year stood at $123million.
“We have also deployed massively 900 automated teller machines (ATM) across
the country; we are using these to decongest the banking halls. We are
democratizing payment issues in Nigeria by issuing cards; we did over two
million cards last year. We are also creating more service platforms and opening
new offices to decongest our banking halls”
Speaking on the performance of the bank’s subsidiaries, Elumelu noted that
they are contributing to the group’s bottom line and have met internal
benchmark even though they are new. He said UBA has been doing well in Ghana
where it has five branches just as the bank’s partnership with the Chinese
Development Bank is expected to create value for the Nigerian economy.
“The Chinese bank has more dollars than the World Bank. Access to that
support would create support for the economy; we are going to use that platform
to support infrastructure that would impact the Nigerian economy”, he said.
The bank’s balance sheet size for the last financial year stood at N1.64
trillion, up 56percent from N1.05trillion in 2005/2006. The bank’s deposit
base also grew from N776 billion to N905 billion during the same period.
Besides being the largest bank, UBA’s results show that it is also the most
profitable bank in the country. Profits before tax and exceptional items grew
[115 percent] to N29.5 billion from N12.8 billion in 2006 (18 months period).
There was improvement in the operational efficiency of the bank as the cost to
income ratio dropped from 80 percent in 2006 to 69 percent in 2007.
However, directors say that the bank will push return to investors higher in
current financial year.
They are of the view that global and regional expansion will remain a key
strategy to enable the bank strengthen its national and regional dominance and
to enable it ramp up its global presence.