United Bank for Africa (UBA), has proven itself as one of Nigeria’s systemically important banks, judging by the record profit it declared in its first half of 2023. This has confirmed it as the most profitable bank in the country.
A Systemically Important Bank (SIB) is a bank, whose failure might trigger a financial crisis. They are colloquially referred to as “too big to fail” banks.
Other SIBs in Nigeria’s banking sector include Access Bank, First Bank of Nigeria, GTBank and Zenith Bank.
UBA’s profit before tax rose to N404 billion in the first half of 2023, representing a 371 percent increase.
The chairman of the United Bank for Africa (UBA), Tony Elumelu, has given an insight into what the group did to achieve the growth it recorded in 2023.
Mr Elumelu said the bank’s strategic investment decisions over the past few years have indeed translated to huge returns for its investors, despite the challenging business environment witnessed in the last two years.
“I am proud of how as a Group, we have been able to further consolidate on the new capabilities we have built, novel customer solutions we have deployed, efficiency gains recorded and the growth prospects we have leveraged from a recovering world,” he said.
“These were the building blocks for the very strong financial performance and the growth delivered by your Group in 2023, further confirming the wisdom of the investments we made and the strategy we have pursued, to ensure the diversification and sustainability of our business model.”
He assured the bank’s capacity to sustain this momentum especially as economic activities recover in these desperate times.
“Our goal is to continue to build strong brand loyalty with our customers and create additional value for our shareholders, whose underlying support has positioned UBA for continued growth,” he said.
UBA’s Group Managing Director, Oliver Alawuba, who was also at the meeting, also spoke about the improved performance of the bank’s subsidiaries in the financial year under consideration.
“We are happy that the global community recognises the role our Group is playing in the transformation of the African economic landscape through innovative and customer focused banking services,” Mr. Oliver Alawuba said.
UBA Group Chairman, Tony Elumelu, stated ‘I am very pleased to announce Oliver Alawuba as the new Group Managing Director of the UBA Group. Oliver has extensive experience in Nigeria and our African network and is well equipped to advance our pan-African and global strategy.
Alawuba joined the UBA in 1997 and has held a series of senior positions, including the chief executive officer of UBA Ghana.
In his new role, Alawuba oversees all the group’s banking operations across its twenty African country network and globally in the United Kingdom, the United States of America, France, and the United Arab Emirates.
Under their leadership, UBA’s profit after tax grew by 438 per cent in the first half of 2023 to N378.24 billion, from N70.34 billion in the corresponding period of 2022.
A look at the metrics that contributed to UBA’s growth showed that the bank’s performance was driven by the progress the Group made in digital payments, retail penetration and also the benefits it derived from the effect of revaluation gains, arising from the harmonization of foreign exchange rates at the different access windows in Nigeria.
UBA’s operating income soared by 206.6 percent to reach N783.96 billion in June 2023 from N255.67 billion reported a year earlier.
This expansion was not restricted to one area but rather permeated the bank’s main sources of revenue, highlighting its resiliency and power.
The gross income of UBA increased significantly, rising by 164 percent to N981.78 billion in June 2023. The bank’s ability to seize chances and increase revenue creation is demonstrated by this excellent result, which well exceeds the N372.36 billion reported in June 2022.
Tony Elumelu, Chairman of the UBA Group, had strategically positioned the bank to deepen ties between Africa and the rest of the globe. In order to promote economic growth, promote international trade, and facilitate investment, this approach makes use of UBA’s distinctive presence in key financial hubs and its broad network across African nations.
The Elumelu strategy’s effectiveness is seen from UBA’s impressive performance in H1 2023. In addition to boosting the bank’s profitability, it has also strengthened its position as a key participant in the global financial ecosystem. By employing this method, UBA is able to forge beneficial ties with foreign markets while making significant contributions to the economic growth of Africa.
UBA’s dedication to serving as the financial intermediary for Africa and the rest of the world is a testament to its vision and ambition in a world where international connection is more crucial than ever. UBA is well-positioned to be a catalyst for economic advancement, both in Africa and internationally, as it continues to broaden its worldwide reach and improve its services.
Olamide Adeniji is a member of the editorial team of TheScript Newspaper
