Understanding UBA’s Records of firsts and Its Rising Growth
United Bank for Africa [UBA] Plc has a track record of firsts in its operating history that have given it the prime positioning in the marketplace as Africa’s global bank. It is the first Nigerian Bank to make an initial public offer and to list in the Nigerian Stock Exchange as far back as 1970, defining the future for the banking industry. It is the first Nigerian bank to issue Global Depository Receipts (GDRs).
The new UBA is a product of the biggest business combination in the banking business in sub-Saharan Africa in 2005. The creation of the new bank flagged off its transformation as a Pan-African institution. UBA stands as Nigerian-headquartered Pan-African Bank with footprints across 19 African countries in addition to its global presence in the United States, United Kingdom and France.
The bank employs one of the most robust digital banking platforms in Africa to serve about 11 million customers in the retail, commercial and corporate market segments in 22 countries. With a huge human resource capacity of 12,745 staff, UBA offers a range of financial services and pension fund custodian services. It has one of the largest retail service networks in Africa with 614 business offices, 2,200 ATMs and 13,500 POS machines in addition to robust online and mobile banking as well as social media.
The bank’s vision to be the leading and dominant financial services institution in Africa is continually being achieved through pioneering steps that set the pace for the banking industry. UBA pioneered the twitter alert in Nigeria, as it is renowned for leveraging on cutting-edge technology and social media platforms to exceed customers’ expectations.
The bank maintains an edge in its global operations. It is the only Sub-Sahara African bank with deposit taking licence in the United States. UBA continues to invest and grow globally with over N70 billion invested in subsidiaries at the end of June 2017. All the African subsidiaries outside Nigeria are grouped under rest of Africa geographic segment and now contribute a significant part of the bank’s earnings. The rest of the world segment covers the group’s operations in Europe and America and represents its high growth zone.
The percentage contribution of earnings from the Nigerian market segment faces a gradual decline as the bank expands globally. The rest of Africa segment contributed N122 billion to gross earnings in 2016, raising its percentage contribution from 21.5% in 2015 to 31.8% in 2016. The segment also produced over N24 billion or 33.7% of the group’s after tax profit of N72.26 billion in 2016, rising from 23.7% in 2015.
The rest of the world segment also maintains a rapid growth. Revenue from the segment grew by 58% in 2016 to about N10 billion, stepping up a strong growth of 57% in 2015. The bank recognises this segment as a high growth area with great potentials to materially contribute to group revenue in the years ahead. With the growing contributions of the two external markets to earnings, the proportionate contributions of the domestic market segment to revenue and profit declined from 78.8% and 80.7% in 2015 to 70% and 65.4% in 2016 respectively.
The ratios for the Nigerian market segment went down further to 62.2% and 60.4% respectively at the end of June 2017. The bank’s management is quite impressed that the subsidiaries outside of Nigeria are increasingly gaining market share. The developments are taking UBA to its chosen operational definition as Africa’s global bank.
Diversification across markets and geography is UBA’s strategy to maintain operating stability and growth in the troubled economic financial market environments facing every country in the world today. The bank’s leadership seems to have foreseen the challenges and charted a strategic course to take advantage of emerging opportunities.
Even as the bank’s chairman, Mr. Tony Elumelu, predicted early last year, growth across Africa has been volatile but the bank made good his promise to adapt and make the most of opportunities in each region. The bank’s earning structure affirms that the strategy of global diversification is creating operating stability at home.
Activating new growth functions and driving defiant growth pedestal in both the size of the balance sheet and earnings figures are the tasks on hand for Mr. Kennedy Uzoka – a mechanical engineer, who took over as the new group managing director/CEO of UBA in August 2016.
Prior to his appointment, Uzoka was CEO, UBA Africa, covering the bank’s operations across 18 countries in Africa. He was also in charge of e-banking and information technology and has handled a number of key positions in the bank such as the New York and London operations, group treasury, international financial institutions, UBA Pensions Custodians, among others.
UBA was incorporated in Nigeria in 1961 and took over the assets and liabilities of British and French Bank Limited, which had carried on banking business in Nigeria since 1949. The bank’s promise to its customers is to make banking simple, fast and convenient cross its diverse service channels. UBA is one of the first three Nigerian-listed entities to be certified for strong governance by the joint assessment team of CBi/NSE.