UBA hits N1trillion balance sheet(1)
December 18th, 2006 Ogbuotobo Chuks || chuks@stockmarketnigeria.com
Ogbuotobo Chuks
United Bank for Africa (UBA) plc has posted ground-breaking results, with a balance sheet size of N1.05 trillion, for its financial year ended, September 30, 2006. This undoubtedly places the bank ahead of its counterparts in the Nigerian scene.
No other bank in Nigeria and indeed West Africa has attained such size, and this backs up UBA’s proclaimed vision to be the undisputed leading and dominant financial services group in Africa.
Despite huge integration costs associated with the successful merger (between legacy banks STB and the old UBA), which include IT integration, harmonization of staff salaries and a voluntary exit programme, the bank posted a healthy profit of N12.8 billion. Without the attendant merger costs, which UBA had prudently decided to absorb in one financial year, the bank’s profits would have been much higher.
It would be recalled that the Group Managing Director and Chief Executive Officer of UBA plc, Tony Elumelu, in his address to stakeholders and the community of stockbrokers at the Nigerian Stock Exchange, in July 2006, had proclaimed that the bank was not going to return a profit after tax of less than N12 billion.
With all key performance indicators soaring in three digits compared to the previous year, UBA has become a positive case study of what a merger-driven growth strategy can achieve in a short time frame.
Shareholders are in for a substantial haul, as the bank’s proposal of N1 dividend per share is the highest ever in its history, plus a bonus of 1 share for every 10 shares currently held, all amounting to very significant reward just one year after the historic merger.
UBA’s annual accounts showed that the bank’s deposit base soared 278 percent, from N205 billion in 2005 to N776 billion in 2006. Gross earnings rose by 247 percent, from N26.1 billion in 2005 to N90.47 billion in 2006. Significantly, no Nigerian bank has ever published a deposit base of up to N500billion. Indeed UBA’s deposit base is larger than the total balance sheet of its nearest competitor. This growth in balance sheet footing and deposit liabilities has proven the efficacy of the bank’s post-merger retail growth strategy.
This epoch-making financial result apparently validates UBA’s innovative retail product development strategy, supported with several consumer promotions, strategic alliances and other diversification and growth initiatives that have characterized its post-merger play in the last 12 months. The new UBA released a basket of new products in the last year, particularly in the areas of electronic banking, cards, funds transfer, liabilities and consumer lending.
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