New Telegraph

UBA: Resilient stock symbol amid sell-pressure

Even though market pressure has recently continued to impact negatively on a number of stocks including those of banks, some of the lenders, including United Bank for Africa have remained resilient. RHODA OGUNSEYE writes

 

The persistent bearishrun being witnessed in most stocks listed on the Nigerian Exchange Limited (NGX) has seen some shares dropping below their value.

 

However, one stock that is standing up to the challenge of sell-pressure and profit taking is United Bank for Africa (UBA) Plc, dropping by 6.4 per cent in the last one month.

 

The share price, which stood at N7.50 kobo per share as at July 13, 2022, slipped to N7.05 on Friday August 12, 2022. Shareholders of UBA lost N170.9 million as the company’s market capitalisation closed N239.39 billion on Friday on the NGX.

Background

The slip, however, does not impact much on the strength of the bank, which is a leading pan-African financial services group with presence in 20 African countries, France, UK, and US.

 

The company offers banking, pension fund custody among other financial services to customers in retail, commercial, and corporate segments of the African market.

Financials

UBA Plc, in its first quarter report ended March 31, 2022, recorded growth across major income lines. The bank’s result, which was released to the Nigerian Stock Exchange, showed that gross earnings rose by 18.3 per cent from N155.4 billion in 2021 to N183.9 billion; while operating income, which stood at N106.6 billion as at March 2021, grew by 18per cent to N125.9 billion in the year under review.

 

The results revealed that the bank’s total assets also rose by 4.1 per cent to N8.9 trillion in the period under review, compared to N8.5 trillion recorded at the end of the 2021 financial year, while shareholders’ funds grew by 2.6 per cent to N825.7billion from N804.8 billion in the same period.

 

Leveraging growth in both interest and non-interest income, the bank’s profit before tax rose to N44.5 billion as at March 2022, up from N40.6 billion a year earlier, while profit after tax stood at N41.5 billion.

 

As always, UBA sustained its strong profitability, recording an annualised 20.4 per cent Return on Average Equity (RoAE). UBA’s Group Managing Director/ Chief Executive Officer, Mr Kennedy Uzoka, explained that despite the myriad of economic challenges on the global space, which shaped the first three months of the year, the bank’s business model continued to show resilience.

 

These challenges, among others, he noted, included the ongoing crisis between Russia and Ukraine that has resulted in a huge supply shock, pushing up commodity prices; and the hike in the interest rates in most advanced countries aimed at tackling spiralling inflation, sparking capital flow reversal from emerging and frontier markets.

 

Eurobond The bank, in June this year, redeemed its $500 million five-year Eurobond notes, with a maturity date of June 8, 2022. Issued in 2017, the five-year bond was offered at a coupon rate of 7.75 per cent. As part of UBA’s liability management strategies, in November 2021, the Group repurchased $310.9 million of the notes through a cash tender offer.

 

Upon maturity, the outstanding portion of $189.1 million and the coupon of $7.3 million were paid. “The Group’s selective participation in international debt markets is a testament to UBA’s robust and prudent liquidity management strategies, coupled with a very strong and diversified asset and liability management process,” said Kennedy Uzoka, GMD/CEO of UBA.

 

“Our significant customer base, diversified geographical spread and multiple decades of proven track record, continue to ensure that UBA is the preferred destination for investors, individuals, and businesses alike,” Uzoka added.

 

With presence in 20 African countries, including Nigeria, as well as operations in France, the UK and being the only sub-Saharan African bank with a deposittaking licence in the USA, UBA  is a leading African financial institution providing banking and financial services to over 33 million customers across the globe.

 

Dividend UBA Plc announced a final dividend of N0.80 for every ordinary share of 50 kobo, translating to a payout of N27.359 billion. The bank said in a note to the Nigerian Exchange Limited that the dividend, “subject to applicable withholding tax, will be paid to shareholders whose names appear in the register of members at the close of business on Friday, March 18, 2022.”

 

The register of members will be closed on March 21 to enable the registrar prepare for payment of the final dividend on April 7. The dividend will be paid to shareholders who have completed the e-dividend registration and mandated the registrar to pay their dividend directly into their bank accounts.

 

It advised shareholders who are yet to complete the e-dividend registration to download the registrar’s e-dividend mandate form. It also advised shareholders to update the records with the registrar as may be required. “The Shareholder Data Form  is also available on the Registrar’s website.

 

Duly completed forms should be returned to the Registrar or any Branch,” it said. “Shareholders with dividend warants and share certificates that have remained unclaimed or are yet to be presented for payment or returned for validation as advised to complete the dividend registration or contact the Registrar,” it added.

 

Change of guard UBA Plc, early this month, announced Oliver Alawuba as its new Managing Director/CEO. He takes over from Kennedy Uzoka whose two-term tenure ends this month.

 

The decision was concluded and approved at the last board meeting of the bank held in Dubai. Alawuba is the current Deputy Managing Director of UBA. The current General Manager of Corporate banking of UBA, Muyiwa Akinyemi, is also expected to be announced as the Deputy Managing Director of the bank.

 

Meanwhile, Kennedy Uzoka will assume the position of Managing Director of a new holding structure that will be introduced by the bank. He will oversee the operations of UBA Group which includes several other subsidiaries across Africa, the U.S., Europe and the Middle East.

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