UBA SUGGESTS ON STRATEGY TO ATTAIN CBN’S N500BN CAPITAL BASE.
United Bank of Africa Plc (UBA), a leading bank in Nigeria, has indicated a clear strategy to enhance its capital base and ensure compliance with regulatory requirements. Oliver Alawuba, UBA’s Group managing director/chief executive officer, shared this information with the bank’s local and international investors during its 2023 Full Year Investors’ Conference Call after releasing the financial results for the year ended December 31, 2023.
UBA expressed confidence in meeting the new capital base set by the Central Bank of Nigeria. Alawuba stated that UBA remains one of the well-capitalized banks and is actively considering strategies to bolster its capital base and ensure compliance within the regulatory timeframe.
He mentioned, “This strategy might involve options like Rights Issue or Private Placement. We are confident in meeting the CBN’s capital adequacy requirements and will keep investors informed of our progress. UBA is strongly capitalized with shareholders’ funds exceeding N2 trillion, and we will raise the required capital component as directed by the CBN.”
The Central Bank of Nigeria announced new minimum capital requirements for banks in late March, setting the minimum capital base for commercial banks with international authorization at N500 billion.
In the 2023 financial year, UBA saw significant growth in gross earnings, which surged from N853.2 billion to N2.08 trillion, representing a robust 143 percent growth. Total assets also increased notably by 90.22 percent to N20.7 trillion from N10.9 trillion in 2022.
UBA’s profit before tax rose by 277 percent to N757.7 billion from N200.9 billion in 2022, while profit after tax grew by 257 percent from N170.2 billion in 2022 to N607.7 billion.
Addressing the management of Non-Performing Loans (NPLs), Alawuba outlined plans to employ proactive credit monitoring, restructuring strategies for at-risk loans, and increased provisioning coverage. The bank aims to maintain NPLs at 4.5 percent for the full year 2024 to strengthen its ability to support customers and protect shareholders’ value amid a dynamic economic environment.
Ugo Nwaghodo, UBA’s executive director of Finance & Risk Management, expressed confidence in achieving even better performance in the 2024 financial year. With growing investments in technology and IT Security, the bank is poised for business growth.
“The Group is committed to sustainable growth and maintaining strong compliance and risk management practices as we navigate the next phase of growth,” Nwaghodoh emphasized.
United Bank for Africa Plc operates in 20 African countries and has a presence in New York, London, Paris, and Dubai.
Source: Techeconomy
