Home Banking UBA links improved results to prudent balance sheet mgt, others

UBA links improved results to prudent balance sheet mgt, others


The Group Chief Finance Officer of the United Bank for Africa, Mr. Ugo Nwaghodoh, has linked the bank’s improved performance in the 2017 financial year to prudent balance sheet management, among other operational control measures.

Mr. Ugo Nwaghodoh
Mr. Ugo Nwaghodoh

Nwaghodoh, during a media chat in Lagos, noted that in the year under review the bank recorded a 23 per cent growth in interest income as well as ensured that its cost of funding was controlled significantly.

He explained: “The yield environment was positive and relatively high during the first half of the year. Despite growing our revenue, we also had strong control on our cost of funding. The banking business is intermediation. How efficient you are in the intermediation process is very vital. This borders on how much you bought money and sold money.

“Cost of funding was kept under significant check despite the tight liquidity environment you saw in the second half of the year. We were able to keep our weighted average cost of fund at 3.7 per cent.

“We kept it constant from 2016 in a market where fixed deposit interest rate went as high as 20 per cent. That efficiency in interest income and cost of funding side led to a net interest income growth of about 25 per cent”, Nwaghodoh added.

In a related development, the bank’s Head, Investor Relations, Mr. Abiola Rasaq, hinted that the management had also taken decisive steps to deepen its operations in the United Kingdom and the United States as a strategic option of improving its foreign branches’ contribution to the growth of the bank.

Rasaq said: “We took a decisive step to expand our business in London. We have a subsidiary in London, which is in addition to the New York office. To the best of our knowledge, we are the only Nigerian bank that has a deposit-taking licence in the United States.

“No other bank in Nigeria does that. And we say that proudly because today, we also service the correspondent banking needs of a number of Nigeria banks in the USA because of our deposit-taking licence.

“So what we did was to take our business in the UK a little further by applying to the UK Prudential Regulation Authority, which is more or less like their central bank. We applied to the PRA and invariably to the Financial Conduct Authority of the UK. Just early this year, we were given the authorisation to deepen and expand our business in the UK. We are happy to say that 2018 going forward, you will see more business going through our UK business”, the banker added.

It would be recalled that the group had reported N462 billion gross earnings in the 2017 financial year, representing a 20 per cent growth in overall revenue for the year when compared with the preceding year’s earnings.