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The United Bank for Africa (UBA) has an ambitious vision, one reflected in its slogan of being “Africa’s Global Bank”. The bank’s most recent footprint in Africa was in Mali at the beginning of the year, followed by a formal launch of its United Kingdom subsidiary in February.
As the bank itself noted, it has been intensifying its African footprint with the establishment of UBA Cameroon, UBA Cote d’Ivoire, UBA Uganda, UBA Sierra Leone, and UBA Liberia as well as the acquisition of a 51 per cent interest in Banque Internationale du Burkina Faso, which was the largest bank in the country with 40 per cent market share. Currently, UBA has 18 African subsidiaries, contributing about 20 per cent of the Group’s balance sheet, with a target of contributing 50 per cent.
Currently leading this vision for “Africa’s Global Bank” is Kennedy Uzoka, Group Managing Director/CEO of UBA. He has over two decades of experience covering Core Banking, Corporate Marketing Communications, Strategy, and Business Advisory Services, and is responsible for leading the development and execution of UBA Group’s long-term strategy.
The journey to becoming UBA’s CEO
Since August 1, 2016, Uzoka has held the position of Group Managing Director/Chief Executive Officer; he is also Member of the Executive Management Committee, Executive Director of United Bank for Africa Plc. He started serving as Deputy Managing Director/Deputy Chief Executive Officer, Executive Director of the Company in 2012.
As Group Deputy Managing Director and CEO, UBA Africa, he had the responsibility of managing the Group’s country subsidiaries across 18 countries in Africa, as well as supervising three key strategic support areas in Digital Banking, Information Technology, and Personal Banking.
As Deputy Managing Director, he was the Executive in charge of the Group’s businesses in New York and London.
He is a Member of the Risk Management Committee (as of August 2016), and Member of the Finance and General Purpose Committee of the Company. He was appointed Executive Director and Director of Human Resources of the Company in May 2010, in which role he oversaw Human Capital, Corporate Communication, Company secretariat, Corporate Services, Legal services, UBA Academy, UBA Foundation and UBA Properties.
He was Head, Strategy and Business Transformation of UBA Group and Regional Bank Head, South Bank (covering over seventeen states in Southern part of Nigeria). Before the merger of Standard Trust Bank with UBA Plc in 2005, he was General Manager, North Bank covering all the states in the Northern part of Nigeria including the Federal Capital Territory.
He was also Chief Marketing Officer Federal Capital Territory (FCT), Chief Marketing Officer, Lagos and a Co-Managing Executive Officer with the responsibility to co-manage the entire bank. He is an alumnus of international institutions such as the Harvard Business School in Boston, United States; International Institute of Management Development (IMD) in Lausanne, Switzerland; and the London Business School, United Kingdom. He obtained a Bachelor of Science degree in Mechanical Engineering from the University of Benin and a Masters of Business Administration degree from the University of Lagos.
He is a Board Member of Central Securities Clearing System (CSCS) Limited; Fellow of Chartered Institute of Credit Administration (ICA); Director in Financial Institutions Training Center (FiTC); Registered Professional of Financial Reporting Council of Nigeria; Member of Institute of Directors (IoD).
Performance of UBA under his watch
UBA’s financial performance has been stable, and in a number of indices, improved under Uzoka as the bank’s CEO. At the end of 2016 when Uzoka took charge towards the fourth quarter, the bank’s Profit After Tax (PAT) was N72.3 billion. By full year 2017, PAT increased to N77.5 billion, and sustained this growth at the end of 2018 with N78.6 billion.
Key highlights of the bank’s 2018 results show its gross earnings rose by 7.04 per cent, from N461.6 billion in 2017 to N494 billion. Impairment charges declined largely by 86.2 per cent, from N32.9 billion in 2017 to N4.5 billion in 2018 while net interest income reduced by 0.96 per cent.
Profit Before Tax (PBT) increased slightly by 1.9 per cent, from N104.2 billion in 2017 to N106.8 billion while Profit After Tax (PAT) was marginally up by 0.65 per cent at a record of N78 billion against N77.5 billion in 2017. The bank’s total Asset of N4.869 trillion against N4.069 trillion in 2017 was an increase of 19.67 per cent.
The value of assets changed in a unique way, when in the first quarter of 2019, UBA joined the elite club of banks with total asset above N5 trillion.
Following an FBNQuest research last month, BusinessDay reported that it indicates maintaining its ‘Outperform rating’ on UBA and increase price target by 8 per cent to N13.9 following UBA’s Q1 2019 results which surprised positively relative to forecasts.
“On the back of the upgrades to our forecasts, we now expect the bank to deliver a 2019E return on average equity (ROAE) of 19 per cent, c.100bps higher than management’s 18 per cent guidance for the year,” read the report. It also stated that the bank’s current valuation level (2019 P/B multiple of 0.4x or a 41percent discount to the sector’s 0.7x multiple) looks compelling when compared with peers and justifies a more positive view on the stock.
Following the conclusion of the general elections in Nigeria and the dissipation of associated political risks, the report stated management is more positive on the bank’s loan growth prospects for H2 2019. In addition, the bank’s financial soundness indicators, mainly capital adequacy, loan-to-deposits and liquidity ratios that stand at 24 per cent, 48 per cent and 50 per cent respectively as at the end of Q1 2019 are amongst the best in the sector.
“At current levels, we see an upside potential 107 per cent in the shares,” the report noted.
Looking to the future
Three weeks after the UBA group launched its operations in Mali, the bank repeated the feat in London, the global financial centre where UBA UK was formally launched. This was sequel to the authorization of the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) for UBA UK Limited to carry out full scale wholesale banking across the United Kingdom.
The value of European trade with Africa is quite significant, and has been opened up as a viable market to be explored by UBA. The European Commission reported in 2017, EU imports of goods from Africa (which is mostly driven by primary goods) stood at EUR 131 billion, although they had been as high as EUR 187 billion in 2012. On the other hand, European exports to Africa as at 2017 stood at EUR 149 billion, with 72 per cent of these goods exported from the EU to Africa being manufactured goods.
Even the UK on its own was the 7th highest European exporter of Goods to Africa, with a value of EUR 9.77 billion, and was the 5th European importer of goods from Africa with EUR 14.68 billion, having a trade deficit of EUR 4.9 billion with the continent. The British Office for National Statistics (ONS), in its 2016 report on trade and investment relationship with Africa, also noted that UK’s trade balance with Africa returned to deficit in 2012 following an increase in imports.
Uzoka in an interview during the launch noted that before UBA got to the UK, and with the kind of license it had before, if a business in any of the (African) Anglophone countries was transacting with a partner in England, they had to deal with another bank.
“Today, with our wholesale license, that is now a thing of the past. UBA is interconnecting businesses in Africa with not just United Kingdom but across the world,” he said.
As Uzoka explained, what has been done is to create a UBA one-stop-shop that whether a business is in Ghana, Nairobi, or elsewhere in Africa, by approaching any UBA branch in their countries, transactions will be consummated without going through third parties.
With its increasing international presence (within and outside the African continent), Uzoka says UBA is positioning to service the flow of cash and investments throughout Africa.