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UBA Delivers N153 Billion Profit, Records 11% Balance Sheet Growth

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UBA Delivers N153 Billion Profit, Records 11% Balance Sheet Growth

UBA Delivers N153 Billion Profit, Records 11% Balance Sheet Growth

Olushola Okunlade Writes

Africa’s Global Bank, United Bank for Africa (UBA) Plc, has announced its audited results for the full year ended December 31, 2021, reporting impressive performance in key financial metrics.

The 2021 financial result filed by the bank at the Nigerian Stock Exchange (NSE) on March 4, 2022, showed that gross earnings rose significantly to N660.2 billion representing an increase of 7 percent compared to N616.8 billion recorded at the end of the 2020 financial year.

Total assets grew by 11 percent to an unprecedented N8.5 trillion in the year under review, up from N7.7 trillion in 2020, thus marking the first time the Bank’s assets will cross the N8 trillion mark.

Despite the huge challenging business and slow economic recovery in most of its countries of operations, UBA’s Profit Before Tax was impressive with a 20.3 percent growth to N153.1 billion, compared to N127.3 billion at the end of the 2020 financial year; while Profit After Tax rose grew by 8.7 percent to N118.7 billion in 2021, compared to N109.2 billion recorded the previous year.

Similarly, net loans grew by 7.7 percent growth to N2.8 trillion, whilst customer deposits rose by 12.2 percent to N6.4 trillion, compared to N5.7 trillion in the corresponding period of 2020, reflecting increased customer confidence, enhanced customer experience, successes from the ongoing business transformation program and the deepening of its retail banking franchise.

In the year under consideration, the bank’s operating income rose by 10% to N443 billion compared to N403 billion in the prior year, whereas operating expenses closed the period at N279 billion.

In its usual tradition of rewarding shareholders, the Bank proposed a final dividend of 80kobo for every ordinary share of 50kobo for the financial year ended December 31, 2021. The final dividend which is subject to the affirmation of the shareholders at its Annual General Meeting will bring the total dividend for the year to N1 as the Bank had paid an interim dividend of 20kobo earlier in the year.

Commenting on the result, the Group Managing Director/CEO, Kennedy Uzoka, said that notwithstanding the tight and challenging operating environment, UBA continues to deliver significant performance.

He said, “The year 2021 can best be described as a year of global recovery; economies around the world began to witness early-stage recoveries, as supply chains recover from the devastating disruptions suffered in 2020.

Consequently, UBA recorded remarkable 7% growth in top-line to N660 billion (USD1.56bn), and profit before tax (PBT) of N153.1 billion, up 20.3% from the prior year. Net Loans and advances grew by 7.7% to N2.8 trillion with exposure mostly to resilient economic sectors including oil & gas, agriculture, and manufacturing. Deposit from customers grew 12.2%, crossing the N6 trillion mark, to N6.4trillion.”

The GMD explained that the quality of UBA’s portfolio, as well as the strength of the bank’s credit risk management frameworks and policies, remain the bedrock of the positive results that the bank has been recording over the years, adding that the current performance highlights UBA’s relentless customer focus, and leverage on its key strategic levers – People, Process and Technology.

“Looking forward, I am particularly excited about our ongoing Enterprise Transformation Program which is designed to enhance the bank’s process agility, service delivery, and customer experience. We are also making sizeable investments in cutting-edge technology and cyber security, to keep our innovative digital banking offerings above the curve, as we tool and re-tool our human resources to compete and win in a rapidly changing and evolving landscape. This will ensure the bank continues to achieve respectable top and bottom-line growth through the medium to long term” the GMD stated.

UBA’s Group Chief Financial Official, Ugo Nwaghodoh, who corroborated the GMD’s comments, said, once again, the bank has shown resilience. It achieved sizeable growth and strengthened its balance sheet despite the slow pace of economic recovery that characterized the year 2021.

“Through active and diligent assets and liabilities management, the bank was able to protect its net interest margin and achieved a downward moderation of Cost of funds (CoF) by 70 basis points to 2.2% from 2.9% in the prior year.

According to him, the group’s capital adequacy ratio at 24.9% was well above the required regulatory minimum and reflects a strong capacity for business growth. “The Group’s non-performing loan ratio improved further to 3.6% from 4.7% at the end of 2020. This testifies to the quality of UBA’s loan portfolio even as the bank remains relentless in its resolve to drive down the Cost-to-Income ratio, which stood at 63.0% at the end of the year.”

Nwaghodoh added that the bank achieved further strides in growing its business and gaining market share across its pan-African operations, with the region accounting for 63.2% of the Group’s profitability, compared to 55.4% in 2020; Loans and advances as well as Deposit in the region were also up 14.5% and 27.3% respectively from a year earlier.

In his concluding remarks, the CFO stated “We recognize the changing competitive landscape and are proactively positioning to consistently deliver on our strategic objectives and commitment to shareholders.”

United Bank for Africa Plc is Africa’s global bank, offering banking services to more than twenty-five million customers, across over 1,000 business offices and customer touchpoints in 20 African countries. With a presence in the United States of America, the United Kingdom, and France and more recently the United Arab Emirates, UBA is connecting people and businesses across Africa through retail; commercial and corporate banking; innovative cross-border payments and remittances; trade finance, and ancillary banking services.

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Sterling’s Unify To Digitize Nigerian Higher Education With Africa EDUCare

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Sterling’s Unify To Digitize Nigerian Higher Education with Africa EDUCare

Olushola Okunlade Writes

Sterling Bank Plc, Nigeria’s leading commercial bank, has signed a memorandum of understanding (MoU) with Africa EDUCare, a disruptive innovation educational and healthcare solutions company, to transform higher education in Nigeria with Unify; Sterling’s innovative education management solution. 

The signed MoU is conceived to deploy Unify to transform education and administrative management, and to enable Africa EDUCare realize its dream of floating the Maranatha Institute of Science and Technology (MiST); a NextGen STEAM university with an innovative curriculum focused on Sciences, Technology, Engineering, Agribusiness, and Medicine curriculum.

Speaking at the signing ceremony in Lagos, Mr. Obinna Ukachukwu, Divisional Head for Business Growth and Transaction Banking at Sterling Bank, said education remains and continues to be one of the five critical sectors of Sterling’s focus under our HEART strategy. The other sectors are Health, Agriculture, Renewable Energy, and Transportation.

“We believe that continued investments in these sectors are key to ensuring the nation’s survival, growth, and prosperity beyond this generation,” Ukachukwu said.

Obinna continued by saying that Unify is conceived to transform the administration of education at all levels in Nigeria. He said, “At Sterling, we believe that Nigerian tertiary education needs to be reengineered before it can be empowered to transform industry, and the corporate world, with the kind of adequately skilled manpower required for the desired impact.”

Professor James Makinde, CEO and President of Africa EDUCare, mentioned that the partnership presents great development prospects for Nigeria, saying that “Africa EDUCare proposes to revolutionize education and revitalize the national economy for global impact through tertiary and vocational education that transfers skills that are immediately usable in the marketplace.”

He added that “The strategy for Africa EDUCare is to take learnings from developed and developing economies through the design of impact instruction modules that mirror real-life employability needs, leveraged through technology.”

Sterling’s Unify To Digitize Nigerian Higher Education with Africa EDUCare
LEFT-RIGHT: PARTNER, FUNMI ROBERTS & COMPANY SECRETARIES TO AFRICA EDUCARE, KEMI OLADIPO; TRISTATE HEALTHCARE SYSTEM LTD, PROF. KAMAR ADELEKE; PRESIDENT, AFRICA EDUCARE, PROF. JAMES MAKINDE; DIVISIONAL HEAD, BUSINESS GROWTH & TRANSACTION BANKING, STERLING BANK PLC, OBINNA UKACHUKWU; AND GENERAL MANAGER, CAFE ONE (UNIFY), ADATUGO OYEBANJI, AT THE SIGNING OF MOU CEREMONY BETWEEN STERLING BANK, UNIFY, AND AFRICA EDUCARE IN LAGOS RECENTLY.
In 2019, the Southern Swamp Associated Gas Solutions project was commissioned, and the SPDC JV is planning to reduce associated gas flaring further through its Forcados Yokri gas-gathering project, of which large parts are set to be completed in 2022. Despite such efforts to reduce continuous flaring, unfortunately flaring intensity (the amount of gas flared for every tonne of oil and gas produced) at both SPDC- and SNEPCo-operated facilities increased in 2021 owing to short-term operational issues. Flaring from SPDC-operated facilities increased by around 5% in 2021 compared with 2020. The increase was primarily because of the extended outage of the gas compression system in SPDC’s shallow-water operations. The system was restored and became operational from January 2022. Flaring at SNEPCo-operated facilities rose by around 160% in 2021 compared with 2020. This was mainly because of an increase in flaring on the Bonga floating production, storage and offloading (FPSO) vessel. Repairs to a flex-joint on the Bonga FPSO’s gas export riser in the second quarter took longer than expected, in part because of weather conditions. While repairs were under way, the FPSO continued to produce oil and therefore flaring was necessary for safety reasons. The repairs were safely concluded in July 2021. Although flaring intensity levels rose in 2021, SPDC and SNEPCo over the last 10 years have almost halved the combined amount of hydrocarbons they flare from 1.5 million tonnes in 2012 to 0.8 million tonnes in 2021. This reduction is the result of a strict flaring reduction management process and both SPDC and SNEPCo will continue to work in close collaboration with joint-venture partners and the government to make progress towards ending routine flaring of associated gas. NIGERIA LNG EXPANSION UNDERWAY Global demand for LNG continues to grow as the world increasingly seeks reliable supplies of lowercarbon energy. Shell’s investment in Nigeria’s gas infrastructure for export is expected to help 6 This is according to a data provided by global research and consultancy business Wood Mackenzie. the country benefit further from revenues. Shell Gas B.V. and its partners took a final investment decision in 2020 on a new LNG processing unit – known as Train 7 -- at NLNG. The expansion is expected to create around 12,000 jobs for Nigerians during construction and stimulate growth of the local oil and gas service sector, with 55% of engineering and procurement of goods and services being sourced in-country. Train 7 is expected to ensure Nigeria’s continued place as a global player in a lower-carbon energy source. Once operational, Train 7 will add around 8 million tonnes per annum of capacity to the Bonny Island LNG facility, taking the total production to around 30 million tonnes per annum. In 2021, NLNG began awarding procurement and construction contracts. Early works started at the site. The first phase of the worker village is expected to be ready for occupancy in 2022 and the new material offloading facility ready for use by the end of 2022. NLNG’s Train 7 is expected to come onstream in the middle of the 2020s. KEY LICENCE RENEWED FOR DEEP-WATER SNEPCo has interests in four deep-water blocks in the Gulf of Guinea, two of which it operates. Today, nearly one-third of Nigeria’s deep-water oil and gas production comes from the Bonga and the nonoperated Erha fields.6 Since production began in 2005, Bonga alone has produced more than 950 million barrels of oil with the 2021 average oil production per day at 105,000 barrels. The Bonga FPSO vessel has a total production capacity of 225,000 barrels of oil per day and 150 standard cubic feet of gas export per day. In 2021, the availability of the FPSO vessel increased to 80% from 70% in 2020. In addition to Bonga, SNEPCo’s exploration activities have led to several significant discoveries of oil and gas over the last two decades, including the Bolia and Doro fields (Shell interest 55%). Nigeria Briefing Notes Helping to power Nigeria’s economy 13 In the right investment climate, SNEPCo believes that there are opportunities to expand. In 2021 the OML 118 (Bonga) production sharing contract was renewed and the lease extended for 20 years. Bonga North and Bonga South West Aparo (BSWA) oil fields are two such potential opportunities. Bonga North is a proposed tie-back project to the existing Bonga FPSO with Phase 1 comprising 14 wells. BSWA is a development of a new FPSO with Phase 1 comprising 23 wells. SUPPORTING RENEWABLE ENERGY STARTUPS Millions of Nigerians are excluded from the country’s power grid and Shell Companies in Nigeria have established and provided substantial funding for a not-for-profit, impact-investing company called All On. Operating as an independent company, All On works to bring reliable electricity – often from renewable energy sources -- to off-grid urban and rural customers. This support aims to build a solid pipeline of viable businesses that can create the scale required to address Nigeria’s access to energy gap. In December 2019, SPDC and SNEPCo made a significant additional 10-year financing commitment of $160 million in All On, bringing the total commitment to $200 million. By the end of 2021, All On had provided investment capital to over 40 renewable energy start-ups in its portfolio – an increase of more than 30% from 2020. One such company is Infibranches Technologies Limited, to which All On has committed $2 million, which is expected to enable the indigenous technology company to expand sales of solar home systems via its more than 13,000 agent banking partners across Nigeria. With the support of the Rockefeller Foundation, the All On Hub was established in 2020 to provide nonfinancial support and build the capabilities of off-grid energy entrepreneurs. In 2021, the hub supported 81 ventures – nearly double the 41 supported in 2020. Also in 2021, All On, Odyssey Energy Solutions and the Global Energy Alliance for People and Planet launched a $10 million equipment financing facility as part of the DART pilot programme in Nigeria. 7 Hydraulic flying leads support the delivery of hydraulic fluid and/or chemicals between subsea equipment. 8 Subsea trees are an assembly of valves and other components used to monitor and control the production of a subsea well. DART will combine demand pooling, aggregated purchasing of solar equipment, and access to affordable finance to unlock economies of scale for solar companies, achieve cost savings for end-users, and accelerate the growth of the renewable energy sector in Nigeria and beyond. DEVELOPING LOCAL CONTENT AND SKILLS Shell Companies in Nigeria contribute to the growth of Nigerian businesses that can provide technical and support services to the industry. This includes the manufacture of tools and technical kits, the operation of helicopter flights in the Niger Delta, and strategic partnerships between foreign and local companies to stimulate technology transfer and capacity development. While there are government-required programmes in some areas, such as the Nigerian and Community Content Strategy embedded in the Assa North/Ohaji South gas development project, Shell Companies in Nigeria deliberately seek to contract local businesses wherever possible. In 2021, Shell Companies in Nigeria awarded $800 million worth of contracts to Nigerian-registered companies. Of these, 92% were companies with at least 51% Nigerian ownership. SNEPCo has awarded major engineering and construction contracts to companies that are indigenous, have local staff, or possess domestic capabilities in the country. At present, the manufacture and rebuild of hydraulic flying leads7 (HFLs) is being carried out in-country by wholly indigenous companies. Pressure Controls Systems Nigeria Limited, another Nigerian company, continues to refurbish old subsea trees.8 Sometimes, a lack of access to capital hinders Nigerian companies from competing for and executing contracts effectively. Shell Companies in Nigeria have provided access to nearly $1.6 billion in loans to 901 Nigerian vendors under the Shell Contractor Support Fund since 2012. These loans help improve their tendering opportunities.

Prof. Makinde, also the pioneer Vice-Chancellor of the prestigious Babcock University, concluded by saying that a strategic alliance with an institution of Sterling Bank’s stature and repute will, in the nearest future, transform the education landscape and assist in transforming this vision into reality.

Also present at the signing ceremony were Adatugo Oyebanji, General Manager, Café One (UNIFY), Olufunso Olunaike, Chief Technical Officer, Café One (UNIFY), Prof. Kamar T. Adeleke, President/CEO of Tristate Healthcare System and Executive Vice President, Healthcare for Africa EDUCare.

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Money Market

Sterling Positions For Expansion With New Structure

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Sterling showers Nigerian youths with Top Performing Equities

Olushola Okunlade Writes

With the unanimous support received from its shareholders, Sterling Bank, soon to be known as Sterling Financial Holdings Company, is firmly positioned to expand its financial services footprint from traditional banking and deliver more value to its shareholders.

According to the publicly available filings reviewed from the website of the Nigerian Exchange Limited (NGX), upon final ratification by the regulators, the commercial banking subsidiary of the holding company, Sterling Bank; will continue to operate with its current name as a limited liability company, with shares transferred from the publicly traded company transferred to the newly formed Sterling Financial Holdings Company.

At a recently held court-ordered meeting where the resolution was approved by the bank’s shareholders, the chairman of the bank’s board, Asue Ighodalo, said, “Following the implementation of the scheme, shareholders will exchange their shares in the Bank for shares in HoldCo in the same proportion as their current holdings in the Bank, which will be a regulated entity for CBN purposes.”

The Chairman added that the scheme would provide several benefits to the shareholders of the Bank, some of which include facilitating diversification into other permissible business lines, thereby promoting growth and enhancing shareholder value and facilitation a consolidated financial strength of the group, which will improve access and ability to raise capital.

According to Chief Executive of Sterling Bank, Abubakar Suleiman, the advantages of the newly formed holding company include value creation to maximise earnings through new businesses, agility to optimise for opportunities and adapt to a rapidly changing market, maximise current and future talent potential with opportunities within the group and subsidiaries to nurture and engage its wealth of young and innovative talent.

The holding company also affords Sterling another opportunity to leverage its successful HEART strategy, which has seen the bank make consolidated investments in the Health, Education, Agriculture, Renewable Energy, and Transportation sectors, growing the company’s year-on-year profits to record highs despite strong economic headwinds.

With the adoption of a Holdco structure, Sterling now possesses the latitude to make inroads into other sectors within financial services, such as pensions, asset management, payment services, real estate, and different verticals, along with the current banking licenses held by the commercial and non-interest banking subsidiaries, Sterling Bank and The Alternative Bank. 

In recent times, the bank has doubled down on digitisation with specialised products through the development and introduction of Specta, OneBank, I-invest, Gazelle, and Omni X to fulfill the market’s needs for innovative retail and commercial banking solutions.

A holding company, or Holdco, is a company set up for the purpose of making and managing, for its own account, equity investment in two or more companies, being its subsidiaries, engaged in the provision of financial services, one of which must be a bank.

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Money Market

FirstBank Partners Verve International

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FIRSTBANK UNVEILS A FULLY AUTOMATED SELF SERVICE BRANCH, STRENGTHENS DIGITAL TRANSFORMATION IN NIGERIA

…Makes Customers Millionaires In FirstBank Verve Card Promo

Olushola Okunlade Writes

In partnership with FirstBank – Nigeria’s premier and leading financial inclusion services provider – Verve International, Africa’s leading payment technology and card business, has launched its third National Consumer promo designed to reward users of FirstBank verve card with exciting gifts and cash prizes to appreciate their patronage and use of the card to carry-out their electronic banking transactions.

The ongoing 2-month promo will end on 30 October 2022 as 20 customers (10 customers per month) with the highest transaction count during the promo will be made millionaires, winning the sum of N1 million each. Also, N20,000 will be won by 25 customers monthly.

On the other hand, 2620 FirstBank verve cardholders that double their transactions every week, stand a chance to enjoy 10% cashback capped at N2,000 per customer.

Speaking on the promo Chuma Ezirim, Group Executive, e-Business & Retail Products, FirstBank said “we appreciate our partnership with Verve Card through the years; a partnership of empowerment and opportunities which include growing the economy, supporting new businesses, and preventing unemployment. FirstBank verve card holders are encouraged to keep using their cards as it is a card offering that promotes a safe, convenient, and rewarding digital banking experience with 20 customers standing a chance to be millionaires at the end of the promo.” 

Verve card is a secure debit card that allows cardholders to conveniently meet their daily financial needs such as payment for goods and services, airtime recharge, bill payments, funds transfer, etc. Verve card is accepted across all ATMs, POS, Web, and Mobile Platforms in Nigeria.

The promo is also opened to new verve cardholders as non-verve cardholders are encouraged to visit the nearest FirstBank branch today to pick up a Verve card and start getting rewarded!

Only recently, FirstBank – in partnership with Verve – rewarded over 2601 FirstBank verve cardholders with various prizes; including N20,000 cash prize, N10,000 cash prize, N10,000 worth of airtime; power generating sets, refrigerator, cooking gas, smart TV, and the grand prize of a brand-new car to a lucky winner.

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