Business
UBA: Outperforming
United Bank for Africa (UBA) Plc is on the top list of companies with well-rounded performance. UBA’s top-of-the-chart performance at the stock market combines with considerable growth in all key fundamental indicators to make the bank the best performing banking stock in recent period. Capital Market Editor Taofik Salako, in this report, reviews the interplay of fundamental earnings and share price appreciation
United Bank for Africa (UBA) Plc outperformed all banking stocks in the first quarter of 2017 with a share price appreciation of 28.22 per cent. It had recorded the second highest price gain of 33.1 per cent in 2016, just slightly under three points behind Guaranty Trust Bank (GTB), which led the sector with 35.9 per cent.
Altogether, UBA’s share price had grown by more than 60 per cent in the past 15 months, the highest by any bank and one of the few bright spots in the long-running depression at the stock market. Average return at the Nigerian Stock Exchange (NSE) in the first quarter of 2017 was negative at -5.05 per cent.
The NSE Banking Index was down by 0.03 per cent while the NSE 30 Index, which tracks large-cap stocks, was almost on the average with a three-month return of -4.93 per cent. In 2016, the stock market had recorded a full-year average return of -6.17 per cent, equivalent to net capital loss of N604 billion.
Only 19 companies, including three banks, recorded a capital gain of 20 per cent and above in 2016, underlining the general downtrend that marked price changes during the period. A long-running depression had seen quoted equities losing N4 trillion in the past three years, including N1.75 trillion and N1.63 trillion in 2014 and 2015 respectively.
UBA’s share price appears to be riding on the crest of positive analysts’ reviews. There is almost analysts’ consensus on the attractiveness of the UBA. Investment research and rating firms such as Renaissance Capital, CSL Stockbrokers, Fitch and Augusto among others had maintained that UBA has strong fundamentals to support substantial price appreciation. UBA Group’s audited report and accounts for the year ended December 31, 2016 supported the positive view of its earnings potential, in spite of the Nigerian economic recession.
Improving earnings
Key extracts of the Group’s audited report showed impressive growths in the top-line and the bottom-line as it continued to expand its assets base. Group;s gross earnings rose by 21.9 per cent from N314.84 billion in 2015 to N383.65 billion in 2016. Interest income had grown by 15 per cent from N229.63 billion in 2015 to N263.97 billion.
With 2.9 per cent increase in interest expense from N96.03 billion to N98.77 billion, net interest income rose by 23.7 per cent to N165.2 billion in 2016 compared with N133.6 billion in 2015. This underlined the profitability of the group’s core banking business. Group profit before tax grew by 32.4 per cent to N90.64 billion in 2016 as against N68.45 billion in 2015. After taxes, net profit rose by 21.1 per cent from N59.65 billion to N72.26 billion. With these, earnings per share increased from N1.79 in 2015 to N2.04 in 2016.
UBA Group’s balance sheet also emerged stronger with total assets rising by 27.3 per cent from N2.75 trillion in 2015 to N3.5 trillion in 2016. Customers’ deposit rose by 19.7 per cent from N2.08 trillion to N2.49 trillion. Loans and advances recorded above average growth of 44.2 per cent to N1.50 trillion in 2016 as against N1.04 trillion in 2015, underlining the bank’s commitment to economic development. Shareholders’ funds also increased by 33.5 per cent from N325.83 billion in 2015 to N434.85 billion in 2016.
Key underlying ratios showed that the growth in 2016 was driven by improvements in the intrinsic operational performance and management. Net interest margin, which underlines the profitability of the core banking business, improved to 62.6 per cent in 2016 as against 58.2 per cent in 2015. This corroborated the reduction in cost of fund. Pre-tax profit margin, which measures the underlining profitability of the group’s businesses, also improved from 21.7 per cent in 2015 to 23.6 per cent in 2016.
On the back of improved earnings, the bank increased dividend payout to shareholders by 25 per cent, further enhancing the total real return on investment built up significantly by capital appreciation. Shareholders received final dividend payment of N19.9 billion for the 2016 business year, in addition to N7.3 billion interim dividend paid after the audit of its 2016 half-year results. With this, shareholders received a final dividend per share of 55 kobo in addition to interim dividend of 20 kobo, bringing total dividend for the 2016 business year to 75 kobo as against 60 kobo paid for the 2015 business year. A dividend yield of more than 14 per cent further placed UBA within the top yields at the stock market. This surpassed the 13.01 per cent coupon on the two-year tenored Federal Government National Savings Bonds.
Sustained growth
The latest audit report confirmed UBA Group’s steady performance over the years. A five-year medium term review showed that total assets have grown steadily from N2.27 trillion in 2012 to N3.50 trillion in 2016. Net loans and advances more than doubled from N658.9 billion in 2012 to N1.50 trillion in 2016. Customers’ deposits also followed the uptrend, jumping from N1.72 trillion in 2012 to N2.49 trillion in 2016. Shareholders’ funds rose consecutively from N189.11 billion in 2012 to N434.85 billion in 2016. Profit before tax, which stood at N52.01 billion in 2012, had defied recession to rise to N90.64 billion in 2016 while profit after tax rose from N54.77 billion in 2012 to N72.26 billion in 2016.
Most analysts have rated UBA Group high on its fundamentals. “We note improvement in profitability and the bank’s good asset quality. The rating takes into cognizance the weak macroeconomic climate on the banking industry’s asset quality, in which we do not expect UBA to be excluded. Nonetheless, we note positively its diversified geographical reach, which will cushion to an extent the impact of the weak Nigerian economic climate,” Agusto & Co stated in its recent credit rating report.
Nigeria’s foremost local rating agency, Agusto & Co, had upgraded UBA’s rating from “A+” to “Aa-”, with a stable outlook, citing the bank’s improved capitalisation, good liquidity and large pool of stable deposits, strong domestic presence supported by the bank’s extensive branch network and growing alternative banking channels.
Also, Fitch International, one of the foremost global rating agencies, in its latest report affirmed and upgraded its ratings for the bank citing strong earnings and asset quality. Fitch affirmed UBA’s viability rating at “B” as the pan-African banking group continues to sustain its benchmark asset quality and strong profitability amidst industry and macroeconomic challenges. UBA is one of the few banks with strong risk management framework, which has helped kept non-performing loans ratio at a moderate level of 1.74 per cent as at the end of March 2016.
Strength in diversity
Other African subsidiaries contributed about one hird of the group’s profit in 2016, reflecting the increasing market share of the group outside its Nigerian home. UBA operates in 18 other African countries including Ghana, Republic of Benin, Liberia, Cote d’Ivoire, Burkina Faso, Guinea, Senegal, Sierra Leone, Mozambique, Zambia, Uganda, Tanzania, Kenya, Congo DR, Congo Brazzaville, Cameroon, Chad and Gabon. UBA also has presence in United Kingdom, United States and France.
Geographical segment analysis showed the group performance was buoyed by above average growths in its foreign subsidiaries. The other 18 African subsidiaries recorded pre and post tax profit of N31.4 billion and N24.32 billion respectively on total earnings of N121.9 billion in 2016, considerable growths on pre-tax profit of N18.8 billion and post-tax profit of N14.14 billion recorded on total incomes of N67.72 billion in 2015. Other non-African global operations also improved in 2016 with total income of N9.8 billion and pre and post tax profits of N3.4 billion and N3.37 billion respectively. Other non-African global subsidiaries had recorded gross earnings of N6.01 billion and pre and post tax profit of N1.95 billion each in 2015.
Operating segment analysis also showed that the overall performance rested on evenly spread improvements across the key business segments. Corporate banking recorded gross earnings of N116.63 billion, profit before tax of N43.46 billion and profit after tax of N37.69 billion in 2016 compared with N101.07 billion, N29.04 billion and N25.31 billion recorded respectively in 2015. Retail and commercial banking segment, the largest segment, grew top-line to N227.57 billion in 2016 with profits before and after tax of N29.44 billion and N20.05 billion respectively. Total revenue in the segment had stood at N185.19 billion in 2015 with profit before tax of N26.52 billion and profit after tax of N23.11 billion.
Outlook
The board and management of UBA said the banking group is well-positioned for sustainable long-term growth that will continue to ensure commensurate returns to shareholders. Chairman, United Bank for Africa (UBA) Plc, Mr. Tony Elumelu, noted that most African countries were implementing policy measures that should help stimulate inclusive economic growth, ease macro pressures and lower the cost of doing business. According to him, while Africa has experienced a difficult period; the UBA group welcomed 2017 with renewed optimism as it truly believes that “Africa is Rising”.
“Our pan- Africa operations have delivered on the promises we made at the outset of our growth strategy and we are beginning to reap the benefits of one the largest network in Africa. As we navigate the fast changing market place, we are increasingly digitalising our core business, as we explore new markets and means of embracing customers experience, gain increased share of customers’ wallet and offer new services. I am very optimistic that we will sustain the strong growth trajectory, as we continue to gain market share, leveraging our core values of enterprise, excellence and execution,” Elumelu outlined.
Group managing director, United Bank for Africa (UBA) Plc, Mr. Kennedy Uzoka also assured that the bank is optimistic of continuing growth in the years ahead.
“The 2017 outlook remains positive in most of our markets. We are not aware unaware of the macro challenges, competition and constantly changing customer preferences. We will further sweat our unique Pan Africa platform to improve productivity, extract efficiency gains and grow our share of customers’ wallet across all business lines and markets,” Uzoka said.
According to him, as the banking group continues with its customer first philosophy, shareholders can look forward to better performance, especially with the outlook remaining positive in most of the group’s markets.
“We will build on our strong governance culture, zero-tolerance for infractions and transparency in furthering our frontiers of leadership in the African market,” Uzoka said.
NNPCL and Corruption’s Final Throes
By Pius Olasanmi
In the twilight of the Obasanjo administration, when Nigerians were still capable of being outraged, when Turn Around Maintenance (TAM) of refineries was a buzzword that still held some mysticism to bamboozle citizens, during a conversation, a certain man said something profound. The man said, “As a businessman, if I were the owner of these refineries, knowing that they are three decades old, I would take the last money I have, hire bulldozers, raze them to the ground, and obtain loans to build new ones.”
When we pressed him further on why he would engage in such waste, he explained that repairing the refineries is the real waste. He explained that even if the TAM were honestly carried out, a thirty-year-old refinery would never compete favourably with a new one that would integrate contemporary technology. Operating at its best, such a refinery would never be comparatively more efficient. It is therefore pointless to have spent another one naira on the refineries at that point.
A few months later, I had a conversation with a then-lawmaker on an entirely different matter. I mentioned that the National Assembly has failed by not crafting legislation that would criminalise and punish public office holders who foist wrong decisions on the country. The logic: a public office holder need not steal to be punished, wrong decisions should attract penalties for an office holder who opts for the worst of all options when there are less injurious ones.
These established premises speak to the ongoing nauseating efforts at revisionism by those who wrecked the Nigerian National Petroleum Company Limited (NNPCL) and its previous iteration, the Nigerian National Petroleum Corporation (NNPC). Notably, this campaign to rewrite history is traceable to Engineer Mele Kolo Kyari, the disgraced immediate past Chief Executive Officer of NNPCL and his hirelings. They have suffocated the news and the public opinion space with even more lies than they spun while in office.
The Saint Kyari campaign is anchored on convincing Nigerians that the Port Harcourt, Warri and Kaduna Refineries were fully functional when he was booted out of office. So brazen is the campaign that one of its talking heads challenged the group chief executive officer (GCEO), Engr. Bayo Ojulari, to “inform Nigerians categorically what happened to the functioning refineries he inherited from his predecessor, Engr. Mele Kyari.” The effrontery.
We have not forgotten so soon the charade that followed the baffling claim that Nigeria has spent $2.8 billion on the repair of the refineries, while they are not churning out even a single litre of refined product among them. Saint Kyari and his goons played all manner of tricks, all of which embarrassed President Bola Tinubu, who had counted on ticking off the return to productivity of the refineries as part of his achievements, only to realise that he was deceived into celebrating phantoms. Tragic.
Lest we forget, 200 trucks were arranged as props in a well-directed video clip to celebrate the re-streaming of the Port Harcourt Refinery. The disappointment. Nigerians were to learn from several reports that the Port Harcourt refinery was not producing and was instead using old, stored petroleum products to load trucks. Worse still, the Kyari crew was passing off sanction-tainted Russian-sourced crude oil refined in Malta as locally refined products. More insult was piled on the assault on our collective sensibility with the lies that the Port Harcourt Refinery exported semi-finished products. Brazen.
Meanwhile, Kyari and his hirelings called those who pointed out or protested these glaring scams all manner of names. They hid behind industry technicalities and jargon to create the impression that those of us who knew Nigerians were being robbed did not understand what we were saying. The point remains that a $2.8 billion investment can potentially build a refinery with a capacity of around 100,000 barrels per day (bpd). Of course, the actual capacity of such a refinery will depend on various factors, including the complexity of the refinery, the technology used, and the location. That is the amount that Kyari’s regime at the NNPCL took and did not give Nigerians refined products.
Fast forward to Kyari’s sack and the appointment of Engineer Bayo Ojulari, who has demonstrated that things can indeed be done differently. Kyari’s exit was expectedly followed by the Economic and Financial Crimes Commission (EFCC) going after him and his associates. The extent of the theft is better understood against the backdrop of N80 billion being found in the bank account of one of his associates. They went on the run.
Perhaps because the EFCC was biding its time on securing international warrants for the arrests of these characters on the lam, they have become emboldened. They have decided to fight back and rewrite the story of their participation in the greatest fraud against Nigerians. Engineer Ojulari’s renewed mindset, which is entrenching a semblance of the transparency Nigerians demand, became their natural target. The demons that once roamed around the corporation came out with malevolence. They started spinning stories of corruption to tarnish the incumbent who refused to hide their crimes. The objective: bring Ojulari down. But alas, he is winning the war as it stands.
His innocence is proven, and it is glaring that those who want him out are mere charlatans who can no longer ply their corrupt wares because of the impact of the new reforms. Corruption in the NNPCL is in its final throes. The fake news being unleashed against the incumbent leadership is akin to corruption’s last kicks as reforms in the sector strangulate it and its practitioners. The reforms must take place in the NNPCL, whether the industry demons like it or not.
As a parting shot, Kyari and his associates would do well to prepare their defence. In addition to accounting for the $2.8 billion they laundered in the name of repairing the moribund refineries, they must also answer for the poor decision to fix that which is irretrievably broken. Awarding contracts for Turn Around Maintenance of 59-year-old refineries that a right-thinking person had suggested should be demolished almost twenty years ago, when they were only 30 years old, is criminal. Trying to deceive Nigerians that the fake repairs worked is treason.
Olasanmi is a public affairs analyst writing from Lagos.
GRANDIS 5STAR LUXURY APARTMENT & SUITES SET TO REDEFINE LIVING IN VICTORIA ISLAND
Set to Rise elegantly against the Lagos skyline, is the Grandis 5Star Luxury Apartment & Suites. According to Adejuwon Ademola, The General Manager of the Development company, it is more than just a residential building
“it’s a lifestyle statement. Standing 17 floors high in the heart of Victoria Island, this revolutionary masterpiece of modern architecture will offer a panoramic 360° view of Eko Atlantic, Victoria Island, and Ikoyi, transforming every apartment into an exclusive penthouse experience for the world’s most discerning elite.”
Developed by Dumarco Construction Limited, a globally acclaimed company with decades of delivering complex, high-value projects in the highly regulated petroleum, oil, and gas industries, Grandis 5Star brings unmatched international safety standards, uncompromising quality, and timeless elegance into Nigeria’s luxury property market.
> “When you live in Grandis, you’re not just buying a home—you’re investing in peace of mind, world-class safety, and an effortless luxury experience that will remain pristine for decades,” says Adejuwon A. Ademola, General Manager of Dumarco Construction Limited.
The Gold Standard in Safety and Quality
Dumarco’s roots in the oil and gas sector mean the company operates to some of the strictest safety protocols in the world. Every stage—from conceptualization, design, construction, to long-term maintenance—follows internationally accepted procedures and quality assurance measures. Cutting corners is simply not in Dumarco’s vocabulary.
> “In the oil and gas industry, there’s no room for compromise. We’ve brought that same discipline and zero-tolerance for mediocrity into property development,” says Ademola. “That’s why Grandis will be one of the safest and most enduring residential developments in Nigeria.”
To ensure transparency and prevent (project complacency), Dumarco deliberately separates the developer, contractor, and consultant roles, engaging only the most competent professionals in each respective field. Dumarco’s project team includes globally recognized contractors such as Julius Berger, Cappa & D’Alberto, and Elalan, Migliore Construczione & Tecniche (MC&T) and their partners VENCO IMTIAZ CONTRACTING COMPANY (VICC) based in Dubai, UAE, Business Contracting Limited, alongside leading consultants like Morgan Omanitan & Abe, LAMBERT, and James Cubitt.
Grandis – Investments, appreciation, returns and profitability
Our selection process for the location of the project alone was pains-taking and completely thorough scientific process. Top professional companies were employed to conduct a scientific data acquisition and analytical survey of the entire Victoria Island, Ikoyi, Lekki and Eko Atlantic before a project site is selected. Analyzing and acquiring areas developmental charts and trends, studying and gathering historical and present sale prices, rental charge and occupancy rates over a 50 year period from every individual street before the selection of the location of any of our developments especially true for the Grandis Project
He adds,
“Our clients and residents can be rest assured that the location of Grandis has been scientifically proven through all existing data to provide our clients with a 100% occupancy rate, highest developmental location, highest rental income and investment returns. ”
The Grandis Experience
Located minutes away from international corporate headquarters, embassies, and landmarks such as Eko Hotel, Radisson Blu, and the Radisson Red, Grandis offers unmatched convenience for professionals, diplomats, and high-net-worth individuals. Every residence is designed for both indulgence and efficiency, with high-grade finishes, smart-home systems, and private amenities that ensure seamless living.
From sunrise over the Atlantic to the glittering Lagos night skyline, residents will enjoy uninterrupted luxury, supported by discreet and highly trained staff, advanced security systems, and a design that prioritizes comfort and privacy.
> “We designed Grandis for people who want everything—security, elegance, convenience, and the assurance that their home will look as spectacular in 20 years as it does on day one,” Ademola notes.
A Legacy That Lasts
With its combination of visionary architecture, peerless safety, and meticulous maintenance planning, Grandis is built to remain iconic for generations. Thanks to Dumarco’s meticulous approach, the building’s service charges are expected to remain low while its value and appeal continue to appreciate over time.
In a market often marred by shortcuts and substandard practices, Mr Ademola says
Grandis stands as a beacon of what luxury living should be—safe, spectacular, and built to last.
“Grandis 5Star Luxury Apartment & Suites — Where safety meets sophistication, and every detail is designed for a life well-lived.”
He added
Website -www.dumarcoltd.com
Project website – www.26idowutaylor.com
Email [email protected]
Tel / WhatsApp +234 9077777883
GM – Adejuwon A. Ademola
celebrity radar - gossips
Nationwide Talent, One Broadcaster: Tinubu Picks Pedro, Bello, Din, Mohammed to Lead NTA
Tinubu Overhauls NTA Leadership: Media Powerhouse Rotimi Pedro Takes Helm as DG
President Bola Ahmed Tinubu has announced a major shake-up at the Nigerian Television Authority (NTA), appointing renowned media executive Rotimi Richard Pedro as the new Director-General in a move widely seen as a bold step toward modernising the state broadcaster.
Pedro, a Lagos native, brings nearly 30 years of expertise in broadcasting, sports rights, and marketing communications across Africa, the UK, and the Middle East. A trained entertainment and intellectual property lawyer, he also holds an MSc in Investment Management and Finance from City University Business School, London.
In 1995, Pedro founded Optima Sports Management International (OSMI), which rose to become one of Africa’s leading sports content providers—distributing premium events such as the English Premier League, UEFA Champions League, FIFA World Cup, and CAF competitions to audiences in over 40 countries.
His career highlights include top roles at Bloomberg Television Africa and Rapid Blue Format, as well as advisory work for FIFA, UEFA, Fremantle Media, and the African Union of Broadcasters (AUB). At the AUB, he was instrumental in securing exclusive pan-African free-to-air media rights for all CAF competitions.
Alongside Pedro’s appointment, Tinubu named Karimah Bello from Katsina State as Executive Director of Marketing, Stella Din from Plateau State as Executive Director of News, and Sophia Issa Mohammed from Adamawa State as Managing Director of NTA Enterprises Limited.
Industry insiders credit Pedro with building commercially viable broadcast platforms, driving sponsorship growth, and delivering world-class content to African audiences. His appointment marks one of the most significant leadership changes at NTA in years—signalling the government’s intent to strengthen the broadcaster’s competitiveness in a fast-evolving media landscape.
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