Phillips Oduoza,
Group Managing Director and Chief Executive Officer (GMD/CEO) of United Bank
for Africa Plc (UBA) says the outlook for the bank in 2014 is very positive as
he outlined some of the initiatives that have been put in place to meet the
bank’s 2014 targets in an interactive discussion with media executives.
Group Managing Director and Chief Executive Officer (GMD/CEO) of United Bank
for Africa Plc (UBA) says the outlook for the bank in 2014 is very positive as
he outlined some of the initiatives that have been put in place to meet the
bank’s 2014 targets in an interactive discussion with media executives.
“The future of the
bank is very bright. UBA has continued to grow very strong in the emerging
sectors of the economy. We have the telecommunications, power, infrastructure,
oil and gas, in the upstream sector. In fact, there is no big transaction you
can talk of today that the UBA is not participating in. Mention any of the big
ticket transactions, UBA is there. So the brand remains very strong.” Oduoza
said.
bank is very bright. UBA has continued to grow very strong in the emerging
sectors of the economy. We have the telecommunications, power, infrastructure,
oil and gas, in the upstream sector. In fact, there is no big transaction you
can talk of today that the UBA is not participating in. Mention any of the big
ticket transactions, UBA is there. So the brand remains very strong.” Oduoza
said.
He also listed
three strategies deployed by the bank to overcome the difficult operating
environment in 2013 brought about by regulatory changes.
three strategies deployed by the bank to overcome the difficult operating
environment in 2013 brought about by regulatory changes.
“Our African
operations came into play. UBA operates
in 18 African countries outside Nigeria, so we intensified our activities in
these countries. The income losses that we suffered in Nigeria, we try to make
from our 18 African countries where our subsidiaries operate. So, the first
strategy was to increase revenue from the various African countries. “
operations came into play. UBA operates
in 18 African countries outside Nigeria, so we intensified our activities in
these countries. The income losses that we suffered in Nigeria, we try to make
from our 18 African countries where our subsidiaries operate. So, the first
strategy was to increase revenue from the various African countries. “
“The second
strategy was to start ramping up on our electronic banking services. Serving
customers through electronic banking, is just a fraction of what it actually
cost you to serve the customers through the banking hall. So, increased
electronic banking did two things for us, significant reduction in our
operating cost and an increase in the income level. “
strategy was to start ramping up on our electronic banking services. Serving
customers through electronic banking, is just a fraction of what it actually
cost you to serve the customers through the banking hall. So, increased
electronic banking did two things for us, significant reduction in our
operating cost and an increase in the income level. “
“Our third strategy
was a shift that we made from investment in government securities, in treasury
bills, and related instruments, into quality asset creation. Our risk asset
portfolio last year increased significantly as you are going to see when we
release our 2013 full year results. These
were some of the strategies we adopted to cushion the impact of the crunch that
we experienced last year.”
was a shift that we made from investment in government securities, in treasury
bills, and related instruments, into quality asset creation. Our risk asset
portfolio last year increased significantly as you are going to see when we
release our 2013 full year results. These
were some of the strategies we adopted to cushion the impact of the crunch that
we experienced last year.”
Despite the tough
operating environment, Oduoza noted that the bank’s cost-to-income ratio has
been improving.
operating environment, Oduoza noted that the bank’s cost-to-income ratio has
been improving.
“Cost-to-income ratio
has been coming down. Don’t forget that in 2012, we closed with cost-to-income
ratio of 78 percent. First quarter of 2013, we came down to 65 percent and in
the second quarter, it had come down to 62 percent and it has continued to
reduce. Our ultimate objective is to come to the 50s. It’s going to happen,
very soon.”
has been coming down. Don’t forget that in 2012, we closed with cost-to-income
ratio of 78 percent. First quarter of 2013, we came down to 65 percent and in
the second quarter, it had come down to 62 percent and it has continued to
reduce. Our ultimate objective is to come to the 50s. It’s going to happen,
very soon.”
GMD also explained
while comparing the profitability of its African operations that “Nigeria is
still a very dominant market. The Nigerian market is very huge, when you
compare it with other markets, with the exception of South Africa, Nigeria is
the second largest. Our Nigerian
operations commands close to 75 percent of total revenue, with other African
countries contributing about 25 percent. But going into the future, other
African countries will continue to increase the proportion of their
contributions and the ultimate objective is to achieve a 50-50 between Nigeria
and the various African countries.”
while comparing the profitability of its African operations that “Nigeria is
still a very dominant market. The Nigerian market is very huge, when you
compare it with other markets, with the exception of South Africa, Nigeria is
the second largest. Our Nigerian
operations commands close to 75 percent of total revenue, with other African
countries contributing about 25 percent. But going into the future, other
African countries will continue to increase the proportion of their
contributions and the ultimate objective is to achieve a 50-50 between Nigeria
and the various African countries.”
He explained the
UBA’s active participation in the power reforms carried out by the Nigerian
government noting that “The power reform is going to be a revolution just as we
have experienced in the telecommunications industry. The overall impact on the
economy is going to be very significant with a multiplier effect on the
economy. For us, as a bank, our support to the power sector is long term
financing that will provide a steady cash flow and income for the period of
that funding. Some of those funding are for seven years, others are for five
years or thereabout. So, over that period, the bank will continue to enjoy that
revenue.”
UBA’s active participation in the power reforms carried out by the Nigerian
government noting that “The power reform is going to be a revolution just as we
have experienced in the telecommunications industry. The overall impact on the
economy is going to be very significant with a multiplier effect on the
economy. For us, as a bank, our support to the power sector is long term
financing that will provide a steady cash flow and income for the period of
that funding. Some of those funding are for seven years, others are for five
years or thereabout. So, over that period, the bank will continue to enjoy that
revenue.”
He assured the bank’s
customers that the bank has a robust online security platform to deter
fraudsters. “We have invested significantly in security operations. We have
built a state of the art security centre. We partnered with one of the best
security companies in the world. The
security centre protects our customers against online fraud. We call it Security Operations Centre (SOC). It
is a battle in which we have to remain ahead of the fraudsters because they
come up with various attempts every day.”
customers that the bank has a robust online security platform to deter
fraudsters. “We have invested significantly in security operations. We have
built a state of the art security centre. We partnered with one of the best
security companies in the world. The
security centre protects our customers against online fraud. We call it Security Operations Centre (SOC). It
is a battle in which we have to remain ahead of the fraudsters because they
come up with various attempts every day.”
He expressed
optimism that investors will soon recognize the progress being made by the bank
and appropriately price it into the bank’s share price.
optimism that investors will soon recognize the progress being made by the bank
and appropriately price it into the bank’s share price.
“I believe that an
upward review of the bank’s rating is going to take place. Our current pricing
is based on people’s memory not on our performance and prospects. There is
definitely going to an upward movement in our share price because our current
performance shows that we are a bank to invest in.”
upward review of the bank’s rating is going to take place. Our current pricing
is based on people’s memory not on our performance and prospects. There is
definitely going to an upward movement in our share price because our current
performance shows that we are a bank to invest in.”
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