Africa’s Global Bank, United Bank for Africa (UBA) Plc is set to boost its subsidiaries’ revenue as the Tier-I bank inaugurates its branch in Dubai, the United Arab Emirates (UAE).
The Nigerian tier-1 bank is extending its operations to the oil-rich Middle East country with the official launch of its new branch at the Dubai International Financial Centre (DIFC) in Dubai.The move by the bank marks its presence in 24 countries globally and on four continents.
Applauding the expansion of its footprint to the United Arab Emirates, the bank said it hopes to serve its teeming customers across the Middle East as it officially becomes the first Pan African bank to establish a branch in Dubai directly from Nigeria.
“The birth of @UBADubai is in line with our vision: Global in outlook and competence, African by heart and knowledge, and a bridge to the world economy. Over the years, the Gulf, especially the UAE have become an important hub for global trade & also a trade gateway for Africa.
“@UBADubai will serve our customers across the Middle East with a core focus on correspondent banking, trade & Treasury, whilst harnessing the opportunities the region has to offer to unlock our untapped economic potential and support our continent’s development,” the bank tweeted.
Speaking on the unveiling of the new branch, the Group Chairman, United Bank for Africa, Tony Elumelu, said that what started as an ambitious dream is today a reality as the bank has expanded its operations beyond Africa, the United States, and Europe to the United Arab Emirates.
He tweeted, “Dubai’s strategic position as a thriving global trade hub at the intersection of Asia, Europe and Africa makes it an ideal market for our 35 millionplus customers to leverage their businesses and boost their global footprint.”
Subsidiaries of UBA – the offshore operating segments of Africa’s Global Bank – collectively generated over N1trillion revenue in five years (2017-2021), data from the bank’s annual reports have shown. The result, which reflected a continued trend in the upward performance trajectory, revealed that the bank hauled N976.63 billion revenue in its African operating segments, except Nigeria, while N88.32 billion was earned from offshore locations in the rest of the world. This brings the subsidiaries’ total revenue haul to N1.1 trillion in the 5-year period.
Cumulatively, the subsidiaries’ component accounts for 38.8 percent of the lender’s overall N2.8 trillion revenue for the review period. Further analysis of the data gleaned from the annual reports of the financial services firm showed that the subsidiaries’ total revenue rose from N163.35 billion in 2017 to N300 billion in 2021, reflecting a 55 percent growth.
Specifically, in 2017, the subsidiaries recorded a total revenue of N163.34 billion which rose to N166.15 billion or 1.73 percent in 2018; it climbed further to N184 billion reflecting a 10.74 percent rise in 2019.
Notwithstanding the COVID-19 challenges, the subsidiaries’ total revenue grew 36.85 percent to N251.8 billion in 2020 against the N184 billion of 2019. For the 2021 financial year, the segments pooled a total revenue of N300 billion which represents a 20 percent jump from what was achieved in the preceding year.
On the Profit side, the subsidiaries’ total Profit Before Tax (PBT) which recorded a mere N54 billion in 2017, shot up to N105.4 billion in 2021, representing 95 percent growth. Trending on the same growth trajectory, total Profit After Tax (PAT) for 2021 was N75.35 billion as against N40 billion in 2017 reflecting a growth of 88.25 percent. Furthermore, the total PAT of N266.5 billion generated by the subsidiaries during the 5-year period was 54.34 percent of total N473 billion for the period.
The bank’s Loans and Advances, a critical component of the balance sheet, recorded a tremendous growth both in 2021 FY and the 5-year review period. For the first time, the lender’s Total Assets crossed the 8 trillion mark to hit N8.54 trillion in 2021 against N7.7 trillion in the preceding year, representing 11 percent increase. For the 5-year period, UBA’s Total Assets rose from N4.1 trillion in 2017 to N8.54 trillion in 2021 – a significant growth of 108.3 percent.
Commenting on which factor contributed more to the impressive performance of the subsidiaries – quality of the bank’s corporate governance, or the operating environment, Mr Sam Ndata, Chief Dealer/COO at Hedge Securities and Investment Co. Ltd, attributed the results more to the overall corporate governance which cascades through its hierarchy.
“If the subsidiaries are doing well, it means that their parent company is really doing well because the child enjoys the good things coming from the parents,” the Doyen of the Stockbrokers added in a philosophical note.