When the Heirs Holdings (HH) inaugurated its “HH Group Directors’ Annual Summit” that convened over 100 HH Group board members earlier in the year, something profound came out of the commentary of Nigeria’s Vice President, Senator Kashim Shettima. The annual summit was held at the Transcorp Hilton Hotel in Abuja from June 13th to 16th, 2024, and it provided an opportunity to reinforce the group’s strong governance practices and identify opportunities for innovation, impact, and celebration of HH’s business achievements.
Although many of the attendees didn’t miss the point and larger context of Nigeria’s second most powerful man’s speech, it is worth explaining yet again because of its bigger implication and far-reaching impact.
At the programme, VP Shettima declared that one name that would stand out in the history of Nigerian and African banking was that of the Group Chairman, Heirs Holdings, Mr. Tony Elumelu, who has carved a niche for himself and engraved his name on the walls of banking and Africa’s entrepreneurship.
“When the history of Nigeria and indeed Africa’s banking history and revolution will be written, one name will stand out – having carved a niche for himself and engraved his name on the walls of banking and Africa’s entrepreneurship,” Shettima said.
“Tony Elumelu has become an enigma, a banking colossus, a power industrialist, and a force that cannot be ignored. He is one of our own who believed in Nigeria and threw his heart into it. He is a Nigerian economist, entrepreneur and indeed a philanthropist, who has given life meaning to millions of Nigerians and Africans.”
Shettima himself isn’t a novice in the banking sector; he was a former businessman and banker, eventually rising to hold several high-ranking executive positions at banks. So he knows his onions.
Tony Elumelu would himself provide clarity to what Shettima saw and put in a different phrasing, underscoring the strong ethical standards and corporate governance culture against which Elumelu’s business initiatives are built.
He said: “Over the past decade, we have inculcated in our business the criticality of strong corporate governance practices. We only invest for the long term, strategically and patiently.
“These twin commitments are fundamental to our success; we are indeed building to last, redefining success in every sector we operate in, and demonstrating our purpose to improve lives and transform Africa.”
While Elumelu’s comment might be made in the immediate context of Heir’s Holdings giant strides, it is as fitting a narrative for the foundation upon which the United Bank for Africa (UBA) was built, underscoring the principles and strong corporate governance ethos with which it now operates.
It is therefore no surprise that the bank (which Elumelu served as its CEO for ten years) and its subsidiaries are pushing the frontier of growth across the African continent, providing financial services with a distinct touch of excellence.
UBA’s Giant Strides
In May, Africa’s Global Bank, UBA, released its financial results for the first quarter ended March 31st, 2024, showing very strong growth across key performance measures.
The Group’s results saw outstanding year-on-year increases in Gross Earnings (rose by 110%, from N271.1billion to N570.2 billion); Interest Income (grew by 130%, to N440.7 billion); Operating Income (increased by 115%, from N175.7 billion in 2023, to N378.59 billion).
Further consolidating the record performance delivered in the Group’s 2023 Full Year Financials, UBA again saw Profit Before Tax rising significantly by 155% from N61.7 billion in Q1 2023, to N156.34 billion in Q1 2024; while Profit After Tax jumped from N53.5 billion to N142.5 billion, an impressive rise of 165% year-on-year.
The Group Managing Director, Oliver Alawuba, said the Group delivered strong first quarter performance, building on the solid momentum of 2023, as well as the ongoing execution of its long-held strategy of customer focus, geographic diversification and effective risk management and governance.
“Our record Q1 profit before tax was delivered with triple digit gross earnings growth, supported by very strong interest and non-interest income. Fees and Commissions rose by 118% year-on-year on the back of improved efficiencies and continued digital adoption. This has helped drive improvement in efficiency and customer satisfaction, with the Group’s cost-to-income ratio held at 57.8%,” he said.
Strong subsidiaries; Continental Inroads
Meanwhile, the bank’s expansion bet across Africa, Europe, the Middle East, and America is paying off as its subsidiaries reported a near six-fold jump in revenues in six years.
Revenues from UBA’s Africa (excluding Nigeria) and the rest of the world operations climbed to N928.6 billion in 2023 from only N163 billion in 2017, marking a 469.7 percent surge.
In the same vein, after-tax profit from the bank’s subsidiaries around the world rose 543.5 percent to N251 billion in 2023 from N39 billion six years ago. The lender declared a total profit of N607.6 billion in 2023, with subsidiaries playing a key role and contributing 41.4 percent.
UBA operates in 19 other African countries as well as the UK, the UAE, the USA, and Paris, France.
Repositioning
Meanwhile, with an excess of N2 trillion shareholders fund, the bank plans to raise fresh capital in line with the Central Bank of Nigeria new directives on recapitalisation.
The pan-Africa bank closed 2023 financial year with N2.03trillion shareholders fund, up from N922.1 billion reported in 2022. Share capital and share premium remained flat at N17.1billion and N98.71 billion in 2023, respectively, while retained earnings closed at N919.87 billion, a growth of 1114.2per cent from N429.53 billion reported in 2022.
“UBA will sustain its focus on the ‘Customer’, with unique value propositions in line with the ideals of our “Customer First” (C1st) Philosophy,” said Alawuba.
“We will also continue to leverage our diversified global operations and actively manage our balance sheet in response to rapidly changing macroeconomic conditions across our various markets.”
In March, the Central Bank of Nigeria (CBN) announced an upward review of the minimum capital requirements for commercial, merchant and non-interest banks.
The CBN said the increase was necessary due to prevailing macroeconomic challenges and headwinds occasioned by external and domestic shocks and the upward review will enhance their resilience, solvency and capacity to continue to support the growth of the Nigerian economy.
Nigerian banks have since begun to source for fresh capital ahead of the CBN deadline,
Given its sound corporate governance culture (as referenced by VP Shettima), sound balance sheet, thriving businesses, profitable subsidiaries, and all-round culture of excellence, all eyes seem to be on UBA.
