UNITED BANK FOR AFRICA PLC
Interim Consolidated and Separate Financial
Statements for the Period Ended 30 June 2023
Africa's Global Bank | Tax Identification Number : 01126011-0001 |
Contents
Note | Page | |
i | Directors' Report | 3 |
ii | Complaints and Feedback | 9 |
iii | Corporate Governance Report | 11 |
iv | Report of the Statutory Audit Committee | 19 |
v | Statement Of Directors' Responsibilities In Relation To The Preparation Of | 20 |
Financial Statements For The Period Ended 30 June 2023 | ||
vi | Statement Of Corporate Responsibility For The Financial Statements For The | 21 |
Period Ended June 30, 2023 | ||
vii | Independent Auditor's Report | 22 |
viii | Consolidated and Separate Statements of Comprehensive Income | 29 |
ix | Consolidated and Separate Statements of Financial Position | 30 |
x | Consolidated and Separate Statements of Changes in Equity | 31 |
xi | Consolidated and Separate Statements of Cash Flows | 33 |
Notes to the Financial Statements | 32 | |
1 | General Information | 34 |
2 | Basis of preparation | 34 |
3 | Significant accounting policies | 34 |
3.1 | Basis of measurement | 34 |
3.2 | Functional and presentation currency | 34 |
3.3 | Use of estimates and judgements | 34 |
3.4 | Basis of consolidation | 34 |
3.5 | Foreign currency transactions and balances | 36 |
3.6 | Interest income and interest expense | 37 |
3.7 | Fees and commission income and expenses | 37 |
3.8 | Net trading and foreign exchange income | 37 |
3.9 | Dividend income | 37 |
3.10 | Income tax | 38 |
3.11 | Cash and bank balances | 38 |
3.12 | Financial assets at fair value through profit or loss | 38 |
3.13 | Derivative financial instruments | 38 |
3.14 | Property and equipment | 38 |
3.15 | Intangible assets | 39 |
3.16 | Impairment of non-financial assets | 40 |
3.17 | Non Current Assets Held for Sale | 40 |
3.18 | Repossessed collateral | 40 |
3.19 | Deposits and debt securities issued | 40 |
3.20 | Provisions | 41 |
3.21 | Financial guarantee contracts | 41 |
3.22 | Employee benefits | 41 |
3.23 | Share capital and reserves | 42 |
3.24 | Earnings per share | 42 |
3.25 | Fiduciary activities | 42 |
3.26 | Stock of consumables | 42 |
3.27 | Segment reporting | 43 |
3.28 | IFRS 15: Revenue from contracts with customers | 43 |
3.29 | IFRS 9: Financial instruments | 43 |
3.31 | IFRS 16: Leases | 50 |
3.32 | Changes in accounting policies | 50 |
3.33 | Standards and interpretations issued/amended but not yet effective | 52 |
3.34 | Rounding of amounts | 52 |
4 | Financial risk management | 53 |
5 | Capital | 96 |
6 | Fair value measurement | 97 |
7 | Offsetting of financial instruments | 105 |
Note | Page | |
8 | Critical accounting estimates and judgements | 106 |
9 | Operating segments | 108 |
10 | Interest income | 111 |
11 | Interest expense | 111 |
12 | Impairment charge for credit losses on financial assets | 111 |
13 | Fees and commission income | 112 |
14 | Fees and commission expense | 112 |
15 | Net trading and foreign exchange income | 112 |
16 | Other operating income | 112 |
17 | Employee benefit expenses | 112 |
18 | Depreciation and amortisation | 113 |
19 | Other operating expenses | 113 |
20 | Income tax | 114 |
21 | Earnings per share | 115 |
22 | Cash and bank balances | 115 |
23 | Financial assets at fair value through profit or loss | 115 |
24 | Asset under management | 115 |
25 | Loans and advances to banks | 116 |
26 | Loans and advances to customers | 116 |
27 | Investment securities | 120 |
28 | Other assets | 121 |
29 | Investment in equity-accounted investee | 121 |
30 | Investment in subsidiaries | 122 |
31 | Property and equipment | 126 |
32 | Intangible assets | 128 |
33 | Deferred tax assets and liabilities | 132 |
34 | Derivative financial instruments | 133 |
35 | Non current assets held for sale | 134 |
36 | Deposits from banks | 135 |
37 | Deposits from customers | 135 |
38 | Other liabilities | 135 |
39 | Borrowings | 136 |
40 | Statement of cash flow reconciliation | 139 |
41 | Capital and reserves | 141 |
42 | Dividends | 142 |
43 | Contingencies | 142 |
44 | Related Parties & Insider Related Credits | 143 |
45 | Compensation to employees and directors | 146 |
46 | Non-audit services | 147 |
47 | Compliance with banking regulations | 147 |
48 | Events After Reporting Date | 147 |
49 | Securities Trading Policy | 147 |
50 | Free Float Declaration | 147 |
51 | Condensed results of consolidated subsidiaries | 148 |
Other national disclosures: | 153 | |
Value Added Statement | 154 | |
Five-year financial summary | 155 |
DIRECTORS' REPORT
The Directors present their report together with the audited financial statements of UBA Plc ("the Bank") and its Subsidiaries (together "the Group") for the period ended 30 June 2023.
1 Results at a Glance
Group | Bank | |||||
Jun-23 | Jun-22 | Jun-23 | Jun-22 | |||
(N'Million) | (N'Million) | (N'Million) | (N'Million) | |||
Profit before tax | 403,647 | 85,750 | 344,185 | 42,823 | ||
Income tax expense | (25,412) | (15,415) | (6,803) | (1,393) | ||
Profit after tax | 378,235 | 70,335 | 337,382 | 41,430 | ||
Profit Attributable to: | ||||||
Equity holders of the Bank | 374,365 | 67,687 | 337,382 | 41,430 | ||
Non-controlling interests | 3,870 | 2,648 | - | - | ||
Earnings Per Share: | ||||||
Basic & Diluted | 10.95 | 1.98 | 9.87 | 1.21 | ||
- Dividend
The Directors, pursuant to the powers vested in it by the provisions of Section 379 of the Companies and Allied Matters Act (CAMA) of Nigeria, propose an interim dividend of N0.50 per share (30 June 2022: N0.20 per share) from the retained earnings account as at 30 June 2023. This proposed interim dividend amounting to a pay-out ratio of 7.3% (30 June 2022: 2.9%), and a yield of 3.65%. - Legal form
United Bank for Africa Plc was incorporated in Nigeria as a limited liability company on 23 February 1961, under the Companies Ordinance [Cap 37] 1922. It took over the assets and liabilities of the British and French Bank Limited, which had carried on banking business in Nigeria since 1949. UBA merged with Standard Trust Bank Plc on 01 August, 2005 and acquired Continental Trust Bank Limited on 31 December, 2005. - Major activities & business review
UBA Plc is engaged in the business of banking and caters for the banking needs of Institutions, Corporate, Commercial and Consumer customer segments, providing trade services, remittance, treasury management, custody/investor services, digital and general banking services. Pension custody services are offered through its subsidiary.
A comprehensive review of the business for the period and the prospects for the ensuing year is contained in the CEO's report section of UBA's most recent annual report. - Directors
NAME | DESIGNATION | |||||
Mr. Tony Elumelu, CFR | Chairman | |||||
Mrs. Owanari Duke | Independent Non-Executive Director | |||||
Ms. Angela Aneke | Independent Non-Executive Director | |||||
Erelu Angela Adebayo | Non-Executive Director | |||||
Dr. Kayode Fasola | Non-Executive Director | |||||
Mr. Abdulqadir J. Bello | Non-Executive Director | |||||
Ms. Aisha Hassan Baba, OON | Independent Non-Executive Director | |||||
Mrs. Caroline Anyanwu | Non-Executive Director | |||||
Mr. Oliver Alawuba | Group Managing | Director/CEO | ||||
Mr. Muyiwa Akinyemi | Deputy Managing | Director | ||||
Ms Emem Usoro | Executive Director, North Bank | |||||
Ms Sola Yomi-Ajayi | Executive Director, International Banking | |||||
Mr. Ugochukwu Nwaghodoh | Executive Director, Finance and Risk Management | |||||
Mr. Alex Alozie | Executive Director, Group Chief Operating Officer | |||||
Mrs. Abiola Bawuah (1) | Executive Direct | or/CEO, UBA Africa | ||||
(1) Appointed to the Board on January 3, 2023 |
3
Directors' Report - Continued
6 Directors' interests
The interest of directors in the Issued share capital of the Bank as recorded in the register of directors' shareholding and/or as notified by the directors for the purpose of Sections 275 and 276 of the Companies and Allied Matters Act and the listing requirements of the Nigerian Stock Exchange is as follows:
30-Jun-23
31-Dec-22
Name | Direct holding | Indirect holding | Direct holding | Indirect holding |
Mr. Tony Elumelu, CFR | 194,669,555 | 2,332,702,730 | 194,669,555 | 2,185,934,184 |
Mrs. Owanari Duke | 86,062 | - | 86,062 | - |
Ms. Angela Aneke | - | - | - | - |
Erelu Angela Adebayo | 163,803 | - | 163,803 | - |
Dr. Kayode Fasola | 100,000 | - | 100,000 | - |
Mr. Abdulqadir J. Bello | 130,000 | - | 130,000 | - |
Mrs. Aisha Hassan Baba, OON | - | - | - | - |
Mrs. Caroline Anyanwu | 1,243,669 | - | 993,669 | - |
Mr. Oliver Alawuba | 14,516,953 | - | 1,593,248 | - |
Mr. Nwaghodoh Ugochukwu Alex | 12,233,004 | 5,399,816 | ||
Mr. Muyiwa Akinyemi | 4,728,245 | 2,728,245 | ||
Ms. Sola Yomi - Ajaiyi | - | - | ||
Mr. Alex Alozie | - | - | ||
Ms. Emem Usoro | 694,125 | 693,550 | ||
Mrs. Abiola Bawuah* | 2,684,781 | 2,684,781 | ||
*Appointed to the Board on January 3, 2023 | ||||
Details of indirect holdings | ||||
Name of Director | Companies | Indirect | ||
Holding | ||||
HH Capital Limited | 287,612,362 | |||
Mr. Tony O. Elumelu, CFR | Heirs Holdings Limited | 1,814,003,900 | ||
Heirs Alliance Limited | 231,086,468 | |||
2,332,702,730 | ||||
7 Analysis of shareholding
The details of shareholding of the Bank as at 30 June, 2023 is as stated below;
Headline | Shareholders | Holdings | ||||
Range | Count | Cumulative | Count (%) | Aggregate | Cumulative | Aggregate |
Count | Holdings | Holdings | Holdings (%) | |||
1 - 1,000 | 33,995 | 33,995 | 12.34 | 15,314,184 | 15,314,184 | 0.04 |
1,001 - 5,000 | 120,380 | 154,375 | 43.69 | 300,609,142 | 315,923,326 | 0.88 |
5,001 - 10,000 | 44,721 | 199,096 | 16.23 | 306,281,997 | 622,205,323 | 0.90 |
10,001 - 50,000 | 53,858 | 252,954 | 19.55 | 1,124,137,785 | 1,746,343,108 | 3.28 |
50,001 - 100,000 | 10,633 | 263,587 | 3.86 | 722,179,256 | 2,468,522,364 | 2.11 |
100,001 - 500,000 | 8,970 | 272,557 | 3.26 | 1,832,027,753 | 4,300,550,117 | 5.36 |
500,001 - 1,000,000 | 1,322 | 273,879 | 0.48 | 933,253,880 | 5,233,803,997 | 2.74 |
1,000,001 - 5,000,000 | 1,223 | 275,102 | 0.44 | 2,406,792,397 | 7,640,596,394 | 7.04 |
5,000,001 - 10,000,000 | 165 | 275,267 | 0.06 | 1,141,218,869 | 8,781,815,263 | 3.04 |
10,000,001 - 50,000,000 | 157 | 275,424 | 0.06 | 3,131,758,039 | 11,913,573,302 | 9.16 |
50,000,001 - 100,000,000 | 33 | 275,457 | 0.01 | 2,224,797,894 | 14,138,371,196 | 6.51 |
100,000,001 - 500,000,000 | 35 | 275,492 | 0.01 | 10,245,978,774 | 24,384,349,970 | 29.96 |
500,000,001 - 1,000,000,000 | 8 | 275,500 | 0.00 | 5,402,129,555 | 29,786,479,525 | 15.80 |
1,000,000,001 and Above | 3 | 275,503 | 0.00 | 4,412,941,841 | 34,199,421,366 | 12.90 |
TOTAL | 275,503 | 100 | 34,199,421,366 | 100 |
4
Directors' Report - Continued | |||||
8 | Substantial interest in shares: shareholding of 5% and above | ||||
According to the Register of Shareholders as at 30 June, 2023, no shareholder held more than 5% of the share capital of | |||||
the Bank except the following; | |||||
Shareholders | Holding | Holding (%) | |||
Heirs Holdings Limited | 1,814,003,900 | 5.30% | |||
9 | Trading in the shares of UBA | ||||
A total of 3.88 billion units of UBA shares were traded on the Nigerian Exchange Limited (NGX) in H1 2023, representing | |||||
11.4% of the shares outstanding. In the first six months of the year 2023, the Nigerian equities market recorded its best | |||||
performance in 16 years. Specifically, the All Share Index (ASI) of the NGX appreciated by 18.96%, with shares of UBA | |||||
closing the period at N12.25. The positive sentiment among investors can be attributed to several factors, including the | |||||
peaceful transition to power following the 2023 elections, market-friendly policies introduced by the new administration | |||||
such as the removal of fuel subsidies, streamlining of exchange rates, and the floating of the naira. | |||||
10 | Acquisition of own shares | ||||
The Bank did not purchase its own shares during the period. Also, the Group has a Board approved Global Personal | |||||
Investment Policy, which covers directors, staff, and related parties. The policy prohibits employees, directors and | |||||
related individuals/companies from insider dealings on the shares of UBA Plc and related parties. The essence of the | |||||
policy is to prevent the abuse of confidential non-public information that may be gained during the execution of UBA's | |||||
business. In addition, the policy serves to ensure compliance with the local laws and/or regulatory requirements. In | |||||
accordance with the NSE Rule Book and Amendments to the Listing Rules, UBA observes closed periods, within which | |||||
affected persons/corporates are restricted from trading on the shares of the Bank. There was no case of violation within | |||||
the period under review. | |||||
11 | Donations | ||||
As a part of our commitment to the development of host communities, the environment and broader economy within | |||||
which we operate, across the Group, a total of N721,000,000.00 | (Seven Hundred and Twenty-One Million Naira only) | ||||
(Bank: N695,000,000.00) was given out as donations and charitable contributions for the period ended 30, June 2023 | |||||
(HY2022: Group-N695mn,Bank-N652mn), through UBA Foundation. | |||||
12 | Management Shared Services Arrangement | ||||
There exist a management shared services arrangement between UBA Plc and its subsidiaries within the UBA Group. | |||||
These shared services are classified under three (3) broad categories: centralised executive management services, intra- | |||||
group support services and information technology (IT) services. These services are in line with the approved services in | |||||
Section 5.1 of CBN guidelines for shared services arrangements for banks and other financial institutions |
The shared services being provided by UBA Plc provides the Group with economic and commercial benefit due to the fact that, given the same circumstances, an independent person in a similar circumstance would be willing to pay for similar services if provided by another independent party or would have performed the activity in-house for itself. The shared services are necessary to achieve the following benefits enjoyed by the Group members during the year:
1. Ensuring uniformity and standardisation of business processes within the Group
2. Achieving cost and operational efficiency
3. Exploiting economies of scale and global corporate efficiency for commonly required services.
The Bank has a Group transfer pricing policy which documents the details of the shared services and the functions performed by the Bank and the regional offices to the subsidiaries, in line with the shared services agreement. The cost of providing these services is allocated proportionately to the relevant beneficiaries using predetermined allocation keys.
5
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United Bank for Africa plc published this content on 12 September 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 12 September 2023 13:31:02 UTC.