UNITED BANK FOR AFRICA PLC

Condensed Interim Consolidated Financial Statements

for the period ended 30 September 2023

Africa's Global Bank

Tax Identification Number : 01126011-0001

United Bank for Africa Plc

Condensed Consolidated Statements of Comprehensive Income

Notes

In millions of Nigerian Naira

Interest income

5

Interest income on amortised cost and FVOCI securities

Interest income on FVTPL securities

Interest expense

6

Group

Group

9 months to

3 months to

Sep. 2023

Sep. 2022

Sep. 2023

Sep. 2022

666,291

420,234

237,999

162,873

665,478

416,623

237,788

159,863

813

3,611

211

3,010

(223,209)

(137,721)

(73,030)

(57,822)

Net interest income

443,082

282,513

164,969

105,051

Fees and commission income

7

182,317

138,079

56,383

41,684

Fees and commission expense

8

(68,031)

(55,860)

(20,393)

(19,381)

Net fee and commission income

114,286

82,219

35,990

22,303

Net trading and foreign exchange income

9

450,253

38,409

31,975

29,264

Other operating income

10

10,000

11,256

729

2,110

Total non-interest income

574,539

131,884

68,694

53,677

Operating income

1,017,621

414,397

233,663

158,728

Net impairment charge on loans and receivables

11

(144,616)

(13,587)

9,328

(5,257)

Net operating income after impairment loss on loans and

873,005

400,810

242,991

153,471

receivables

Employee benefit expenses

12

(111,107)

(80,769)

(41,718)

(28,472)

Depreciation and amortisation

13

(22,611)

(18,438)

(6,494)

(5,403)

Other operating expenses

14

(237,196)

(163,421)

(96,335)

(66,852)

Total operating expenses

(370,914)

(262,628)

(144,547)

(100,727)

Share of profit of equity-accounted investee

24

-

311

-

-

Profit before income tax

502,091

138,493

98,444

52,744

Income tax expense

15

(52,795)

(22,451)

(27,383)

(7,036)

Profit for the period

449,296

116,042

71,061

45,708

Other comprehensive income

Items that will be reclassified to income statement:

Exchange differences on translation of foreign operations

276,129

(56,311)

276,126

(20,842)

Fair value changes on investments at fair value through other

comprehensive income(FVOCI):

Net fair value gains/(loss) during the period

19,610

(16,915)

36,525

-

Net amount transferred to the income statement

(2,771)

(551)

(2,220)

-

292,968

(73,777)

310,431

(20,842)

Items that will not be reclassified to the income statement:

Fair value changes on equity investments at FVOCI

144,544

(8,510)

153,054

-

144,544

(8,510)

153,054

-

Other comprehensive income, net of tax

437,512

(82,287)

463,485

(20,842)

Total comprehensive income for the period

886,808

33,755

534,546

24,866

Profit attributable to:

Owners of Parent

442,029

111,903

66,442

44,217

Non-controlling interest

7,267

4,139

4,619

1,491

Profit for the period

449,296

116,042

71,061

45,708

Total comprehensive income attributable to:

Owners of Parent

863,830

33,053

511,223

24,866

Non-controlling interest

22,978

702

23,323

Total comprehensive income for the period

886,808

33,755

534,546

24,866

Basic and diluted earnings per share expressed in Naira

16

12.93

3.27

1.94

1.29

The accompanying notes are an integral part of these condensed consolidated financial statements.

Page 2 of 29

Consolidated Financial Statements for the period ended 30 September, 2023

United Bank for Africa Plc

Consolidated Statements of Financial Position

Notes

Group

As at

Sep. 2023

Dec. 2022

In millions of Nigerian Naira

ASSETS

Cash and bank balances

17

4,039,002

2,553,629

Financial assets at fair value through profit or loss

18

6,308

14,963

Assets under management

19

13,400

12,923

Derivative assets

26

382,342

39,830

Loans and advances to banks

20

126,476

303,249

Loans and advances to customers

21

4,938,651

3,136,879

Investment securities:

- At fair value through other comprehensive income

21

2,825,196

2,193,253

- At amortised cost

21

3,127,600

1,987,438

Other assets

23

480,222

254,704

Property and equipment

219,142

208,039

Intangible assets

35,488

33,468

Deferred tax assets

28,793

23,603

16,222,620

10,761,978

Non-Current Assets Held for Sale

13,375

95,593

TOTAL ASSETS

16,235,995

10,857,571

LIABILITIES

Deposits from banks

27

1,762,462

1,170,238

Deposits from customers

28

11,629,182

7,824,891

Derivative liabilities

26

2,634

79

Other liabilities

29

378,884

383,284

Current income tax liabilities

15

41,811

20,281

Borrowings

30

637,166

535,735

Deferred tax liabilities

5,724

959

TOTAL LIABILITIES

14,457,863

9,935,467

EQUITY

Share capital

17,100

17,100

Share premium

98,715

98,715

Retained earnings

750,812

429,533

Other reserves

857,666

341,949

EQUITY ATTRIBUTABLE TO OWNERS

1,724,293

887,297

OF THE PARENT

Non-controlling interests

53,839

34,807

TOTAL EQUITY

1,778,132

922,104

TOTAL LIABILITIES AND EQUITY

16,235,995

10,857,571

The accompanying notes are an integral part of these condensed consolidated financial statements.

Approved by the board of directors on 27 October, 2023

Ugo A. Nwaghodoh

Oliver Alawuba

ED, Finance & Risk Management

Group Managing Director/CEO

FRC/2012/ICAN/00000000272

FRC/2022/PRO/DIR/003/589226

Tony O. Elumelu , CON

Chairman, Board of Directors

FRC/2013/CIBN/00000002590

Page 3 of 29

Consolidated Financial Statements for the period ended 30 September, 2023

United Bank for Africa Plc

Condensed Consolidated Statements of Changes in Equity

Group

Attributable to equity holders of the parent

In millions of Nigerian Naira

Regulatory

Fair

Non-

Share

Share

Translation

credit risk

value

Statutory

Retained

controlling

Total

Capital

premium

reserve

reserve

reserve

reserve

earnings

Total

interest

equity

For the nine months ended 30 September 2023

At 1 January 2023

17,100

98,715

41,676

52,645

88,680

158,948

429,533

887,297

34,807

922,104

Profit for the period

-

-

-

-

-

-

442,029

442,029

7,267

449,296

Exchange differences on translation of foreign operations

-

-

260,418

-

-

-

-

260,418

15,711

276,129

Fair value change in financial assets classified as FVOCI

-

-

-

-

19,610

-

-

19,610

-

19,610

Fair value change in equity instruments classified as FVOCI

-

-

-

-

144,544

-

-

144,544

144,544

Net amount transferred to income statement

-

-

-

-

(2,771)

-

-

(2,771)

-

(2,771)

Total comprehensive income for the period

-

-

260,418

-

161,383

-

442,029

863,830

22,978

886,808

Transfer between reserves

-

-

-

38,000

-

55,916

(93,916)

-

-

-

Transactions with owners

Change in ownership interest in subsidiaries arising from

parent's additional investment

-

-

-

-

-

-

3,946

3,946

(3,946)

-

Dividends

-

-

-

-

-

-

(30,779)

(30,779)

-

(30,779)

At 30 September 2023

17,100

98,715

302,094

90,645

250,063

214,864

750,812

1,724,294

53,839

1,778,132

For the nine months ended 30 September 2022

At 1 January 2022

17,100

98,715

44,252

40,637

106,517

133,110

335,843

776,174

28,633

804,807

Profit for the period

-

-

-

-

-

-

111,903

111,903

4,139

116,042

Exchange differences on translation of foreign operations

-

-

(52,874)

-

-

-

(52,874)

(3,437)

(56,311)

Fair value change in financial assets classified as FVOCI

-

-

-

-

(16,915)

-

-

(16,915)

-

(16,915)

Fair value change in equity instruments classified as FVOCI

-

-

-

-

(8,510)

-

-

(8,510)

-

(8,510)

Net amount transferred to income statement

(551)

(551)

(551)

Total comprehensive income for the period

-

-

(52,874)

-

(25,976)

-

111,903

33,053

702

33,755

Transfer between reserves

-

-

-

(2,015)

-

12,110

(10,095)

-

-

-

Transactions with owners

-

-

-

Non controlling interest arising from business combination

4,290

4,290

Change in ownership interest in subsidiaries arising from

parent's additional investment

1,672

1,672

(1,672)

-

Dividends

-

-

-

-

-

-

(34,231)

(34,231)

-

(34,231)

At 30 September, 2022

17,100

98,715

(8,622)

38,622

80,541

145,220

405,092

776,668

31,954

808,621

At 31 December 2022

17,100

98,715

41,676

52,645

88,680

158,948

429,533

887,297

34,807

922,104

Page 4 of 29

Consolidated Financial Statements for the period ended 30 September, 2023

United Bank for Africa Plc

Condensed Consolidated Statements of Cash Flows

Group

For the nine months ended 30 September

Notes

Sep. 2023

Sep. 2022

In millions of Nigerian Naira

Cash flows from operating activities

Profit before income tax

502,091

138,493

Adjustments for:

Depreciation of property and equipment

13

14,643

12,354

Right of use of assets depreciation

13

4,000

2,669

Amortisation of intangible assets

13

3,968

3,415

Allowance for credit loss on loans to customers

11

138,428

15,691

Allowance for credit loss / (reversals) on loans to banks

11

2,150

(1,378)

Write-off of loans and advances

11

5,758

4,037

Impairment charge on investment securities

11

8,342

(739)

Impairment charge on contingent liabilities

11

99

1,311

Impairment reversal on other assets

11

1,224

(2,878)

Recoveries on loans written-off

11

(12,217)

(2,457)

Net fair value loss on derivatives

9

(339,957)

22,610

Dividend income

10

(4,430)

(3,962)

Impairment charge on placement

11

832

-

Gain on disposal of property and equipment

10

(54)

(273)

Foreign currency revaluation loss / (gain)

9

(32,594)

2,999

Net interest income

(443,082)

(282,513)

Share of profit of equity-accounted investee

-

(311)

(150,799)

(90,933)

Change in financial assets measure at FVTPL

8,506

(7,443)

Change in cash reserve balance

(780,381)

(245,860)

Change in loans and advances to banks

181,883

(7,256)

Change in loans and advances to customers

(1,959,634)

(390,802)

Change in money market placements

(379,213)

(29,065)

Change in other assets

(183,116)

229,680

Change in deposits from banks

583,757

127,296

Change in deposits from customers

3,758,185

646,032

Change in other liabilities and provisions

78,376

(28,262)

Interest received

675,153

408,847

Interest paid

(136,137)

(101,841)

Income tax paid

(31,265)

(28,808)

Net cash generated from operating activities

1,665,315

481,584

Cash flows from investing activities

Proceeds from sale/redemption of investment securities

2,688,657

929,469

Purchase of investment securities

(4,320,112)

(875,399)

Purchase of property and equipment

(23,273)

(20,163)

Proceeds from the sale of property and equipment

2,698

1,014

Additions to Leases

(6,315)

(3,491)

Dividend received

11,331

1,713

Net cash acquired from business combinations

-

17,973

Purchase/(Sale) of intangible assets

(1,962)

(2,601)

Net cash (used in)/generated from investing activities

(1,648,975)

48,515

Cash flows from financing activities

Proceeds from borrowings

157,707

162,270

Repayment of borrowings

(298,553)

(396,633)

Payments of principal on leases

(3,758)

10,553

Interest paid on leases

(392)

(805)

Interest paid on borrowings

(23,218)

(22,501)

Dividend paid to owners of the parent

(30,779)

(34,232)

Net cash used in financing activities

(198,993)

(281,347)

Net decrease in cash and cash equivalents

(182,653)

248,752

Effects of exchange rate changes on cash and cash

equivalents

507,085

(49,571)

Cash and cash equivalents at beginning of period

17

1,260,532

753,868

Cash and cash equivalents at end of period

17

1,584,964

953,049

The accompanying notes are an integral part of these condensed consolidated financial statements.

Page 5 of 29

Consolidated Financial Statements for the period ended 30 September, 2023

United Bank for Africa Plc

  1. General Information

  2. United Bank for Africa Plc. (the 'Bank'; UBA) is a Nigerian registered company incorporated on 23 February 1961 to take over the business of British and French Bank Limited (BFB). UBA listed its shares on the Nigerian Stock Exchange (NSE) in 1970 and became the first Nigerian bank to subsequently undertake an Initial Public Offering (IPO). The Bank's registered address is at 57 Marina, Lagos, Nigeria.
    The interim consolidated and separate financial statements of the Group for the period ended September 30 2023 comprise the Bank (Parent) and its subsidiaries (together referred to as the "Group" and individually referred to as "Group entities"). The Bank and its subsidiaries are primarily involved in corporate, commercial and retail banking, trade services, cash management, treasury and custodial services.
  3. Basis of preparation

  4. These interim consolidated and separate financial statements comply and have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (IASB) and interpretations issued by the IFRS Interpretations Committee (IFRS IC), and in the manner required by the Companies and Allied Matters Act of Nigeria 2020, the Financial Reporting Council of Nigeria Act, 2011 and the Banks and other Financial Institutions Act 2020 and relevant Central Bank of Nigeria circulars.
  5. Significant accounting policies
    1. Basis of measurement

      • These financial statements have been prepared on a historical cost basis, except for the following:
      • Derivative financial instruments which are measured at fair value.
      • Financial assets measured at fair value through profit or loss.
      • Financial instruments measured at fair value through other comprehensive income.
    3. Functional and presentation currency

    4. Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates ("the functional currency"). The financial statements are presented in Nigerian Naira (N) which is the Bank's functional currency and the Group's presentation currency.
    5. Use of estimates and judgements

    6. The preparation of financial statements requires the directors to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, incomes and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.
      The estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods, if the revision affects both current and future periods.
    7. Basis of consolidation

      • (a) Subsidiaries
        Subsidiaries (including structured entities) are entities controlled by the Group. Control exists when the Group has rights to variable returns from its involvement in an entity and has the ability to affect those returns through its power over the entity. The Group also assesses existence of control where it does not have more than 50% of the voting power but is able to govern the financial and operating policies by virtue of de-facto control. Subsidiaries are fully consolidated from the date in which control is transferred to the Group. They are deconsolidated from the date control ceases.
        The accounting policies of subsidiaries have been changed, where necessary, to align with the policies adopted by the Group. Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling interests.
        In the separate financial statements, investments in subsidiaries are carried at cost less impairment.
        (b) Business combinations
        Business combinations are accounted for using the acquisition method. The Group measures goodwill at the acquisition date as the total of:
      • the fair value of the consideration transferred; plus
      • the amount of any non-controlling interest in the acquiree; plus if the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree;
      • less the net amount (generally fair value) of the identifiable assets acquired and liabilities assumed.

When this total is negative, a bargain purchase gain is recognised in profit or loss.

Non-controlling interests are measured at their proportionate share of the acquiree's identifiable net assets at the acquisition date. Changes in the Group's interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions.

Page 6 of 29

Consolidated Financial Statements for the period ended 30 September, 2023

United Bank for Africa Plc

3.4 Basis of consolidation- Continued

Costs related to the acquisition, other than those associated with the issue of debt or equity securities that the Group incurs in connection with a business combination are expensed as incurred.

If the business combination is achieved in stages, the acquisition date carrying value of any previously held equity interest in the acquiree is re- measured to fair value at the acquisition date and any gains or losses arising from such re-measurement are recognised in profit or loss.

Any contingent consideration payable is recognised at fair value at the acquisition date. If the contingent consideration is classified as equity, it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes to the fair value of the contingent consideration are recognised in profit or loss.

(c) Disposal of subsidiaries

When the Group ceases to have control, any retained interest in the entity is remeasured to its fair value at the date when control is lost, with the change in carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified to profit or loss.

(d) Transactions eliminated on consolidation

Intra-group balances and any unrealised gains or losses or incomes and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. Unrealised gains arising from transactions with associates are eliminated to the extent of the Group's interest in the entity. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

(e) Changes in ownership interests in subsidiaries without change of control

Transactions with non-controlling interests that do not result in loss of control are accounted for as equity transactions. The difference between fair value of any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals of non-controlling interests are also recorded in equity.

(f) Associates

Associates are all entities over which the group has significant influence but not control, generally accompanying a shareholding of between 20% and 50% of the voting rights. Investments in associates are accounted for using the equity method of accounting. Under the equity method, the investment is initially recognised at cost, and the carrying amount is increased or decreased to recognise the investor's share of the profit or loss of the investee after the date of acquisition. The group's investment in associates includes goodwill identified on acquisition. In the separate financial statements, investments in associates are carried at cost less impairment.

If the ownership interest in an associate is reduced but significant influence is retained, only a proportionate share of the amounts previously recognised in other comprehensive income is reclassified to profit or loss where appropriate.

The Group's share of post-acquisition profit or loss is recognised in profit or loss and its share of post-acquisition movements in other comprehensive income is recognised in other comprehensive income with a corresponding adjustment to the carrying amount of the investment. When the group's share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the group does not recognise further losses unless it has incurred legal or constructive obligations or made payments on behalf of the associate.

The Group determines at each reporting date whether there is any objective evidence that the investment in the associate is impaired. If this is the case, the group calculates the amount of impairment as the difference between the recoverable amount of the associate and its carrying value and recognises the amount adjacent to 'share of profit/(loss)' of associates in profit or loss.

Profits and losses resulting from transactions between the Group and its associate are recognised in the Group's financial statements only to the extent of unrelated investor's interests in the associates. Unrealised losses are eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been changed where necessary to ensure consistency with the policies adopted by the Group.

Dilution gains and losses arising on investments in associates are recognised in the profit or loss.

3.5 Foreign currency transactions and balances

(a) Foreign currency transactions

Foreign currency transactions are recorded at the rate of exchange on the date of the transaction. At the reporting date, monetary assets and liabilities denominated in foreign currencies are reported using the closing exchange rate. Exchange differences arising on the settlement of transactions at rates different from those at the date of the transaction, as well as unrealized foreign exchange differences on unsettled foreign currency monetary assets and liabilities, are recognized in profit or loss.

Unrealized exchange differences on non-monetary financial assets are a component of the change in their entire fair value. For non-monetary financial assets measured at fair value through profit or loss, unrealized exchange differences are recognized in profit or loss. For non-monetary financial assets measured at fair value through other comprehensive income, unrealized exchange differences are recorded in other comprehensive income until the asset is sold or becomes impaired.

Page 7 of 29

Consolidated Financial Statements for the period ended 30 September, 2023

United Bank for Africa Plc

(b) Foreign operations

The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated to Nigerian Naira at exchange rates at each reporting date. The income and expenses of foreign operations are translated to Nigerian Naira at average rates.

Foreign currency differences are recognised in other comprehensive income, and presented in the foreign currency translation reserve in equity. However, if the operation is a non-wholly-owned subsidiary, then the relevant proportionate share of the translation difference is allocated to the non- controlling interest. When a foreign operation is disposed of such that control, significant influence or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is re-classified to profit or loss as part of the gain or loss on disposal.

3.6 Interest income and interest expense

Interest income and expense for all interest bearing financial instruments are calculated by applying the effective interest rate to the gross carrying amount for non-credit impaired financial assets and are recognised within 'interest income' and 'interest expense' in the profit or loss . The effective interest rate is the rate that exactly discounts the estimated future cash payments and receipts through the expected life of the financial asset or liability (or, where appropriate, a shorter period) to the net carrying amount of the financial asset or liability.

For credit-impaired financial assets subsequent to initial recognition, interest income is calculated by applying the credit-adjusted effective interest rate to the amortised cost of the financial asset.

The calculation of the effective interest rate includes all transaction costs and fees paid or received that are an integral part of the effective interest rate. Transaction costs include incremental costs that are directly attributable to the acquisition or issue of a financial asset or liability.

3.7 Fees and commissions income and expenses

Fees and commission income and expenses that are integral to the effective interest rate on a financial asset or liability are included in the measurement of the effective interest rate. Other fees and commission income, including account servicing fees, investment management and other fiduciary activity fees, sales commission, placement fees and syndication fees, are recognised at a point in time, or over time as the performance obligations are satisfied.

  1. Net trading and foreign exchange income
    Net trading and foreign exchange income comprises gains less losses related to trading assets and liabilities, and includes all realised and unrealised fair value changes and foreign exchange differences. Net gains or losses on derivative financial instruments measured at fair value through profit or loss are also included in net trading income.
  2. Dividend income

Dividend income is recognised when the right to receive income is established. Dividends are reflected as a component of other operating income and recognised gross of the associated withholding tax. The withholding tax expense is included as a component of taxation charge for the relevant period.

3.10 Income tax

Income tax expense comprises current and deferred tax. Income tax expense is recognised in the profit or loss except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.

Current income tax liability is the expected tax payable on taxable income for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following temporary differences: the initial recognition of goodwill, the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit, and differences relating to investments in subsidiaries to the extent that they probably will not reverse in the foreseeable future. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on laws that have been enacted or substantively enacted by the reporting date.

Deferred income tax liabilities are provided on taxable temporary differences arising from investments in subsidiaries, associates and joint arrangements, except for deferred income tax liability where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred income tax assets are recognised on deductible temporary differences arising from investments in subsidiaries, associates and joint arrangements only to the extent that it is probable the temporary difference will reverse in the future and there is sufficient taxable profit available against which the temporary difference can be utilised.

A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities against current tax assets, and they relate to taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.

Page 8 of 29

Consolidated Financial Statements for the period ended 30 September, 2023

United Bank for Africa Plc

  1. Cash and bank balances
    Cash and bank balances include notes and coins on hand, current balances with other banks, balances held with central banks and placements with banks which are used by the Group in the management of its short-term commitments.
    Cash and cash equivalents as referred to in the statement of cash flow comprises cash on hand, non-restricted current accounts with central banks and amounts due from banks on demand or with an original maturity of three months or less.
    Cash and bank balances are carried at amortised cost in the statement of financial position.
  2. Financial assets at fair value through profit or loss

These are the assets the Group acquires principally for the purpose of selling in the near term, or holds as part of a portfolio that is managed together for short-term profit or position taking. They are measured at fair value with changes in fair value recognised as part of net trading and foreign exchange income in profit or loss.

  1. Derivative financial instruments
    Derivatives are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently remeasured at their fair value. Fair values are obtained from quoted market prices in active markets, including recent market transactions, and valuation techniques. Derivatives are carried as assets when their fair value are positive and as liabilities when their fair value are negative. All changes in fair value are recognized as part of net trading and foreign exchange income in profit or loss.
  2. Property and equipment
    (a) Recognition and measurement

Items of property and equipment are carried at cost less accumulated depreciation and impairment losses. Cost includes expenditures that are directly attributable to the acquisition of the asset. When parts of an item of property and equipment have different useful lives, they are accounted for as separate items (major components) of property and equipment.

(b) Subsequent costs

The cost of replacing part of an item of property and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Group and its cost can be measured reliably. The costs of the day-to-day servicing of property and equipment are recognised in profit or loss as incurred.

(c) Depreciation

Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each part of an item of property and equipment since this most closely reflects the expected pattern of consumption of the future economic benefits embodied in the asset. Leased assets are depreciated over the shorter of the lease term and their useful lives. Depreciation begins when an asset is available for use and ceases at the earlier of the date that the asset is derecognised or classified as held for sale in accordance with IFRS 5 Non-currentAssets Held for Sale and Discontinued Operations .

The estimated useful lives for the current and comparative period are as follows:

Land

Not depreciated

Buildings

50 years

Leasehold improvements

Over the shorter of the useful life of item or the lease period

Aircraft

Between 16 and 20 years, depending on the component

Motor vehicles

6 years

Furniture and Fittings

5 years

Computer hardware

5 years

Equipment

5 years

Work in progress

Not depreciated

Lifts*

10 years

*In the financial statements, lifts are not treated as a separate class of property and equipment. They are included as part of Buildings.

Work in progress represents costs incurred on assets that are not available for use. On becoming available for use, the related amounts are transferred to the appropriate category of property and equipment.

Depreciation methods, useful lives and residual values are reassessed at each reporting date and adjusted if appropriate. Changes in the expected useful life are accounted for by changing the amortisation period or methodology, as appropriate, and treated as changes in accounting estimates.

(d) De-recognition

An item of property and equipment is derecognised on disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the year the asset is derecognised.

Page 9 of 29

Consolidated Financial Statements for the period ended 30 September, 2023

United Bank for Africa Plc

3.15 Intangible assets

(a) Goodwill

Goodwill represents the excess of consideration over the Group's interest in net fair value of net identifiable assets, liabilities and contingent liabilities of the acquired subsidiaries at the date of acquisition. When the excess is negative, it is recognised immediately in profit or loss. Goodwill is measured at cost less accumulated impairment losses.

Subsequent measurement

Goodwill is allocated to cash-generating units or groups of cash-generating units for the purpose of impairment testing. The allocation is made to those cash-generating units or groups of cash-generating units that are expected to benefit from the business combination in which the goodwill arose. Goodwill is tested annually as well as whenever a trigger event has been observed for impairment by comparing the present value of the expected future cash flows from a cash generating unit with the carrying value of its net assets, including attributable goodwill. Impairment losses on goodwill are not reversed.

(b) Software

Software acquired by the Group is stated at cost less accumulated amortisation and accumulated impairment losses.

Expenditure on internally developed software is recognised as an asset when the Group is able to demonstrate its intention and ability to complete the development and use the software in a manner that will generate future economic benefits, and can reliably measure the costs to complete the development. The capitalised costs of internally developed software include all costs directly attributable to developing the software, and are amortised over its useful life. Internally developed software is stated at capitalised cost less accumulated amortisation and impairment.

Subsequent expenditure on software assets is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure is expensed as incurred.

Amortisation is recognised in profit or loss on a straight-line basis over the estimated useful life not exceeding five years, from the date that it is available for use. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at each reporting date. Changes in the expected useful life, or the expected pattern of consumption of future economic benefits embodied in the asset, are accounted for by changing the amortisation period or methodology, as appropriate, which are then treated as changes in accounting estimates.

  1. Impairment of non-financial assets
    The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Group estimates the asset's recoverable amount. An asset's recoverable amount is the higher of an asset's or CGU's fair value less costs to sell and its value in use. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.
    In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs to sell, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded subsidiaries or other available fair value indicators.
    For assets excluding goodwill, an assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the Group estimates the asset's or CGU's recoverable amount. A previously recognised impairment loss is reversed only if there has been a change in the assumptions used to determine the asset's recoverable amount since the last impairment loss was recognised. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceeds the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in profit or loss. Impairment losses relating to goodwill are not reversed in future periods.
  2. Non-CurrentAssets Held for Sale
    Non-current assets classified as held for sale are measured at the lower of carrying amount and fair value less costs to sell. Non-current assets are classified as held for sale if their carrying amount will be recovered through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset is available for immediate sale in its present condition, subject to terms that are usual and customary for sales of such assets.
    Immediately before classification as held for sale or distribution, the assets are re-measured in accordance with the Group's accounting policies. Thereafter generally the assets are measured at the lower of their carrying amount and fair value less costs to sell.

Page 10 of 29

Consolidated Financial Statements for the period ended 30 September, 2023

Attention: This is an excerpt of the original content. To continue reading it, access the original document here.

Attachments

  • Original Link
  • Original Document
  • Permalink

Disclaimer

United Bank for Africa plc published this content on 30 October 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 October 2023 17:17:57 UTC.