UBA eye 50% revenue contribution from African subsidiaries

UBA eye 50% revenue contribution from African subsidiaries
Phillips Oduoza, Group Managing Director/CEO, UBA Plc

As part of efforts to effectively diversify its revenue generation, United Bank of Nigeria (UBA) Plc, has said that its medium term strategic target is to achieve balanced 50:50 earnings between Nigeria operations and African subsidiaries.

Speaking on the topic: ‘The Emergence of a Nigerian Pan-African Bank” at the Chartered Institute of Bankers of Nigeria (CIBN) 4th Valedictory Lecture at the weekend, the outgoing Group Managing Director/ Chief Executive, UBA, Mr. Philips Oduoza, said that the bank’s current revenue distribution between Nigerian and African operations stands at 72:28 percent.

Oduoza explained that the bank has an estimated potential customer size of 587 million from its 19 countries of operations within the continent, with customer base of over 10million, which he described as one of the highest within the continent, and was achieved largely due to the bank’s geographical spread.

He, however, noted that Africa has provided ample opportunity for UBA to diversify its banking business and therefore ensure sustainable revenues regardless of economic cycle.

“As a Pan-African Bank, we generate earnings from various regions so that we are not overtly exposed to a particular part of the continent and hence protected from systemic risks”, the outgoing MD said.

According to him, due to the improved political climate, steady growth in Gross Domestic Product (GDP), growing workforce and rapidly increasing disposable income, Africa presents a huge opportunity to providers of financial services like UBA Plc.

His words: “Increased presence of Pan-African institutions will also help to drive the relatively low level of financial inclusion across the continent and foster integration via intra-African trade.”

He explained that the volatility and instability in governance in some African countries have exposed most major banks in Africa to political risk, adding that resource commitment  by banks  to comply with new regulatory policies are not optimised due to frequent  economic instability faced by African countries through their political leaders.

According to him, there are few democratic regimes in Africa with various  forms  of undemocratic  policies in line  with global  definition, stressing  that such regimes are threat to ease of doing business.

He further explained that such governance situations pose the most visible threats to suitable and viable business environments, adding that the political instability has makes it very difficult for banks to maintain a collective standardised approached to the management of Africa banks.

Earlier, in his welcome address, the President/ Chairman of CIBN, Professor, Segun Ajibola, noted that the Institute’s Valedictory Lecture is one of the channels CIBN has set to achieve its promise, to be more prominent in national and intellectual discourse and engagement in intellectual assignments and communication of the findings to the relevant authorities.

“What makes the Valedictory Lecture particularly more engaging and of greater intellectual impact is the fact that it gives participants the opportunity to learn, first hand, from the practical experiences of an individual who has distinguished him/herself in a particular chosen profession”, Professor Ajibola stated.

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