First Half 2023: Afreximbank’s Total Asset Grows to $30bn, UBA Roars Back with N404bn PBT

The African Export-Import Bank (Afreximbank) has released its consolidated financial statements of the bank and its subsidiaries for the half year ended 30 June 2023, which demonstrated strong and resilient performance.

This is just as the United Bank for Africa, UBA roared back with UBA Records Significant Growth in revenue, profit, key metrics, with N404bn PBT. A performance it says demonstrates its Pan-African, global growth.

According to a statement from the multilateral institution yesterday, Afreximbank Group’s total balance sheet assets grew by eight per cent, from $27.9 billion as of December 31, 2022 (FY-2022) to approximately $30.1 billion as of 30 June 2023.

It explained that the growth was driven by the increase in loans and advances to customers, which grew by 13 per cent to close the period at $26 billion.

The liquidity position remained strong at $3 billion, representing 11 per cent of total assets and achieving a liquidity coverage ratio of 310 per cent.

“Due to increased volume of interest-earning assets, particularly loans and advances and higher interest rates, total interest income recorded a strong growth of 107.1 per cent to reach $1.1 billion for the half-year (H1-2023) period compared to $540.8 million for the same period in 2022.

“Net interest income amounted to $663.6 million, up 76 per cent, from the prior year, mainly due to continuous effective management of interest expenses.

“Net Interest Margin as a result increased to 4.77 per cent, compared to 3.47 per cent last year,” it stated.

The Group’s shareholders’ funds rose by 7.63 per cent to $5.6 billion as of 30 June 2023, compared to FY-2022. The growth was largely attributable to the $261 million fresh equity contributions from existing and new shareholders who have supported the ongoing general capital increase exercise which aimed to raise $2.6 billion paid-in equity by 2026.  “In addition, the growth in shareholders’ funds was also underpinned by $125.5 million internally generated net earnings after taking into account the approved dividend and other appropriations which amounted to $209 million,” it added.

Afreximbank’s Executive Vice President, Finance, Administration and Banking Services, Mr. Denys Denya said: “During the period in which the Bank celebrated its 30th Anniversary, we have delivered a strong set of results, driven largely by a focused execution of our mandate as a countercyclical lender which generated increased volume of interest-earning assets, particularly loans and advances and benefited from a rising interest rate environment. “The bank continued to make progress on its strategy implementation, carefully balancing the need to be profitable and sustainable, while maintaining sufficient liquidity, capital, and a quality portfolio of assets. “

He further highlighted that despite the continued challenges caused by the Ukraine crisis, ongoing geo-political tensions and persistently high inflation, the half-year period saw some headwinds receding, including relatively lower energy and food prices, reduced supply bottlenecks and the re-opening of China, Africa’s biggest trading partner.

Denya, pointed out that Global Credit Rating (GCR) and Japanese Credit Rating (JCR) respectively affirmed Afreximbank’s international scale long and short-term issuer ratings of A/A2 and A-, with a “Stable” Outlook, while Moody’s maintained the Bank’s credit rating at Baa1.

In addition, African Banker recently bestowed on Afreximbank, the 2023 African Bank of the Year and the DFI of the Year awards in recognition of the Bank’s contributions to the continent’s Trade and Development, Denya added.

“Significant progress was made during the first half of the year with the Bank’s subsidiary FEDA generating profit after only two years of operation and AfrexInsure generated premium income on assets valued at over $2 billion.

“We began the second half of 2023 well and are confident that Afreximbank’s strong financial position will provide a solid base for the Group to continue assisting its clients and African countries in expanding trade and investments, meet trade finance obligations, boost production especially of food and export value added products, as well as alleviate supply chain constraints and enable the continent to adapt sustainably to the challenging effects of climate change.”

UBA Records Significant Growth in Revenue, Profit, Key Metrics, with N404bn PBT

Africa’s Global Bank, the United Bank for Africa (UBA) Plc has delivered an outstanding performance for the half year ended June 30, 2023, as announced in its audited financial report.

 The results released to the Nigerian Exchange Limited (NGX) yesterday, showed that the Group recorded double and triple-digit growth across its major income lines, as it continued to show substantial progress in increasing the contribution and market share from its subsidiaries in Africa and globally.

 Specifically, at the end of the first two quarters of the year, and despite the tough global macroeconomic backdrop and geo-political challenges in

Africa, UBA Group reported a profit before tax of N404 billion, representing an extraordinary increase of 371 per cent, when compared to N85.75 billion recorded in the first half of 2022. This translated to an annualised Return on Average Equity of 57.7 per cent as against 17.1 per cent a year earlier.

 In addition, the results also showed as of June 30, 2023, it recorded profit after tax (PAT) of N378.24 billion, representing a leap of 437.8 percent over H1 2022, just as its operating income grew by 206.6 per cent to N783.96 billion in June 2023; higher than N255.67 billion reported a year earlier.

The Group also delivered a 164 per cent growth in its gross earnings which rose to N981.78 billion as at June 2023, up from N372.36 billion recorded in June 2022.

UBA’s total assets continued a strong upward trajectory, rising above the N15 trillion mark, as it hits N15.38 trillion, representing a 41.7 per cent leap up from N10.86 trillion recorded at the end of last year, just as its customer deposits also rose by a sharp 42.4 per cent to N11.14 trillion in the period under consideration; as against N7.8 trillion recorded at the end of 2022.

The bank’s shareholders’ funds increased to N1.712 trillion reflecting the Group’s strong capacity for internal capital generation.

In line with the Group’s culture of paying both interim and final cash dividends, the Board approved an interim dividend of 50k per share, which represented over 150 per cent increase over the prior year.

UBA’s Group Managing Director/Chief Executive Officer, Mr. Oliver Alawuba, while commenting on the results said the exceptional performance underscored the Group’s commitment to consistently deliver value to its shareholders.

He added that the Group made progress in digital payments, retail penetration and also benefitted from the effect of revaluation gains, arising from the harmoniSation of foreign exchange rates at the different access windows in Nigeria.

 He said, “The Group recorded strong double-digit growth in revenues and profits from its operations, the result also reflects the effect of sizeable revaluation gains, arising from the harmonisation of currency exchange rates in Nigeria.

“Our reporting currency found a new exchange level at about N756 to 1$ as of 30 June 2023, compared to N465 at the beginning of the year. The results again demonstrate the benefits of our long-held diversification strategy across Africa and globally.  The growth of our international business, most recently in the UAE, only reinforces this earnings quality.”

 Continuing he added, “Our business is on a steady growth trajectory, as we further strengthen our risk management traditions and practices necessary technology investments to deliver premium service to our customers.

“We have also continued to finance landmark projects in critical sectors of the economies across Africa, facilitating intra-Africa trade with our valuable offerings and provide a versatile last-mile distribution network for Africa-bound donor and multilateral agency funds.

“The three core geographical pillars of our business (Nigeria, Rest of Africa and Rest of the World) are making strong contributions to the Group profit, further justifying our global strategy and business positioning across Africa, UAE, France, UK and USA, and demonstrating the benefits of positioning UBA as the financial intermediary for Africa and the rest of the world.”

On the plans for the rest of the year, Alawuba said, “As we approach the last quarter of the year, the Group remains strategically positioned to sustain the strong performance, consolidating on H1 2023 results, to deliver superior returns to our esteemed shareholders.”

UBA’s Executive Director Finance & Risk, Ugo Nwaghodoh, said the half year 2023 financial numbers reflected an excellent performance across key metrics, as the bank diligently executed its strategic priorities.

 “Our HY2023 financial numbers reflect excellent performance across key metrics, as we diligently execute our priorities for the year.

“Annualised return on average equity at 57.7 per cent was bolstered by improved operating income and revaluation gains,” he explained.

Nwaghodoh, also pointed out that the Group maintained robust capital buffers to support business growth and loss absorbency.

UBA is a leading pan-African financial institution, offering banking services to more than thirty-seven million customers across 1,000 business offices and customer touch points in 20 African countries. With presence in New York, London, and Paris and now the UAE, UBA is connecting people and businesses across Africa through retail, commercial and corporate banking, innovative cross-border payments and remittances, trade finance and ancillary banking services.