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UBA Subsidiaries to Boost Earnings | Restructuring Process Revisited at 50th Annual AGM

By on May 21, 2012

The Managing Director of UBA Plc, Philips Oduoza has said the bank is poised to witness a boost in profitability based on performance from its African subsidiaries.

Speaking at the bank’s 50th Annual General Meeting held in Lagos, Oduoza disclosed that the bank’s 18 African subsidiaries would contribute up to 50% of the bank’s earnings in the near future.

He said, “Our African expansion programme has been completed. The programme enabled us to reinforce our businesses in each of our operating countries in order to deepen our penetration, achieve positive contribution to the Group’s profitability and deliver commensurate returns on invested capital. With the expansion, we have diversified our operations and spread our risks beyond Nigeria, which is majorly a mono product economy for now.”

Speaking on the outcome of an executive management retreat to map out a 5 year strategy, Oduoza added, “In the end the bank maintained that it would continue to pursue its three-tier strategic intent of: being the dominant and clear leader in the financial services industry in Nigeria; being a leading African Bank(shift from expansion to business consolidation phase) and establishing a global presence.”

Also speaking at the AGM, Chief Israel Ogbue, Chairman of UBA briefed shareholders on the restructuring exercise of the bank. He disclosed that all the bank’s non-bank subsidiaries would be consolidated under UBA Capital.

He said, “Under the revised compliance plan, these entities (UBA Trustees Limited, UBA Stockbrokers Limited, UBA Nominees Limited, UBA Asset Management Limited, UBA Insurance Brokers Limited and UBA metropolitan Life Insurance) will be consolidated under UBA Capital Plc and will be spun off to all shareholders of the bank while the spin-off of African Prudential Registrars Plc and Afriland Properties Plc to the shareholders of UBA Plc would remain as approved by the shareholders at the Court-Ordered Meeting held in December 29, 2011.”

The Chairman added that new CBN guidelines made it compulsory for UBA’s offshore and onshore bank subsidiaries to fall under the main commercial banking arm of the group.

“The implication of this condition for UBA is that the establishment of UBA Africa Holdings; the holding company for our African subsidiary banks outside of UBA Plc; the parent bank, as outlined in the scheme of arrangements will no longer be allowed,” Ogbue said.

He added, “Consequently UBA Plc will become the parent bank holding company of all its commercial banking activities in Nigeria , Africa and the rest of the world and will also be the parent company for UBA Pension Custodian Limited and UBA FX Mart Limited.”