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UBA commits $700m to power sector

By on January 30, 2014

The United Bank for Africa Plc has extended $700m (N113bn) in funding to different investors toward the acquisition of power assets in Nigeria’s recently privatised power sector.

A statement by the bank quoted its Group Managing Director, Mr. Phillips Oduoza, as giving this figure while speaking on the sidelines of the World Economic Forum in Davos, Switzerland.

“It is a growth sector in which we are playing very big,” Oduoza said.

Besides power, he said UBA was also heavily involved in the nation’s telecommunications sector where the bank had taken part in most of the big-ticket transactions.

On agriculture, the UBA chief executive officer said the bank had continued to channel resources to the sector, given the fact that it remains the mainstay of most economies in Africa.

He said, “UBA has a deliberate policy to continue to fund agriculture. Our lending to the sector is already above the industry average. We are doing about seven per cent of our total portfolio in agriculture.”

He commended the fact that lending to agriculture is generally on the upward trend from Nigerian banks, stating that banking sector funding to agriculture had moved from just about 0.5 per cent of total industry portfolio prior to 2009 to about 4.9 per cent.

“Interestingly, the non-performing loans coming from agriculture lending are lower than most people would have thought,” he said.

Oduoza explained that UBA was expanding its electronic banking products to improve the way it serves its more than seven million customers.

He said the bank had rolled out an array of electronic banking products, from cards to point of sale terminals, which is helping to reduce the cost to income ratio of the bank while making a positive impact on the bottom line.

Oduoza said the bank was operating in 19 African countries “and these are the very strong economies that we have in Africa and all of them are doing very well.”

He said 14 out of the 18 country subsidiaries of the UBA Group across Africa had started returning to profits.

He, however, explained that Nigeria still remained the dominant contributor to the UBA Group’s bottom line, making up an average of 75 per cent of the group’s balance sheet while the rest of Africa contributes 25 per cent.

He projected that in about five years, the UBA Group’s 18 African subsidiaries were expected to be contributing about 50 per cent of the group’s balance sheet.

On the forthcoming World Economic Forum, Africa, to be held in Abuja, Oduoza said the bank was optimistic and looking forward to the event.

“It will enable the country to create awareness about the opportunities that exist in Nigeria.

The country is a very big market, the population is very large. Beyond oil, the economy has started seeing some form of diversification, which the outside world does not know. We are going to use this opportunity to showcase all these new sectors.”

 

 

 

[Punch]