The Group Chief Finance Officer of the United Bank for Africa, Mr. Ugo Nwaghodoh, has linked the bank’s improved performance in the 2017 financial year to strong control on cost of funding as well as prudent balance sheet management, among other measures.
The GCFO gave this hint during an interactive session with journalists in Lagos.
Nwaghodoh said: “The yield environment was positive and relatively high during the first half of the year. Despite growing our revenue, we also had strong control on our cost of funding. The banking business is intermediation. How efficient you are in the intermediation process is very vital. This borders on how much you bought money and sold money.
“Cost of funding was kept under significant check despite the tight liquidity environment you saw in the second half of the year. We were able to keep our weighted average cost of fund at 3.7 per cent.
“We kept it constant from 2016 in a market where fixed deposit interest rate went as high as 20 per cent. That efficiency in interest income and cost of funding side led to a net interest income growth of about 25 per cent”, the banker added.
In his remarks at the forum, the bank’s Head, Investor Relations, Mr. Abiola Rasaq, also spoke on the management’s decisive steps targeted at deepening the lender’s operations in the United Kingdom and the United States.
He pointed out that the initiative would help in improving the foreign branches’ contributions to the growth of the bank.
He said: “We took a decisive step to expand our business in London. We have a subsidiary in London, which is in addition to the New York office. To the best of our knowledge, we are the only Nigerian bank that has a deposit-taking licence in the United States.
“No other bank in Nigeria does that. And we say that proudly because today, we also service the correspondent banking needs of a number of Nigeria banks in the USA because of our deposit-taking licence.
“So what we did was to take our business in the UK a little further by applying to the UK Prudential Regulation Authority, which is more or less like their central bank. We applied to the PRA and invariably to the Financial Conduct Authority of the UK.
“Just early this year, we were given the authorisation to deepen and expand our business in the UK. We are happy to say that 2018 going forward, you will see more business going through our UK business”, Rasaq added.
It would be recalled that the group recorded N462 billion gross earnings in the 2017 financial year which represented a 20 per cent increase over its preceding year’s earnings.
