From Cyriacus Nnaji, Lagos
With a lengthy career in the banking industry, Mr. Kennedy Uzoka, the Group Managing Director/Chief Executive Officer of United Bank for Africa (UBA), has undoubtedly brought great transformation to the bank which has consistently maintained its number one position in Nigerian banking industry.
Uzoka realized the significance of technology and e-banking, as most recently, he spearheaded the Customer Focused revolution in the bank which has created a fully digital 24/7 user friendly experience that aims to anticipate and fulfil customer’s expectation.
No wonder, Fitch, one of the foremost credit rating agencies affirmed long term issuer Default rating of UBA at “B”, with a stable outlook. According to Fitch, the rating of UBA Plc is driven by the standalone creditworthiness of the bank, as defined by its viability rating, which is constrained by Nigeria’s operating environment.
In the report issued in the evening of January 31, 2018, Fitch highlights UBA’s systemic importance, its well established franchise and internationalization across 19 African countries, all of which reinforce the rating strength of the bank. Just as most equity and credit analysts, Fitch views UBA’s earnings and profitability positively, especially as it’s reported impaired loans/gross loans ratio (Non-Performing Loan Ratio) remains relatively low around four per cent.
Fitch asserts that the Group is largely funded by historically stable deposits and UBA’s strategy is to continue to expand its low-cost retail deposit base even as the rating agency said UBA’s retail deposit is higher than the average of peers and local currency liquidity ratios are high.
“We reckoned UBA maintained a liquidity ratio of 40% through the first nine months of 2017, a notable buffer over the regulatory requirement of 30%, despite the stressed liquidity in the Nigerian banking system within the period,” the company noted in its report. As regards capitalization, Fitch views the bank’s capital ratios to be in line with other large Nigerian banks and noted that the National Ratings of UBA Plc reflects its creditworthiness relative to Nigeria’s best credit and to peers operating in Nigeria.
Under Uzoka, UBA grew its profit to N62 billion in nine months of 2017, the unaudited Third Quarter Financial Results 2017, showed a 7% year-on-year growth in profit before tax to N62 billion despite the challenging macro-economic environment. This represents an impressive 18.2% annualized return on average equity. The bank recorded an appreciable growth in both funding and fee income lines.
According to Uzoka, “I am pleased with the first nine months of the year. Notwithstanding the negative economic growth in Nigeria, we maintained growth in earnings and sustained our asset quality. Increasingly, we are leveraging our unique pan-African platform to drive new customer acquisition and grow market share across our African subsidiaries”.
Furthermore, the bank’s level of impairment in its overall loan book was moderate. The Non-Performing Loan (NPL) ratio of 2.5% and 0.9% cost of risk remain one of the best in the industry. UBA Plc’s third quarter results also show significant efficiency gains with appreciable growth in operating income by 11% to N183 billion while profit after tax rose by 8% to N52 billion within the period.
Conducting financial transactions is the biggest motivator for any digital innovation- drastic reduction in cash transactions and avoidance of very long queue at the over-the-counter and Automated Teller Machine points.
The case for digital banking is even clearer now, as an outdoor market in the neighbourhood can be patronised easily with just a punch of few numbers from the phone, saving the seller considerable time in counting currency, reconciling the amount of money on hand with the day’s sales, while the buyer leaves the scene quickly.
Although the electronic payment system was assessed to have struggled last year, particularly by the impact of recession and inflation, which eroded purchasing power, it never whittled down the attraction, but challenged the operators on innovations.
But United Bank for Africa, a Pan-African financial institution, recently expanded its approach to revolutionized banking channel with the introduction of Leo.
This was also part of efforts aimed at getting closer to its customers, satisfying them promptly and wooing the unbanked populace, as well as others outside its network. It is a new strategy that comes like human interface.
The new app is the face of UBA Chat Banker that enables customers make use of their social media accounts to carry out key banking transactions.
To enable customers key into the app quickly, at the official launch of Leo, customers were given a step by step demonstration on the novel way of delivering lifestyle and quality banking through the Facebook Messenger chat platform.
Leo also came with assurance to address any type of banking concerns raised by customers through the Facebook Messenger chat platform.
The solution has already emerged the first that a financial institution in Africa has come up with app to simplify the way customers transact- something that has become necessary in today’s fast-paced world with demands for quick-time transactions and response.
Specifically, with the launch of the chat banking, customers will be able to open new accounts, receive instant transaction notifications, check their balances on the go, transfer funds and airtime top up. They will also be able to confirm cheques, pay bills, apply for loans, freeze accounts, request for mini statements, among other things.
Uzoka, said that the launch of Leo is part of initiatives aimed at putting the bank’s customers first, with UBA continuously developing strategies aimed at enthroning seamless transactions for the bank’s numerous users, while ensuring utmost safety of their transactions.
“The formulation of this product is consistent with the bank’s ‘customer first’ philosophy, where we are doing things not the way we like, but focusing on what the customers want, where they want it, and in the exact platform they want it.
“At UBA, we have been working with technology giants that have the global capacity to ensure not only seamless but also effortless banking for millions of our customers across Africa.
“We have aligned Leo App with the normal banking limit for customers who are enrolling for the first time, Leo takes them automatically through low Know Your Customer (KYC) programme, which will enable them to do up to N50,000 transactions.
“We have been working with technology giants that have the global capacity to ensure not only seamless transactions, but also effortless banking for millions of our customers across Africa.
“We have collaborated with Facebook to come up with this innovation that is capable of revolutionising the way banking is done in Africa,” he said.
“Leo being an intelligent personality, will give you feedback instantaneously as you transact your business on the platform. A solution that is from the customer’s standpoint and is easy to use by anyone,” he said.