United Bank fr Africa Plc Audited Results fr the Year Ended December 31, 2017 Africa's Glbal Bank UBA SUSTAINS STRONG PERFORMANCE GROWING COTRIBUTION AND MARKET SHARE FROM PAN AFRICAN NETWORK This Earnings Press Release shuld be read in cnjunctin with the Audited 2017 Cnslidated Financial Statements. The Earnings Press Release is als available n ur website at http://www.ubagrup.cm/ir/. This analysis is dated March 23, 2018. Unless therwise indicated, all amunts are expressed in Nigerian Naira, and have been primarily derived frm the Bank s Cnslidated Financial Statements, prepared in accrdance with the Internatinal Financial Reprting Standards ( IFRS ). The accunting plicies used in the preparatin f these cnslidated financial statements are cnsistent with thse used in the Bank s Audited 2016 Financial Statements. Additinal infrmatin relating t the Bank is available n the Bank s website http://www.ubagrup.cm. LAGOS, NIGERIA March 23, 2018 United Bank fr Africa Plc ( UBA, the Bank r the Grup ) annunced its Audited 2017 Financial Results. Grss earnings grew by 20% t N462 billin and the Grup delivered a strng 16% year-n-year grwth in prfit befre tax f N105 billin Highlights: Incme Statement Grss Earnings: N461.6 billin, cmpared t N383.6 billin in 2016FY (20.3% YY grwth). Operating Incme: N326.6 billin, cmpared t N270.9 billin in 2016FY (20.6% YY grwth). Operating Expenses f N188.6 billin, cmpared t N152.5 billin in 2016FY (23.7% YY grwth). Prfit Befre Tax: N105.3 billin, cmpared t N90.6 billin in 2016FY (16.1% YY grwth). Prfit After Tax: N78.6 billin, an 8.8% YY grwth cmpared t N72.3 billin in 2016FY. Cst-t-Incme Rati: 57.8%; cmpared t 56.3% in 2016FY. Annualized Return n Average Equity: 16%. Balance Sheet Ttal Assets: N4.07 trillin, cmpared t N3.50 trillin as at 2016FY (16.1% YY grwth). Net Lans: N1.65 trillin; reflecting a prudent 9.7% YY grwth in the lan bk. Custmer Depsits: N2.73 trillin cmpared t N2.49 trillin as at 2016FY; representing 10.0% YY grwth. Sharehlders Funds: N529.4 billin, up 18.2% YY; reflecting strng internal capital generatin. 1
Cmmenting n the result, Kennedy Uzka, the GMD/CEO, said; "This set f results, underlines the success f ur strategy f expanding acrss Africa, diversifying revenues and capturing the brader business pprtunities inherent in Africa s grwth. The results reinfrce the sustainability f ur business mdel and the capacity t deliver superir lng-term return t sharehlders, as the ecnmic and business envirnment imprve. In 2017, we made strng prgress in ur strategic initiative f dminating transactin banking acrss all ur cuntries f peratin, gaining market share in all lines f ur business. Even as the nn-il sectrs f ur largest cuntry f peratin, Nigeria, remained relatively weak, we still grew earnings by 20% t N462 billin, a third f which is attributable t nn-funded incme. I am particularly excited by the strng perfrmance f ur subsidiaries. Our banking peratins utside f Nigeria cntributed a third f the Grup s tp-line and 45% f the prfit fr the year. Our flagship subsidiaries are increasingly becming systemically imprtant in their respective markets, and we are leveraging custmer-centric strategies, speed t market, innvatin and an exceptinal culture f enterprise t cnslidate ur market share. We are emerging as a clear leader in digital banking fferings, as we leverage new technlgies and strategic alliances, t prvide prducts and services that prvide cnvenience and empwerment t ur custmers. Whilst we cntinue t invest in the future f the business, we remained fcused n cst efficiency and we are n track t deliver ur medium term cst-t-incme rati (CIR) target. We clsed 2017 with 58% CIR, despite the impact f Naira devaluatin, n the cst f ding business in Nigeria. Overall, we achieved a prfit befre tax f N105.3 billin, translating t 16% return n average equity. Imprtantly, we are ptimistic n the future earnings capacity f the Grup, as ur entrenched apprach t custmer engagement psitins us fr sustainable grwth. Als speaking n UBA s financial perfrmance and psitin, the Grup CFO, Ug Nwaghdh said; In a perid f high interest rates, we achieved a relatively lw 3.7% cst f funds. This peratinal efficiency reflects the benefit f ur rich pl f stable savings and current accunt depsits. The net interest margin stabilized at c.7%, even as yields n treasury assets drpped in the last quarter f 2017. Our cre transactin banking fferings gained strng mmentum, with incme frm these business lines grwing by duble digits. We remain cmmitted t ur respnsible apprach t balance sheet management, with fcus n grwing risk asset and brader balance sheet in a prfitable and prudent manner. Amidst a subdued Nigerian credit market, we grew ur lan prtfli by 10%, leveraging ur rbust liquidity and capitalizatin t supprt gd businesses thrugh this challenging ecnmic cycle. We clsed the year with a Basel II capital adequacy rati f 19% and a liquidity rati f 50%, well ahead f 15% and 30% regulatry requirement respectively. Our disciplined apprach t lending and brader risk management cntinues t uphld ur asset quality. 2
Statements f Cmprehensive Incme fr the Year Ended 31 December Grup Bank In millins f Nigerian Naira 2017 2016 2017 2016 Grss earnings 461,557 383,647 316,263 269,895 Interest incme 325,657 263,970 227,335 177,313 Interest expense (118,025) (98,770) (95,093) (68,525) Net interest incme 207,632 165,200 132,242 108,788 Fees and cmmissin incme 82,937 73,199 51,530 49,836 Fees and cmmissin expense (16,967) (13,988) (11,891) (11,139) Net fee and cmmissin incme 65,970 59,211 39,639 38,697 Net trading and frign exchange incme 49,063 43,820 31,210 32,678 Other perating incme 3,900 2,658 6,188 10,068 Ttal nn-interest incme 118,933 105,689 77,037 81,443 Operating incme 326,565 270,889 209,279 190,231 Net impairment lss n lans and receivables (32,895) (27,683) (30,433) (25,521) Net perating incme after net impairment lss n lans and receivables 293,670 243,206 178,846 164,710 Emplyee benefit expenses (68,972) (64,614) (42,343) (43,501) Depreciatin and amrtisatin (10,091) (8,650) (7,058) (6,281) Other perating expenses (109,547) (79,237) (75,608) (57,279) Ttal perating expenses (188,610) (152,501) (125,009) (107,061) Share f prfit/(lss) f equity-accunted investee 204 (63) - - Prfit befre incme tax 105,264 90,642 53,837 57,649 Taxatin charge (26,674) (18,378) (11,399) (10,108) Prfit fr the perid 78,590 72,264 42,438 47,541 Other cmprehensive incme Items that will be reclassified t incme statement Exchange difference n translatin f freign peratins 12,151 38,960 - - Fair value (lsses)/gains n available-fr-sale investments 15,701 28,114 15,751 28,084 Net amunt transferred t the incme statement (83) (1,188) (83) (1,188) Other cmprehensive incme, net f tax 27,769 65,886 15,668 26,896 Ttal cmprehensive incme fr the perid 106,359 138,150 58,106 74,437 Prfit attributable t: Owners f Parent 76,046 69,404 42,438 47,541 Nn-cntrlling interest 2,544 2,860 - - Prfit fr the perid 78,590 72,264 42,438 47,541 Ttal cmprehensive incme attributable t : Owners f Parent 99,972 130,783 58,106 74,437 Nn-cntrlling interest 6,387 7,367 - - Ttal cmprehensive incme fr the perid 106,359 138,150 58,106 74,437 Basic and diluted earnings per share expressed in Naira 2.22 2.04 1.20 1.31 3
Cnslidated and Separate Statements f Financial Psitin As at Dec-17 Dec-16 Dec-17 Dec-16 In millins f Nigerian Naira ASSETS Cash and bank balances 898,083 760,930 727,546 610,910 Financial assets held fr trading 31,898 52,295 31,898 52,295 Deriv ativ e assets 8,227 10,642 7,911 10,642 Lans and advances t banks 20,640 22,765 19,974 23,850 Lans and advances t custmers 1,650,891 1,505,319 1,173,214 1,090,355 I nv estment securities 1,216,053 970,392 665,478 533,016 Other assets 86,729 37,849 77,949 31,192 I nv estment in equity-accunted inv estee 2,860 2,925 1,770 1,770 I nv estment in subsidiaries - - 103,777 70,702 Prperty and equipment 107,636 93,932 89,285 80,252 Intangible assets 16,891 14,361 5,846 4,905 Deferred tax assets 29,566 33,060 27,178 29,696 TOTAL ASSETS 4,069,474 3,504,470 2,931,826 2,539,585 LIABILITIES Deriv ativ e liabilities 123 14 123 14 Depsits frm banks 134,289 109,080 15,290 30,484 Depsits frm custmers 2,733,348 2,485,610 1,877,736 1,698,859 Other liabilities 96,622 110,596 67,104 72,901 Current tax liabilities 7,668 5,134 1,108 522 Brrwings 502,209 259,927 502,209 259,927 Subrdinated liabilities 65,741 85,978 65,741 85,978 Deferred tax liabilities 40 62 - - TOTAL LIABILITIES 3,540,040 3,056,401 2,529,311 2,148,685 EQUITY Grup Bank Share capital 17,100 18,140 17,100 18,140 Share premium 98,715 117,374 98,715 117,374 Retained earnings 154,527 138,623 99,332 110,152 Other reserv es 240,861 160,714 187,368 145,234 EQUITY ATTRIBUTABLE TO OWNERS OF THE PARENT 511,203 434,851 402,515 390,900 Nn-cntrlling interests 18,231 13,218 - - TOTAL EQUITY 529,434 448,069 402,515 390,900 TOTAL LIABILITIES AND EQUITY 4,069,474 3,504,470 2,931,826 2,539,585 4
Editr s cmment United Bank fr Africa Plc is a leading Pan-African financial institutin, ffering banking services t mre than furteen millin custmers, acrss 1,000 business ffices and custmer tuch pints in 19 African cuntries. With presence in New Yrk, Lndn and Paris, UBA is cnnecting peple and businesses acrss Africa thrugh retail, cmmercial and crprate banking, innvative crss-brder payments and remittances, trade finance and ancillary banking services. Cautin regarding frward lking statements Frm time t time, the Bank makes written and/r ral frward-lking statements in press releases and ther cmmunicatins. In additin, representatives f the Bank may make frward-lking statements rally t analysts, investrs, the media and thers. All such statements are intended t be frward lking statements. Frward lking statements include, but are nt limited t, statements regarding the Bank s bjectives and pririties fr 2018 and beynd as well as strategies t achieve them, and the Bank s anticipated financial perfrmance. Frward lking statements are typically identified by wrds such as will, shuld, believe, expect, anticipate, intend, estimate, may and culd. By their very nature, these statements require the Bank t make assumptins and are subject t inherent risks and uncertainties, general and specific. Especially in light f the uncertainty related t the financial, ecnmic and regulatry envirnments, such risks and uncertainties many f which are beynd the Bank s cntrl and the effects f which are difficult t predict may cause actual results t differ materially frm the expectatins expressed in the frward-lking statements. Risk factrs that culd cause such differences include: credit, market (including equity, cmmdity, freign exchange, and interest rate), liquidity, peratinal, reputatinal, insurance, strategic, regulatry, legal, envirnmental, and ther risks. All such factrs shuld be cnsidered carefully, as well as ther uncertainties and ptential events, and the inherent uncertainty f frward lking statements, when making decisins with respect t the Bank and we cautin readers nt t place undue reliance n the Bank s frward lking statements. Any frward lking statements cntained in this press release represent the views f management nly as f the date heref and are presented fr the purpse f assisting the Bank s investrs and analysts in understanding the Bank s financial psitin, bjectives and pririties and anticipated financial perfrmance as at and fr the perids ended n the dates presented, and may nt be apprpriate fr ther purpses. The Bank des nt undertake t update any frward-lking statements, whether written r ral, that may be made frm time t time by r n its behalf, except as required under applicable securities legislatin. 5