The Ugandan subsidiary of Nigeria’s United Bank for Africa on April 08th announced a UGX4.9 billion profit (USD1.3 million) profit, confirming that the lender is firmly out of its eight-year loss-making dry spell.
In results published in New Vision, a leading local daily, the bank announced that profit had climbed 390% from UGX1 billion in 2017 to UGX4.9 billion in 2018. This is the third year of straight profitability, following a UGX2.6 billion profit in 2016.
The good 2018 performance was powered by a 43% rise in income from UGX33.3 billion in 2017 to UGX47.6 billion in 2018. The income growth was largely driven by significant government lending. During the period under review, the bank’s interest earnings on government paper grew by 45% from UGX 12.1 billion to UGX17.5 billion.
Customer lending grew by 20%, from UGX27billion to UGX33 billion, while customer deposits nearly doubled from UGX127.8 billion to UGX244.7 billion- a 91.5% growth.
Total bank assets grew by 46.7% from UGX216.2 billion to UGX317.1 billion.
Johnson Agoreyo the turnaround CEO
UBA Bank’s three years of straight profit firmly put the bank out of its 8 years of back-to-back losses that today, leave the bank with UGX48.7 billion in accumulated losses.
Much of the profitability has been driven by the arrival, in June 2016 of Johnson Agoreyo, the bank’s 6th Managing Director/Chief Executive Officer.
Agoreyo whose over 25 financial services experience spans across key African banking brands, namely: Zenith Bank, Stanbic IBTC and First Bank of Nigeria from where he joined UBA in 2014. His last assignment before coming to Uganda was Group General Manager (Lagos Island, Central & Upper West).
Over the last 2 years, Agoreyo whose core expertise is in corporate and investment banking, has led a series of technologically driven innovations- many of them industry firsts.
For example in March 2017, UBA Bank and Uganda Revenue Authority (URA) launched a VISA and MasterCard powered tax payment solution that lets anyone with any of VISA or MasterCard branded cards pay tax using UBA Bank platforms or online regardless of which bank they bank with.
In September 2018, UBA together with MTN Uganda and MasterCard launched the MTN MoMocard, a debit card-like payment solution that allows MTN mobile money customers make quicker, safer and more convenient online payments globally, eliminating the need to have bank accounts before making online purchases.
MTN has the lion’s share of Uganda mobile payments sub-sector that as of June 2018 pushed UGX 19.3 trillion (USD5.2 billion) according to Uganda Communications Commission (UCC). MTN Group reported that MTN Uganda in 2019 earned ZAR 2.3 billion (UGX608 billion) in mobile payments related products.
UBA in 2018 won the Digital Impact Awards Africa (DIAA) Social Banking award for its groundbreaking innovation -LEO Chat banking, the industry’s first banking chatbot that supports customers perform ordinary banking transactions such as account opening, funds transfer and airtime purchases while providing access to customer service support on social media sites such as Facebook and WhatsApp.
All the above innovations have partly boosted UBA’s fees and commission business line which forms nearly 30% in the last 2 years of the bank’s earnings- UGX11.1 billion in 2017 and UGX10.6 billion in 2018.
The innovations have not only boosted direct incomes, but have also endeared the bank to customers, impacting on other fundamentals such as customer deposits.
During Agoreyo’s 3 years at the bank, customer deposits have grown by 183.1% from UGX86.4 billion in 2016 to UGX244.6 billion in 2018. This translates into a compound annual growth rate (CAGR) of 41.5%.
Lending has grown by 87.5% from UGX 17.6billion to UGX33billion (CAGR 23.3%).
This growth in the bank’s fundamentals, fuelled a 43% growth in income from UGX33.3 billion in 2016 to UGX47.6 billion in 2018 (CAGR 12.5%). Net Profit has grown by 88.5% from UGX2.6 billion to UGX4.9 billion. Assets have grown by 83.3% from UGX173 billion to UGX317 billion (CAGR 22.4%).
I will pursue Bank of Uganda to the end; if I die, my son will take over- Dr. Sudhir vows
“Nobody has been in the past been able to win Central Bank – they have stolen 7 different banks and not accounted to any shareholder and this is the unfortunate part of the whole scenario. You take somebody’s assets, you steal it, you profit from it and you don’t account for it; this is so ridiculous! Then, they sued for $100 Million; the money they stole, they are suing me for it. How?” he wondered.
Pictorial: How Meera Investments is changing Kampala’s skyline
Today, Meera Investments, the property development arm of the Ruparelia Group officially inaugurates their Electrical Plaza, the latest addition to their mixed use building portfolio in the city centre.
Since 1994, Meera has been part of a number of innovative property solutions in mainly, the commercial and residential space and today owns sectors and to date owns over 300 properties in Kampala and other major towns like Mukono, Jinja, Mbale and Mbarara.
The company, according to its Chairman and founder, Dr. Sudhir Ruparelia, is the largest developer of commercial and residential properties and also owns the largest number of ongoing real estate projects. It is also the largest private owner of commercial land in Kampala.
Meera Investments Limited was in 2017/18 rated as a top rental income taxpayer by Uganda Revenue Authority (URA) while Dr. Sudhir Ruparelia, the Chairman/Managing Director of Meera Investments, was rated the second biggest individual rental income taxpayer.
Over the last 3-4 years, the company has been on a construction spree, raising several properties across Kampala, which have both redefined city architecture and changed both Kampala’s skyline, as well as the look and feel of the Kampala City.
Today, we revisit and review some of those projects, especially those developed over the last 3-4 years
“The development of SGR isn’t behind schedule at all as far as harmonization agreement is concerned,” Says Coordinator
” The Standard Gauge Railway was adopted in 2014, by the East Africa Presidents who launched the multitrillion project meant to modernise the traditional railway transport system geared towards boosting economic growth by facilitating a faster movement of goods across borders. “
The SGR Coordinator, Canon Perez Wamburu while appearing before the Public Accounts Committee yesterday to respond to audit queries raised in the 2017/2018 audit report that raised concerns over the delays in implementation of the perceived regional railway, he affirmed that Uganda is on schedule for the construction despite compensating only 11% compensation of the project affected persons within three years.
His remarks were in response to a call by some MPs like Theodore Ssekikuubo (Lwemiyaga County) who questioned why taxpayers have to continue funding the team in charge of SGR yet no single kilometer of the railway has been constructed, five years from the time it was launched in 2014.
Ssekikuubo said, “We are incurring nugatory expenditure on this white elephant. Is it about time we launched the standard gauge railway. After a decade of the launch, not even one kilometer has been put on ground. Kenya has already started on its side, ours was launched at a hotel in Munyonyo, it has remained there, dead and buried there unless the contrary is proved, are we as a country right to continue appropriating money to a non-starting project.”
In response, Wamburu said, “We agreed that Kenya and Uganda arrive at Malaba at the same time. The development of SGR isn’t behind schedule at all as far as harmonization agreement is concerned. Uganda SGR isn’t late at all.”
The Standard Gauge Railway was adopted in 2014, by the East Africa Presidents who launched the multitrillion project meant to modernise the traditional railway transport system geared towards boosting economic growth by facilitating a faster movement of goods across borders.
President Uhuru Kenyatta of Kenya flagged off the maiden passenger train on the newly completed Mombasa-Nairobi SGR in March 2017 and although Uganda had promised to start construction in June 2015, but three years down the road, Government is yet to complete funding negotiations with Exim Bank China.
On Uganda’s side, project is to cost USD2.8Bn approximately, of this, Exim Bank will bring on board USD2.3Bn which represents 85%, while the remaining 15% will be footed by Ugandan tax payers.
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