Tony Elumelu

The nebulous leadership calibration of the Nigerian banking industry may soon be incontestable as the United Bank for Africa (UBA) plc posts a ground-breaking balance sheet size of N1.05 trillion for its financial year ended, September 30, 2006.

The result, an industry first in Nigeria, mirrors the vision of the bank to be the dominant financial services groups in Africa with a global footprint.

With all key performance indicators soaring in three digits, compared to the previous year’s figures, UBA has shown what proper risk assets management and creative deployment of retail resources could do to a bank’s bottomline.

According to the abridged annual report and accounts of the bank released yesterday, the balance sheet size soared by 217 percent, from N332.6 billion in 2005 to N1.05 trillion in 2006.

This leap significantly impacted all other performance indicators which recorded exponential growths. Gross earnings rose by 247 percent, from N26.1 billion in 2005 to N90.47 billion in 2006. The growth in deposit liabilities from N205 billion in 2005 to N776.13 billion in 2006 has more than justified the bank’s retail strategy that has seen the bank run more than 460 business offices throughout the federation.

This retail strategy also reasonably affected profits which grew by 115 percent, from N6.52 billion in 2005 to N13. 98 billion in 2006 reflecting good use of the bank’s risk assets. It was also a promise fulfilled as it would be recalled that the Group Managing Director and Chief Executive Officer of UBA Plc, Mr. Tony Elumelu had, in his address to stakeholders and the community of stockbrokers on the Nigerian Stock Exchange, in July 2006, promised that the bank was not going to return a profit after tax of less than N12 billion.

After the merger between UBA and the former Standard Trust Bank Plc, Mr. Elumelu had also promised to grow the bank into a neighbourhood bank through the pursuit of a robust retail banking strategy that will take banking to every category of Nigerians, especially the unbanked communities of people spread across Nigeria. To this end, the bank plans to open over 200 new business offices in different parts of the country within the next one year to bring the total branch network to over 750.

Over the past one year, UBA has let its brand touch the lives of several people. For the first time in the history of banking in Nigeria, a promotion was organized for depositors in which they were given the opportunity to win millions of naira every week. Called the UBA wise Millionaires Promo, people were encouraged to leave a minimum balance of N50, 000 in their savings account and they have the chance of winning the money. A lot of people also thought this was not going to work, but then they were wrong again. During the first promotion seven Nigerians who had savings accounts with the bank became millionaires. The success recorded in the initial promo has spawned another one called The Lion King Millionaires Promo. Other companies are also not keeping quiet, doing their best to start what looks like UBA’s model but with a different name.

Till date, UBA remains the only bank in the country that has a high quality in-house news journal for internal communication. Called The Lion King, the colourful publication reflects the territorial ambition of the bank and with its domineering red, the ambition of the bank to rule the nation’s financial services landscape and move strongly into the continent.

Although the bank has taken some steps into the continent (it has a subsidiary in Ghana with five branches) and even in the United States, it seem determined to souse Nigeria with its presence by opening even more branches and delivering other values for the customers. The bank currently has a branch network of about 450, the largest in the country and has also made known its determination to deploy as many as 3000 Automated Teller Machines (ATMs) across the length ands breadth of the country in an effort to make banking services available 24 hours of the day, thereby positioning the bank as “The wisest choice within reach.”

It was against this background that UBA, unrelenting in its effort to make a difference in the Nigerian banking environment as well as impact on more people than any other institution in its environment, initiated a number of strategic alliances with key players at various points of contact in the market. Key in the basket of alliances is the one UBA entered with UBS AG of Switzerland, easily the world’s leader in investment banking services with a balance sheet size in excess of $2 trillion. In the alliance, UBA and UBS will float and jointly manage a Private Label Fund (PLF). Already, the CBN has included UBA/UBS AG in the exclusive list of managers of a sizeable portion of the nation’s burgeoning external reserves.

The next alliance which portrays the bank as one with an eagle eye for opportunities is that which it entered with MTN, Nigeria’s leading mobile communication company. The two companies between them developed and deployed a product called X-Change to the market.

X-Change is a card-based, ATM-compliant product that integrates the features of the normal ATM card with that of a Virtual Top-Up vending machine, meaning one can use it to withdraw money as well as recharge his phone on a 24-hour basis.

UBA also has a comprehensive ticketing partnership with Virgin Nigeria, Nigeria’s flag carrier and fastest growing airline, and North American Airlines (NAA). In these alliances, Virgin Nigeria and NAA implants are allowed in UBA branches for ticketing purposes while UBA ATMs are deployed in the two airlines’ offices.

The latest of the alliances was the one recently signed with the United States Mission in Nigeria for the sole collection of visa fees from Nigerians intending to travel to US including rendering other related retail banking services, among others. The bank hopes to leverage on the alliance to reach the over 100, 000 intending travelers to the US per annum as well as enhance the brand profile of the bank, especially in the US where UBA remains the only African bank licensed to provide banking services.