UNITED BANK for AFRICA PLC Consolidated and Separate
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UNITED BANK FOR AFRICA PLC Consolidated and Separate Financial Statements for the year ended 31 December 2018 Contents Note PageNote Page i Directors' Report 3 8 Critical accounting estimates and judgements 107 ii Complaints and Feedback 10 9 Operating segments 109 iii Corporate Governance Report 12 10 Interest income 112 iv Report to the Statutory Audit Committee 20 11 Interest expense 112 v Statement of Directors' Responsibilities 21 12 Allowance for credit losses on financial assets 112 vi Independent Auditor's Report 22 13 Fees and commission income 113 Consolidated and Separate Statements of vii Comprehensive Income 28 14 Fees and commission expense 113 Consolidated and Separate Statements of Financial viii Position 29 15 Net trading and foreign exchange income 113 Consolidated and Separate Statements of Changes in ix Equity 30 16 Other operating income 113 x Consolidated and Separate Statements of Cash Flows 32 17 Employee benefit expenses 113 Notes to the Consolidated and Separate Financial xi Statements 33 18 Depreciation and amortisation 113 1 General Information 33 19 Other operating expenses 114 2 Basis of preparation 33 20 Taxation 114 3 Significant accounting policies 33 21 Earnings per share 115 3.1 Basis of measurement 33 22 Cash and bank balances 115 3.2 Functional and presentation currency 33 23 Financial assets at fair value through profit or loss 115 3.3 Use of estimates and judgements 33 24 Loans and advances to banks 116 3.4 Basis of consolidation 33 25 Loans and advances to customers 117 3.5 Foreign currency 34 26 Investment securities 121 3.6 Interest income and interest expense 35 27 Other assets 122 3.7 Fees and commission income and expenses 35 28 Investment in equity-accounted investee 122 3.8 Net trading and foreign exchange income 35 29 Investment in subsidiaries 124 3.9 Dividend income 35 30 Property and Equipment 129 3.10 Income tax 35 31 Intangible assets 131 3.11 Cash and bank balances 35 32 Deferred tax assets and liabilities 132 3.12 Financial assets at fair value through profit or loss 36 33 Derivative financial instruments 136 3.13 Derivative financial instruments 36 34 Deposits from banks 137 3.14 Property and Equipment 36 35 Deposits from customers 137 3.15Intangible assets 36 36 Other liabilities 137 3.16 Impairment of non-financial assets 37 37 Borrowings 138 3.17 Repossessed collateral 37 38 Subordinated liabilities 140 3.18 Deposits and debt securities issued 37 39 Capital and reserves 141 3.19 Provisions 37 40 Dividends 141 3.20 Financial guarantee contracts 38 41 Contingencies 141 3.21 Employee benefits 38 42 Related parties 142 3.22 Share capital and reserves 38 43 Compensation to employees and directors 147 3.23 Earnings per share 38 44 Transactions requiring regulatory approval 148 3.24 Fiduciary activities 38 45 Non-audit services 148 3.25 Stock of consumables 38 46 Compliance with banking regulations 148 3.26 Segment reporting 39 47 Events after the reporting date 148 3.27 Changes in accounting policies 39 48 Restatement of comparative financial 149 information 3.28 Impact of adoption of IFRS 9 45 49 Condensed results of consolidated subsidiaries 150 3.29 Accounting policy for financial instruments prior to IFRS 9 49 Additional Disclosures 156 3.30 New standards and interpretations not yet adopted 53 3.31 Rounding of amounts 53 4 Financial risk management 54 5 Capital 95 6 Fair value measurement 97 7 Offsetting of financial instruments 106 Consolidated and Separate Financial Statements for the year ended 31 December, 2018 Directors’ Report The Directors present their report together with the audited financial statements of the Group for the year ended 31 December 2018. 1 Results at a Glance Group Bank 2018 2017 2018 2017 (N'Million) (N'Million) (N'Million) (N'Million) Profit before tax 106,766 104,222 55,350 52,795 Taxation (28,159) (26,674) (14,303) (11,399) Profit after tax 78,607 77,548 41,047 41,396 Other comprehensive income (33,273) 27,769 (12,009) 15,668 Total comprehensive income 45,334 105,317 29,038 57,064 Total comprehensive income attributable to: − Equity holders of the Bank 44,426 98,930 29,038 57,064 − Non-controlling interest 908 6,387 0 0 Total comprehensive income 45,334 105,317 29,038 57,064 2 Dividend The Directors, pursuant to the powers vested in it by the provisions of section 379 of the Companies and Allied Matters Act (CAMA) of Nigeria, propose a final dividend of N0.65 per share (31 December 2017: N0.65 per share) from the retained earnings account as at 31 December, 2018. This proposed final dividend and the N0.20 per share interim dividend paid in September 2018 will be presented to shareholders for approval at the next Annual General Meeting. The proposed dividend is subject to withholding tax at the appropriate tax rate. 3 Legal form United Bank for Africa Plc was incorporated in Nigeria as a limited liability company on 23 February, 1961, under the Companies Ordinance [Cap 37] 1922. It took over the assets and liabilities of the British and French Bank Limited, which had carried on banking business in Nigeria since 1949. UBA merged with Standard Trust Bank Plc on 01 August, 2005 and acquired Continental Trust Bank Limited on 31 December, 2005. 4 Major activities & business review UBA Plc is engaged in the business of banking and cater for the banking needs of Institutions, Corporate, Commercial and Consumer customer segments, providing trade services, remittance, treasury management, custody/investor services, digital and general banking services. Pension custody services are offered through its subsidiary. A comprehensive review of the business for the year and the prospects for the ensuing year is contained in the CEO’s report. 5 Directors NAME DESIGNATION Mr. Tony O. Elumelu, CON Non-Executive Director (Chairman) Ambassador Joe Keshi, OON Non-Executive Director (Vice-Chairman) Mr. Kennedy Uzoka Executive Director (GMD/CEO) Mr. Victor Osadolor Executive Director (DMD) Mr. Dan Okeke Executive Director Mr. Emeke Iweriebor Executive Director Mr. Oliver Alawuba Executive Director Mr. Uche Ike Executive Director Mr. Ayoku Liadi Executive Director Mr. Puri Ibrahim Executive Director Mr. Chukwuma Nweke Executive Director Chief Kola Jamodu, CFR* Non-Executive Director Ms. Angela Aneke Non-Executive Director Mr. Kayode Fasola Non-Executive Director Mrs. Foluke Abdulrazaq Non-Executive Director Mrs. Owanari Duke Independent Non-Executive Director High Chief Samuel Oni Independent Non-Executive Director 3 of 158 Directors’ Report - Continued 5 Directors - continued Erelu Angela Adebayo Independent Non-Executive Director Alhaji Abdulqadir Bello Independent Non-Executive Director * Having served three terms on the Board, Chief Kola Jamodu, CFR retired on January 28, 2019. In accordance with Articles 97 of the Articles of Association of the Bank, the following directors will retire by rotation and being eligible, offer themselves for re-election: Mr. Tony O. Elumelu, CON Mrs Foluke Abdulrazaq Mrs Owanari Duke Since the last AGM, Ms. Angela Aneke, Mr. Kayode Fasola, Erelu Angela Adebayo and Alhaji Abdulqadir Bello were appointed directors and in accordance to S. 249(2) of the Companies and Allied Matters Act 2004 and Article 75 of the Articles of Association, they will retire at this meeting and being eligible offer themselves for re-election. 6 Directors’ interests The interest of directors in the issued share capital of the Bank as recorded in the register of directors’ shareholding and/or as notified by the directors for the purpose of sections 275 and 276 of the Companies and Allied Matters Act and the listing requirements of the Nigerian Stock Exchange is as follows; 31-Dec-18 31-Dec-17 Direct Indirect holding Direct holding Indirect holding Name holding Mr. Tony O. Elumelu, CON 189,851,584 2,045,354,576 189,851,584 2,083,024,416 Amb. Joe Keshi, OON 433,499 - 433,499 - Mr. Kennedy Uzoka 37,173,909 - 37,173,909 - Mr. Victor Osadolor 16,583,126 - 16,583,126 - Mr. Dan Okeke 31,297,918 - 30,279,136 - Mr. Emeke Iweriebor 7,034,071 - 7,034,071 - Mr. Oliver Alawuba 462,000 - 462,000 - Mr. Uche Ike 10,936,395 - 10,936,395 - Mr. Ayo Liadi 1,080,000 - 1,080,000 - Mr. Puri Ibrahim 981,118 - 981,118 - Mr. Chukwuma Nweke 1,059,860 - 1,059,860 - High Chief Samuel Oni, FCA 2,065 - 2,065 - Ms. Angela Aneke - - N/A N/A Chief Kola Jamodu, CFR* 657,415 128,311 657,415 128,311 Mr. Kayode Fasola - - - N/A Mrs. Foluke Abdulrazaq 10,000,000 11,120,000 10,000,000 11,120,000 Erelu Angela Adebayo - - N/A N/A Alhaji Abdulqadir Bello - - N/A N/A Mrs. Owanari Duke 86,062 - 86,062 - Details of indirect holdings Name of Director Company(ies) Indirect Total indirect holding holding Mr. Tony O. Elumelu, CON HH Capital Limited 103,173,976 - Heirs Holdings Limited 1,742,180,600 - Heirs Alliance Limited 200,000,000 2,045,354,576 Chief Kola Jamodu, CFRJAMKOL Inv. Limited 128,311 128,311 Mrs Foluke AbdulrazaqBridge House College 11,120,000 11,120,000 4 of 158 Directors’ Report - Continued 7 Analysis of shareholding The details of shareholding of the Bank as at December 31, 2018 is as stated below; Headline Shareholders Holdings Cummulative Aggregate Cummulative Aggregate Range Count Count Count (%) Holdings Holdings Holdings % 1 -1000 30128 30128 11.11% 14,084,662 14,084,662 0.04% 1001 - 5,000 120219 150347 44.35% 300,593,268 314,677,930 0.88% 5,001 - 10,000 45087 195434 16.63% 308,331,381 623,009,311 0.90% 10,001 - 50,000 54457 249891 20.09% 1,133,439,488 1,756,448,799 3.31% 50,001 - 100,000 10578 260469 3.90% 710,753,889 2,467,202,688 2.08% 100,001 - 500,000 8308 268777 3.06% 1,664,259,240