United Bank for Africa (UBA) Plc has granted as much as N85billion loans to Nigeria’s agricultural sector. Also, lending to the power sector is in excess of N180billion across the UBA Group.
Agriculture is Nigeria’s single largest contributor to economic growth and employs the largest number of rural dwellers, yet its share of banking sector credit has been low because commercial banks regard the sector as unsafe for lending.
Recent figures obtained from UBA group revealed that the bank is the highest lender to agriculture.
Head, Investor Relations, at the UBA Group, Mr Abiola Rasaq said at a recent interactive session with journalists that the bank’s loans to the agriculture sector represent about 5 percent of its overall loan book. He explained that the Pan-African financial institution finds these sectors to be very critical to Nigeria’s economic growth and stability. Besides, he said the loans to the agriculture sector will help Nigeria attain her target to be self-sufficient in food production.
“We are one of the banks that lend a lot of money to the manufacturing sector and one of the few banks that lend a lot of money to the power sector because we find these sectors to be critical,” Rasaq added.
In terms of SMEs, UBA is the highest lender to agriculture. Today our loan book in agriculture alone represents about 5 percent of our overall loan book of N1.7trn; that represents about N85billion in agriculture.
“In power, today, we have lend in excess of N180billion across the UBA Group, and not just in Nigeria but in some other African countries because we have identified these sectors to be very critical, not only from a business perspective to us as a bank but also because we believe that if we get the agricultural sector right, for example, we will attain food self-sufficiency, which is very important. So we see that as a way of supporting the real sector of the economy not necessary from the banking sector perspective or from a profit-making perspective”, said Rasaq.
In terms of Corporate Social Responsibility (CSR), Rasaq said the bank spent N816million in 2017 alone supporting the economy.
“We donated N300million to the Nigeria Police because of the security issue in Nigeria and likewise some other banks. We also donated N50 million to Lagos state security trust fund. In addition to that, UBA also donated N25million to four different states to help secure their states.” This he said was aside construction of roads in some villages and various supports to schools in parts of the country.
The UBA Groups Chief Finance Officer, Mr Ugo Nwaghodoh said “the bank has the responsibility to ensure that it lends out cautiously to individuals, companies, SMEs that will do business and safely return the money.
During recessions, you find generally that banks fold up a bit; they are not quick to lend out money because businesses are struggling, that is why you might find out that during the recession, there’s not a lot of exposures.”
UBA recorded gross earnings of N462 billion, a 20per cent growth in overall revenue for the year ended December 2017. The bank attributed the boost to growth in loan book and treasury assets, as well as efficient balance sheet management. Profit after tax rose N78.6 billion compared with N72.3 billion in the corresponding period of 2016. Also, profit before tax increased to N105.3 billion in 2017 compared with N90.6 billion in 2016.