Shareholders of the United Bank for Africa (UBA) said they are not satisfied with the Central Bank of Nigeria (CBN) for sterilising over N1.5 trillion as Cash Reserve Ratio (CRR) requirement in the bank’s balance sheet.
The shareholders made the remark at the 59th Annual General Meeting which was held by proxy at the UBA head office in Lagos. The CBN the Monetary Policy Committee (MPC) held in March retained CRR at 27.5 percent.
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Speaking on behalf of the Independent Shareholders Association of Nigeria (ISAN), the Emeritus National Coordinator, Sir Sunny Nwosu condemned the biting effect of the CRR policy on the business of the bank and the eventual dividend of investors.
“Cash restriction of over N1tr is definitely hurting the bank” as he insisted that the apex bank cannot be restricting commercial banks from leveraging their liabilities.
“We urge the bankers Committee to make it abundantly clear to the CBN that they can feel the pulse of investors.”
Nwosu praised UBA’s for ensuring that the African subsidiaries performed well by contributing 55% to the Group’s business.
Another shareholder, Nonah Awoh urged the management to ensure that the investors relations department worked closely with the Company secretary to drastically reduce the size of unclaimed dividends.
“If the money is not there, the government through its agencies would not be exploring ways to have access to the money.”
Responding, UBA’s Managing Director/Chief Executive Officer, Kennedy Uzoka, said: “With an average of N1.5 trillion sterilised and we were paying interest and not getting anything.
“Take an average of 5% (interest paid on savings) and work it back, you will get a sense of it.”
On the reduced dividend pay-out, he said: “Given the trajectory and the resilience of our business, we can assure you that we will meet and surpass the expectation of you and our shareholders.”
UBA Group Chairman, Tony O. Elumelu explained that the bank has made strategic decisions that will strengthen its resolve to earn the industry leadership that it has envisioned in Nigeria, Africa and globally.
“Our African operations (ex-Nigeria) have contributed approximately 55% of our profits for the year, illustrating that we are truly a pan-African bank.”
At the end of the 2020 financial year, UBA’s profits grew by 27.7% to N113.8bn, compared to N89.1bn recorded at the end of the 2019. Its profit before tax was N131.9bn, compared to N111.3bn the previous year.
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