2012 Annual Report & Financial Statements - UBA Plc

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104 Notes to the consolidated and separate financial statements continued … Bank Investment securities For the year ended 31 December In millions of Nigerian Naira Notes 31 Dec 12 31 Dec 11 1 Jan 11 Carrying amount 24 492,865 527,075 363,002 Held to maturity (HTM) Neither past due nor impaired Low risk 401,348 496,600 284,144 Carrying amount – amortised cost 401,348 496,600 284,144 Available-for-sale assets (AFS) Neither past due nor impaired Low risk 91,517 30,475 78,858 Carrying amount – fair value 91,517 30,475 78,858 Total carrying amount 492,865 527,075 363,002 Assets at fair value through profit or loss (Trading assets) Carrying amount 21 456 237 1,267 Low risk 456 237 1,267 Total carrying amount 456 237 1,267 Cash and bank balances Group For the year ended 31 December In millions of Nigerian Naira Note 31 Dec 12 31 Dec 11 1 Jan 11 Carrying amount 20 714,115 434,218 385,397 Low risk 714,115 434,218 385,397 Total carrying amount 714,115 434,218 385,397 Bank For the year ended 31 December In millions of Nigerian Naira Note 31 Dec 12 31 Dec 11 1 Jan 11 Carrying amount 20 629,481 352,500 330,701 Low risk 629,481 352,500 330,701 Total carrying amount 629,481 352,500 330,701 Other assets Group For the year ended 31 December In millions of Nigerian Naira Note 31 Dec 12 31 Dec 11 1 Jan 11 Carrying amount 25 13,710 8,956 21,252 Low risk 13,710 8,956 21,252 Total carrying amount 13,710 8,956 21,252 Bank For the year ended 31 December In millions of Nigerian Naira Note 31 Dec 12 31 Dec 11 1 Jan 11 Carrying amount 25 8,497 12,228 20,054 Low risk 8,497 12,228 20,054 Total carrying amount 8,497 12,228 20,054 Annual Report 2012
105 Statement of Prudential adjustments Provisions under prudential guidelines are determined using the time based provisioning prescribed by the Revised Central Bank of Nigeria (CBN) Prudential Guidelines. This is at variance with the incurred loss model required by IFRS under IAS 39. As a result of the differences in the methodology/provision, there will be variances in the impairments allowances required under the two methodologies. Paragraph 12.4 of the revised Prudential Guidelines for Deposit Money Banks in Nigeria stipulates that Banks would be required to make provisions for loans as prescribed in the relevant IFRS Standards when IFRS is adopted. However, Banks would be required to comply with the following: (a) Provisions for loans recognized in the profit and loss account should be determined based on the requirements of IFRS. However, the IFRS provision should be compared with provisions determined under prudential guidelines and the expected impact/changes in general reserves should be treated as follows: • Prudential Provisions is greater than IFRS provisions; the excess provision resulting should be transferred from the general reserve account to a “”regulatory risk reserve””. • Prudential Provisions is less than IFRS provisions; IFRS determined provision is charged to the statement of comprehensive income. The cumulative balance in the regulatory risk reserve is thereafter reversed to the general reserve account (b) The non-distributable reserve should be classified under Tier 1 as part of the core capital. During the year ended 31 December 2012, the Bank transferred an amount of N1,113 million to the Credit risk reserve. This amount represents the difference between the provisions for credit and other known losses as determined under the prudential guideline issued by the Central Bank of Nigeria (CBN), and the impairment reserve as determined in line with IAS 39 as at year end. In line with the same directive of the CBN, the Bank compared the provision based on the prudential guidelines with impairment under IFRS for comparative periods and no transfers were made as the impairment balance under IFRS was higher for the years.” Bank 31 Dec 12 31 Dec 11 1 Jan 11 Total impairment based on IFRS 8,769 12,993 32,564 Total impairment based on the Central Bank of Nigeria’s Prudential Guidelines 9,882 12,430 31,463 (Write-back)/charge (1,113) 563 1,101 Impaired loans and securities Impaired loans and securities are loans and securities for which the Group determines that it is probable that it will be unable to collect all principal and interest due according to the contractual terms of the loan/securities agreement(s). These are loans and securities specifically impaired and graded 6 in the Group’s internal credit risk grading system. Past due but not impaired loans Loans and securities where contractual interest or principal payments are past due but the Group believes that impairment is not appropriate on the basis of the level of security/collateral available and/or the stage of collection of amounts owed to the Group. Allowances for impairment The Group establishes an allowance for impairment losses that represents its estimate of incurred losses in its loan portfolio. The main components of this allowance are a specific loss component that relates to individually significant exposures, and a collective loan loss allowance, established for groups of homogeneous assets in respect of losses that have been incurred but have not been identified on loans subject to individual assessment for impairment.
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United Bank for Africa Plc RC: 2457
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1 United Bank for Africa (UBA) Plc
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3 Highlights of 2012 Performance Gr
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5 Emmanuel N. Nnorom, Executive Dir
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7 Angela Aneke, Non-Executive Direc
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9 Emem Etuk, Regional Bank Head (Cr
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11 Chairman’s Statement “We ach
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13 Sustainability In conducting our
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15 Chief Executive Officer’s Repo
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17 Net interest income grew by 34.3
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19 Review of Group Strategy Driven
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21 UBA POST-RESTRUCTURE SHAREHOLDER
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23 Group Financial Performance Revi
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25 Non-Performing Loan Ratio (%) Ou
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27 Review of UBA’s e-Banking Reso
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29 Services (SMS, e-Mail Notificati
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31 Education 2012 Projects include
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33 Projects Besides these projects,
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35 6. DIRECTORS The names of the Di
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37 10. SUMMARY OF DEALING IN UBA SH
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39 As a reflection of our diverse w
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41 Customer Complaints Report Intro
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43 Reports of the complaints receiv
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45 Appointments and retirements Dur
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47 Meetings are held at least once
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49 S/N Members Number of meetings h
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51 Audit Committee Report TO MEMBER
Page 55 and 56: 53 Statement of Directors’ Respon
Page 57 and 58: 55 Report on other legal requiremen
Page 59 and 60: 57 Consolidated and Separate Statem
Page 61 and 62: 59 (ii) Bank In millions of Nigeria
Page 63 and 64: 61 (ii) Bank In millions of Nigeria
Page 65 and 66: 63 Notes to the consolidated and se
Page 67 and 68: 65 recognition of further losses is
Page 69 and 70: 67 Deferred tax assets and liabilit
Page 71 and 72: 69 - there is an observable data in
Page 73 and 74: 71 Any interest in transferred fina
Page 75 and 76: 73 (n) Intangible assets (i) Goodwi
Page 77 and 78: 75 (v) (w) (x) Fiduciary activities
Page 79 and 80: 77 Impairment losses on initial cla
Page 81 and 82: 79 These Board committees are suppo
Page 83 and 84: 81 In playing this role, GALCO does
Page 85 and 86: 83 Risk Management Structure In res
Page 87 and 88: 85 Financial crime risk This is the
Page 89 and 90: 87 The universal market risk factor
Page 91 and 92: 89 Business continuity management B
Page 93 and 94: 91 - periodic vulnerability assessm
Page 95 and 96: 93 General risk rating process Unit
Page 97 and 98: 95 An estimate of the fair value of
Page 99 and 100: 97 Concentration by location (net)
Page 101 and 102: 99 Bank In millions of Nigerian Nai
Page 103 and 104: 101 Bank For the year ended 31 Dece
Page 105: 103 Loans and advances individually
Page 109 and 110: 107 Group In millions of Nigerian N
Page 111 and 112: 109 Liquidity risk management focus
Page 113 and 114: 111 The tables below show the undis
Page 115 and 116: 113 1 January 2011 In millions of N
Page 117 and 118: 115 Market risk profile The Group
Page 119 and 120: 117 Analysis of the Group’s sensi
Page 121 and 122: 119 Group 31 December 2012 In milli
Page 123 and 124: 121 Group Bank Group Bank Group Ban
Page 125 and 126: 123 Group In millions of Nigerian N
Page 127 and 128: 125 Fixed income re-pricing gap Pri
Page 129 and 130: 127 Tier 2 capital, which includes
Page 131 and 132: 129 5. USE OF ESTIMATES AND JUDGEME
Page 133 and 134: 131 (b) (i) Group: December 2011 In
Page 135 and 136: 133 Business segments The Group ope
Page 137 and 138: 135 (b) Business reporting (i) 31 D
Page 139 and 140: 137 7. Financial assets and liabili
Page 141 and 142: 139 The table below sets out the Ba
Page 143 and 144: 141 9. Net fees and commission inco
Page 145 and 146: 143 16. Other operating expenses In
Page 147 and 148: 145 (c) Analysis of the result of d
Page 149 and 150: 147 21. Financial assets held-for-t
Page 151 and 152: 149 24. Investment securities In mi
Page 153 and 154: 151 In millions of Nigerian Naira (
Page 155 and 156: 153 In millions of Nigerian Naira B
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155 (b) (i) Group As at 31 December
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157 29. Intangible assets continued
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159 30. Deferred tax assets and lia
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161 30. Deferred tax assets and lia
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163 34. Other liabilities continued
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165 37. Capital and reserves contin
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167 40. Related parties United Bank
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169 41. Compensation to Employees a
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171 44. Explanation of transition t
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173 Reconciliation of equity In mil
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179 Material adjustments reconcilin
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181 44. Explanation of transition t
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183 Statement of value added For th
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185 Five-Year Financial Summary IFR
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187 IFRS 31 December 2011 NGAAP Ban
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189 Investor Information UBA is one
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191 Top ten shareholders as at 31 D
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193 Credit rating summary As of 31
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195 Key Ratio Capital adequacy rati
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Shareholder Data Form United Bank f
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E-Share Allotment Mandate Form Unit
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Admission Form United Bank for Afri
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209 Corporate Information Registere
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AFRICA LONDON NEW YORK PARIS Head o
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