The outgoing Group Managing Director/CEO, United Bank for Africa Plc, Phillips Oduoza, has said the bank’s footprint and reach within the African continent comes with immense benefits, including cost cutting.
At the fourth valedictory lecture organised by the Chartered Institute of Bankers of Nigeria (CIBN) in his honour in Lagos, at the weekend, the bank chief said the lender’s African reach helps it initiate and complete Letters of Credit (LC) transactions within the continent.
This, he said, saves time and resources for its customers. He said other lenders, without the African spread advantage, may not have the same advantage.
He said the huge informal trade as well as the growing intra-African trade is opportunities that financial institutions operating within the continent can capture via the use of existing trade products, such as LCs.
“The current practice for an LC confirmation is for it to be done outside Africa by European and United States banks even if the companies consummating the trade both reside within the continent. This need not be so. It is my strong belief that businesses conducted across African borders can be efficiently financed by eliminating the extra cost incurred when LCs are confirmed outside the shores of the continent. There will also be efficiency gains in the reduced time to confirm and negotiate LCs for customers coming from two African countries. As a Pan-African, UBA has provided and will continue to provide this unique service and support to its customers across the continent,” he said.
He said the Pan-African banking model creates room for innovativeness and ability to benefit from economies of scale to be more cost efficient. The ability to group related banking functions together and provide service from a single platform could lead to huge cost savings.
“UBA leveraged this concept by setting up a group shared services platform. The group shared services platform has been used to handle some routine tasks carried out at our business offices and subsidiaries, thereby cutting costs, ensuring standardisation and improving efficiency across the entire group. We established two platforms to handle some transactions relating to either Anglophone or Francophone countries,” he said.