Union Bank of Nigeria Plc, on Monday July 29, 2019, released its unaudited financial statement for the period ended June 30, 2019, with a sustained growth in profits. The result shows that group profit after tax went up by 3 percent from N11.5 billion in 2018 to N11.9 billion in the period under consideration.
Also profit before tax was up by 4 percent from N11.7 billion in 2018 to N12.1 billion in 2019. While gross earnings declined by 9 percent to N76.0 billion which is below N83.3 billion that was recorded in 2018. The reduction was attributed to a decrease in average earnings assets.
Just as customer deposits was up by 4 percent to N889.5 billion which is above N857.6 billion in 2018. Other highlight of the result shows that interest income was down by 8 percent to N57.3 billion. Net interest income after impairment was up by 3 percent to N30.5 billion. This was supported by aggressive drive in collection.
Operating expenses was down by 4 percent to N37.5 billion, which reflected the bank gains on cost optimization program. Gross loans was up by 8 percent to N563.0 billion, driven by increased risk asset creation across priority economic sectors.
Commenting on the results, Chief Executive Officer of the bank, Emeka Emuwa said, “Notwithstanding the realities of operating in a challenging economic environment, the Group delivered a 4% growth in Profit Before Tax (PBT) to ₦12.1 billion from ₦11.7 billion in H1 2018. To sustain growth in earnings, we remained steadfast in our commitment to delivering value and first-class customer experience to all our customers. We have developed a concerted and clear plan to increase our risk assets with our loan book growing by 8% to ₦563.0 billion compared to year-end 2018. The ability to take on more risk is hinged on our robust risk management and debt recovery processes working in sync which led to recoveries of over N5 billion in the period. We successfully closed our Series 3, 10 year ₦30 billion bond in June, as part of our ₦100 billion debt capital programme. This series, which was once again fully subscribed, is the largest 10-year bond issued by a Nigerian corporate to date. This further reinforces the confidence of the investor community in Union Bank. With this new injection of tier 2 capital, we are well positioned to deliver on our growth strategy and priorities. Looking ahead, we will continue to focus on opportunities to deliver our simpler, smarter banking promise to our customers while improving internal operational efficiencies which will translate to enhanced shareholder value.”
On his part the Chief Financial Officer, Joe Mbulu said, “In the first half of 2019, we continued with our expansion strategy to grow our agency banking footprint which in turn boosted customer confidence in our brand. Customer deposits have followed the same trajectory with a 4% growth, to ₦889.5 billion as at June 2019 from ₦857.6 billion in December 2018. Net Interest Income after Impairments is also up 3% to ₦30.5 billion compared to ₦29.7 billion in the same period in 2018. With our aggressive focus on recoveries and improving asset quality, the Bank’s NPL ratio has continued its downward trend, declining to 7.3% from 8.1% as at December 2018 ahead of full year 2019 guidance. Improvement in asset quality has enabled us to grow our loan book optimally in the first half of 2019, positioning us with the ability to take on emerging opportunities in key sectors of the economy. Having completed our Series 3 ₦30 billion funding, our Capital Adequacy Ratio (CAR) further strengthened, closing at 19.4% in June 2019 compared to 16.4% as at December 2018. Our comprehensive cost optimisation programme, the Long-Term Efficiency Acceleration Programme (LEAP), has begun to yield dividends across board with operating expenses declining by 4% to ₦37.5 billion compared to ₦39.2 billion in H1 2018. We believe LEAP will continue to deliver material cost savings through 2019 and beyond, supporting our Cost-to-Income Ratio (CIR) ambition.”
Established in 1917 and listed on the Nigerian Stock Exchange in 1971, Union Bank is a household name and one of Nigeria’s long-standing and most respected financial institutions. The Bank has a network of over 300 Sales and Service Centres across Nigeria.
Following recapitalisation in 2012 from new investors and a new Executive Management team, Union Bank has undergone an award winning transformation programme to re-establish the bank as a leading provider of financial services in Nigeria. Union Bank is focused on Retail, Commercial and Corporate Banking businesses. In addition to standard current and savings product portfolio, Union Bank has launched pioneering products into the Nigerian retail market including UnionKorrect, UnionGoal and UnionBetta.
