Seemberg News

Latest Nigeria Business News

Union Bank’s profit increases by 4%

Share:

Union Bank Nigeria Plc has announced a four per cent growth in its profit for the six-month period ended June 30, 2019.

In its unaudited financial statement, which was made available to the Nigerian Stock Exchange, the bank said its profit grew from N11.7bn in 2018 to N12.1bn in 2019.

It said its gross earnings declined by nine per cent to N76bn from the N83.3bn recorded in H1 2018, due to a decrease in average earning assets.

An analysis of the financial statement showed that interest income dropped by eight per cent to N57.3bn from N62.2bn, while net interest income after impairment increased by three per cent to N30.5bn from N29.7bn in 2018, which the bank said was supported by an aggressive drive in collections.

It said due to muted volatility negatively impacting trading income, non-interest income declined by 12 per cent to N18.7bn, despite a 27 per cent growth in credit-related fees and 169 per cent growth in cash recoveries at N5.3bn.

A four per cent reduction in operating expenses reflected the gains of the bank’s cost optimisation programme – Project LEAP.

Loans, driven by increased risk asset creation across priority economic sectors, increased by eight per cent to N563bn while customer deposits increased by four per cent to N889.5bn.

The bank said the increase in its customer deposits demonstrated the success of the on-going acquisition of low-cost deposits driven by strengthened brand affinity.

The Managing Director/Chief Executive Officer, Union Bank, Emeka Emuwa, said, “Notwithstanding the realities of operating in a challenging economic environment, the group delivered a four per cent growth in profit before tax.

“To sustain growth in earnings, we remained steadfast in our commitment to deliver 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 eight per cent to N563.0bn, compared to year-end 2018.”

Emuwa stated that the bank’s ability to take on more risk was hinged on its robust risk management and debt recovery processes working in sync, which led to recoveries of over N5bn in the period.

He noted that the bank had successfully closed its Series 3, 10-year N30bn bond in June, as part of its N100bn debt capital programme.

According to him, the series further reinforced the confidence of the investor community in Union Bank as it was fully subscribed, being the largest 10-year bond issued by a Nigerian corporate to date.

Emuwa said with the new injection of Tier 2 capital, the bank was well positioned to deliver on its growth strategy and priorities.

He noted that looking ahead, the company would continue to focus on opportunities to deliver simpler and smarter banking promise to its customers while improving internal operational efficiencies that would translate to enhanced shareholder value.

The Chief Financial Officer, Union Bank, Mr Joe Mbulu, said, “With our aggressive focus on recoveries and improving asset quality, the bank’s non-performing loan ratio has continued its downward trend, declining to 7.3 per cent from 8.1 per cent as of December 2018, ahead of full year 2019 guidance.

He stated that the improvement in asset quality enabled the bank to grow its loan book optimally in the first half of 2019, positioning it with the ability to take on emerging opportunities in key sectors of the economy.

Previous Article

E-Tranzact makes N30tn data transactions

Next Article

Wapic’s gross written premium hits N8.7bn in Q2

You may also like

Leave a Reply

Your email address will not be published. Required fields are marked *