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Union Bank of Nigeria Plc on Tuesday April 2, 2019, released its full year audited account for the period ended December 31, 2018 with an improvement, as profit growth was sustained. The result shows that profit before tax was up by 33 percent to N18.5 billion which is above N13.9 billion that was recorded same period in 2017. Profit after tax was also up by 39 percent to N18 billion as against N13 billion that was posted in 2017.
Just as customers deposit during the period under consideration went up to N857.6 billion which is above N802.4 billion in 2017, showing an increase of 7 percent. Other highlight of the financial statement shows Non performing loan was down to 8.1 percent from 20.8 percent in 2017.
Net revenue after impairments was up by 16 percent to N93.5 billion when compared to N80.64 billion in 2017. Operating expenses went up from N66.7 billion in 2017 to N75 billion in 2018. However due to the 8 percent drop in loan book, the bank gross earnings was impacted, as it went down by 11 percent to N145 billion from N168 billion in 2017. Earnings per share stood at 61 kobo as against 72 kobo in 2017.
Commenting on the group result, the Managing Director / Chief Executive Officer Emeka Emuwa explained that the bank priorities in 2018 were three pronged; enhancing our productivity across board; tightening up our loan portfolio, especially resolving key large exposures which drove NPLs up significantly at the end of 2017; and optimizing the Bank’s capital and funding base.
In his words “I am pleased to report that we made significant strides in each focus area. Notwithstanding a depressed economic environment and a challenging operating landscape, our efforts to optimise productivity delivered results. Union Bank’s Group Profit Before Tax (PBT) is up 33% to ₦18.5 billion in 2018 from ₦13.9 billion in 2017. As consumer confidence in the brand continues to grow, customer deposits also continue to grow, up 7.3% to ₦857.6 billion in 2018 from ₦802.4 billion in 2017”.
He noted that “Our Net Revenues After Impairments are also up 16% to ₦93.5bn compared to ₦80.6bn in 2017 with significant contribution from growth in retail transaction volumes across our channels. Through an aggressive focus on recoveries and recognising fully provisioned loans on our books, we successfully reduced the Bank’s NPL ratio, which is now down to 8.1% in 2018 from 20.8% at the end of 2017, in line with guidance provided at the start of the year. In 2019, we will continue to maintain focus on recoveries while prudently rebuilding our loan book and maintaining a conservative risk profile”.
Pointing out that on the funding side, they successfully initiated the first tranche of the bank oversubscribed local currency bond programme to raise ₦13.5 billion. According to him “We are encouraged by the market and investor community response to the bond issue and subsequent listing on the FMDQ platform as we continue our drive to optimize the Bank’s capital and funding structure. In 2019, we will double-down on our productivity efforts to deliver our financial targets”.
Emuwa concluded that “We are harnessing synergies across our business segments to ensure we maximize opportunities across entire value chains, while centralising key business and operational functions for better efficiency, and prioritizing customer experience across all our touch points. We are also pleased to be introducing our women focused initiative, αlpHer, which will provide a portfolio of financial and non-financial services to women across customer segments in Nigeria. Lastly, we have commenced the Long-Term Efficiency Acceleration Programme (LEAP), a comprehensive transformation effort to embed cost discipline across the Bank. We believe LEAP will deliver significant cost savings in 2019 and entrench a culture of efficiency across all areas of the Bank.” on the part of Joe Mbulu, the Chief Financial Officer, “Gross revenues declined by 11% to ₦145.5 billion in 2018 from ₦163.8 billion in the previous year as a direct consequence of the loan book clean-up and resolution of key exposures. Notwithstanding significant investments to execute our strategy including expanding our agency banking footprint and aligning compensation with market for our entry to mid-level employees (which increased operating expenses by 12% from ₦66.7bn in 2017 to ₦75.0bn as at December 2018), we are pleased that our core business delivered a 33% growth to our topline PBT. Through LEAP, we will ensure that operating expenses in 2019 remain within the Bank’s targets”.adding that the bank Return on Tangible Equity (ROTE) improved to 9.6% from 6.2% in 2017 demonstrating long-term shareholder value enhancement. In addition to our successful fund raising activities during the year, we will further support future growth and creation of high quality risk assets in 2019 through a Tier II capital raise. This will boost our Capital Adequacy Ratio, which is currently at 16.4% and remains above the regulatory limit.
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 Centers 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.
Photo Caption: Managing Director / Chief Executive Officer Of Union Bank of Nigeria Plc, Emeka Emuwa
