Emeka Emuwa, CEO, Union Bank


Despite the challenging operating environment, Union Bank succeeded in increasing its profit-before-tax by four per cent to ₦12.1billion in the first six months of 2019 and the post-tax profit was up 3.45 per cent to ₦11.85 billion.

It half year result sent to the Nigerian Stock Exchange (NSE) on Monday showed that the lender’s gross earnings dropped nine per cent to ₦76.0 billion, compared to ₦83.3billion in H1 2018, due to a decrease in average earning assets.

A breakdown of its revenue showed that interest income dipped 8 per cent to ₦57.3billion (₦62.2bn in H1 2018), while non-interest income decreased 12 per cent to ₦18.7billion (₦21.1 billion in H1 2018); attributed to the volatility negatively impacting trading income, despite a 27 per cent growth in credit-related fees and 169 per cent growth in cash recoveries at N5.3 billion (N1.9 billion in H1 2018)

Also, net operating income slipped slightly down 2 per cent to ₦49.6billion (₦50.9 billion in H1 2018), but the bank was able to cut down its operating expenses by 4 per cent to ₦37.5 billion (₦39.2 billion in H1 2018) through its cost optimization programme – Project LEAP.

While it grew gross loans by 8 per cent to ₦563.0bn (₦519.7 billion Dec 2018), driven by increased risk asset creation across priority economic sectors, its customer deposits also increased 4 per cent to ₦889.5 billion (₦857.6 billion December 2018).

Commenting on the results, Emeka Emuwa, CEO said: “Notwithstanding the realities of operating in a challenging economic environment, the Group delivered a 4 per cent 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.”

Chief Financial Officer of the bank, Joe Mbulu on the other hand stated, “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 per cent from 8.1 per cent 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.”


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