Emeka Emuwa, CEO, Union Bank

Union Bank improved its profit before tax by ₦15.9billion in the first nine months of the year, compared with ₦15.5billion it made in the corresponding period in 2019, its financial result released on Wednesday has shown.

It grew gross earnings by 6% to ₦118.8bn (from ₦111.9bn in 9M 2019), driven by an increase in earning assets, while interest income went up marginally 1% to ₦85.4billion (from ₦84.9bn in 9M 2019).

Also, non-interest income rose 23% to ₦33.4bn instead of ₦27.1bn made in Q3 2019), supported by increased trading income and asset revaluation gains as net operating income increased 1% to ₦69.3bn (from ₦68.7bn in 9M 2019).

Meanwhile, operating expenses was flat at ₦53.4bn (from ₦53.2bn in 9M 2019), despite currency depreciation, inflationary pressures and unplanned Covid-19 related expenses.

The bank’s gross loans increased by 14% to ₦678.0billion (from ₦595.3bn in Dec 2019), while customer deposits went up 28% to ₦1.1trillion (from ₦886.3bn in Dec 2019).

 Commenting on the results, Emeka Emuwa, CEO said: “Notwithstanding the realities of a tougher operating environment arising from the ripple effects of the Covid-19 pandemic, the Bank delivered a 6% growth in gross earnings from ₦111.9 billion in 9M 2019 to ₦118.8 billion in 9M 2020. In addition, net interest income before impairment rose by 15% to ₦41.7 billion, while non-interest income grew by 23% to ₦33.4 billion.

“We reached a major milestone as our customer deposits crossed the ₦1 trillion mark this quarter, growing by 28% to ₦1.1 trillion compared to ₦886.3 billion at the end of 2019. This reflects increasing customer loyalty and our intense retail drive. Our customer acquisition strategy has been reinforced by the versatility of our digital platforms and channels which continue to drive customer satisfaction.

“The civil unrest which erupted in October and led to significant destruction of property and small businesses across the country, will have real impact on business and the operating environment; and even as restrictions have eased, Covid-19 also remains a present threat in our day to day operations.

 Heading into the final stretch in 2020, our overarching commitment is to the health and wellbeing of our employees and the safety of our customers. Showing up for our communities is also at the core of who we are and therefore we will work with our partners and through our corporate citizenship initiatives to support individuals, businesses and our communities where we operate as we begin to rebuild and heal as a country.”

Chief Financial Officer, Joe Mbulu said: “Our operating expenses were relatively flat year-on-year at ₦53.4 billion, compared to ₦53.2 billion in 9M 2019 despite inflationary pressures on cost and higher regulatory costs. This reflects continuing focus on cost management.

“Our asset quality continues to improve with Non-Performing Loans (NPLs) down to 3.6% from 5.8% as at December 2019, supported by ongoing efforts to diversify our loan book to include viable businesses and households. Our Capital Adequacy Ratio remains robust at 19.5%, well above the regulatory threshold.

“With the $40 million (USD) financing secured from the International Finance Corporation for on-lending to trade finance customers, we are continuing to expand our funding engagements with DFIs to support our strategic business initiatives.

For the rest of the year, we remain focused on our business priorities in the face of the Covid-19 challenge and will continue to leverage increasing customer loyalty, stronger digital platforms and channels as well as solid risk management structure to deliver on our objectives.”