Union Bank posts N12.1b H1 profit, deposits up 4 per cent
In the unaudited report, released yesterday, UBN’s gross earnings declined nine per cent to ₦76.0 billion against ₦83.3 billion in H1 2018, due to a decrease in average earning assets. The Interest income was also down eight per cent to ₦57.3 billion from 62.2 billion a year earlier.
The bank’s Net interest income after the impairment was up three per cent to ₦30.5 billion above ₦29.7 billion in H1 2018; supported by an aggressive drive in collections.
UBN informed that its non-interest income was down by 12 per cent to ₦18.7 billion from ₦21.1 billion, due to muted 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 against N1.9 billion in the corresponding period of 2018.
The firm’s net operating income was slightly down two per cent to ₦49.6 billion from ₦50.9 billion. The operating expenses were also down four per cent to ₦37.5 billion against ₦39.2 billion a year ago, reflecting the gains from the cost optimisation programme, Project LEAP.
Driven by increased risk asset creation across priority economic sectors, UBN’s gross loans rose eight per cent to ₦563.0 billion compared with ₦519.7 billion in December 2018, driven by increased risk asset creation across priority economic sectors.
UBN said its customer deposits increased four per cent to ₦889.5 billion from ₦857.6 billion December 2018, demonstrating the success in the on-going acquisition of low-cost deposits driven by strengthened brand affinity.
Commenting on the results, UBN Chief Executive Officer, Emeka Emuwa, said: “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 years ₦30 billion bonds 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.”
From his perspective, 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.
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