Union Bank’s reassures shareholders with N15.6bn PBT growth
The growth posted by Union bank of Nigeria (UBN) in its recently released third quarter or nine months unaudited results has, once again, reassured shareholders of the board’s commitment to continually deliver value.
The growth posted in key performance indices, including operating expenses, customers deposits, gross loans, amongst others, further reinforces value delivery and bind on giving stakeholders greater returns on their investment.
Group Unaudited Financial Statements for the Nine Months Ended September 30, 2019 released by the Nigerian Stock Exchange (NSE) yesterday, showed that Profit before tax (PBT) rose by 5 per cent to ₦15.6b form ₦14.9billion posted in the corresponding period of 2019.
Gross earnings however dropped by 4 per cent to ₦117.2billion, against ₦122.2bn in 2018 Q3. The decline was driven by decrease in average earning assets
While interest income dipped by 2 per cent to ₦90.0billion, against ₦91.5billion in 2018 Q3,Net interest income after impairment soared by 6 per cent to ₦44.3billion, against ₦42.0bn in te corresponding period of 2018.
The boost in Net interest income was propelled the impact of collections on impaired facilities
· Non-interest income: down 12% to ₦27.1bn (9M 2018 – ₦30.7bn) driven by reduced market volatility in 2019 which had an impact on trading income. Cash Recoveries was up 114% to N8.4bn (9M 2018 – N3.9bn)
The Union bank’s Q3 2019 result further showed that, Net operating income dropped by 2 per cent to ₦71.4bn, from ₦72.7bIillion recorded in the corresponding period of 2018.
The result showed that Operating expenses dropped by 3 per cent to ₦56.2billion, against ₦58.0bn in Q3 2018, driven by the bank’s sustained cost optimisation programme.
Also, gross loans were lifted by 9 per cent to ₦566.5billion, while in December 2018, gross loans closed the year at ₦519.7billion. The rise in loan portfolio was driven by increased risk asset creation across priority sectors in the economy
Customer deposits for the period ended September 30, 2019 rose by 4 per cent to ₦892.9billion, a leap form ₦857.6billion recorded in December 2018, thus reflecting Union Bank’s continuing acquisition of low-cost deposits driven by strengthened brand affinity
The Group CEO, Union Bank, Emeka Emuwa, commenting on the result, said: “Profit Before Tax (PBT) for the Group is up to ₦15.6bn, a 5% increase over the same period in 2018.
Our continued focus on consumer centric service and product propositions is yielding solid results, contributing to a 28% growth in our electronic channels fee income which is at ₦5.6bn for the period. Our debt recovery drive continues to record successes with ₦8.4bn of recoveries year to date.
In line with our stated business objectives, we are continuing to grow our asset book by creating quality risk assets in targeted sectors. This has led to a 9% growth in our loan portfolio to ₦566.5bn compared to N519.7bn at year-end 2018.
Going into the rest of the year, our ambition remains to deliver superior customer experience across all customer touchpoints.”
Chief Financial Officer, Joe Mbulu, speaking on the 9M 2019 numbers, said: “While we had a slight decline in Gross Earnings for the Group from ₦122.2bn to ₦117.2bn in 2018, our efficiency initiatives, including the deployment of Robotics Process Automation as well as our cost optimisation programme, ensured we delivered 4% growth in Profit After Tax (PAT), recording ₦15.2bn compared to ₦14.7bn in the prior year period.
He noted that Union bank’s operating expenses reduced by 3% to ₦56.2bn from ₦58.0bn in 9M 2018 and the Bank’s customer-related non-interest revenue drivers remained strong with net fee and commission income growing 10% to ₦9.5bn from ₦8.7bn for the corresponding period in 2018.
“We continue to maintain adequate levels of capital with our Capital Adequacy Ratio (CAR) at 17.8% which is above the regulatory threshold. Non-Performing Loans (NPLs) declined to 8.0% from 8.7% as at year-end 2018”.