Finance

Union Bank Grows Profit to N24.4bn in 2019

Published

4 years ago

March 6, 2020

Union Bank Grows Profit to N24.4bn in 2019

Union Bank of Nigeria Plc on Thursday reported N24.7 billion profit before tax for the financial year ended December 31, 2019.

This was 33 percent higher than the N18.7 billion recorded in the same period of 2018.

In the financial statements released through the Nigerian Stock Exchange (NSE), the lenders’ gross earnings surged by 14 percent from the N140.1 billion reported for the financial year ended 2018 to N159.9 billion in 2019. The bank attributed the increase to an increase in earning assets.

Similarly, interest income rose by 11 percent to N116.5 billion during the period under review, up from N104.8 billion filed in 2018. Total net interest income before impairment expanded by 1 percent to N51.7 billion in 2019, up from N50.9 billion achieved in 2018.

While non-interest income grew by 23 percent from N35.3 billion in 2018 to N43.3 billion in 2019, largely driven by the surged in fees and commission income as well as recoveries.

The bank’s net operating income was up by 6 percent during the period under review to N95.5 billion, up from N89.7 billion recorded in 2018. Also, the lender was able to manage operating expenses through a cost-effective optimization programme, therefore operating expenses declined by 0.4 percent from N71 billion in 2018 to N70.8 billion.

Gross loans rose by 20 percent from N496.8 billion in 2018 to N595.3 billion in line with the bank’s drive to create quality risk assets across key economic segments.

Accordingly, customer deposits climbed 5 percent to N886.3 billion in the 2019 financial year, up from N844.4 billion filed in 2018.

Speaking on the bank’s performance, Emeka Emuwa, the CEO, Union Bank said: “The Bank’s strong overall performance has paved the way for a critical milestone. With the approval of the Central Bank of Nigeria, the Board of Directors will recommend a dividend payment to shareholders for the first time in over a decade. Returning value to our shareholders has been at the core of Union Bank’s transformation and continuous drive to become a leading financial institution in Nigeria.

“The Bank delivered a solid set of results for full year (FY) 2019, recording growth across the major income lines. The top-line revenue at ₦159.9bn is up 14% from ₦140bn in 2018. Profit Before Tax (PBT) increased by 33% from ₦18.6bn in 2018 to ₦24.7bn for the year.

“Core to our earnings has been the conscientious growth of our loan book. The Bank booked ₦98bn in new loan assets in the course of the year reflecting a 20% growth to close at ₦595.3bn in Gross Loans.

“As a result of our larger loan book and intensified recovery efforts, Non-Interest Income grew by 23% from ₦35.3bn to ₦43.3bn in the period with recoveries accounting for ₦8.8bn of the total amount.

“Consistent with our vision to be Nigeria’s ‘most reliable and trusted banking partner,’ we are optimizing our business model to focus solely on Nigeria where we continue to invest and thrive. Consequently, we have made the strategic decision to divest of our UK subsidiary, Union Bank UK which will enable us focus on the distinct long-term opportunities in the Nigerian market. The divestment is expected to conclude in 2020 subject to regulatory approvals in Nigeria and the UK.”

He added that “In 2020, we will continue to focus on bottom-line initiatives that will build on our success in 2019. We are promoting synergy across our businesses and functions to ensure alignment with and on our strategic objectives.”

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Samed Olukoya

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Banking Sector

UBA, Access Holdings, and FBN Holdings Lead Nigerian Banks in Electronic Banking Revenue

Published

18 hours ago

April 24, 2024

Samed Olukoya

United Bank for Africa (UBA) Plc, Access Holdings Plc, and FBN Holdings Plc have emerged as frontrunners in electronic banking revenue among the country’s top financial institutions.

Data revealed that these banks led the pack in income from electronic banking services throughout the 2023 fiscal year.

UBA reported the highest electronic banking income of N125.5 billion in 2023, up from N78.9 billion recorded in the previous year.

Similarly, Access Holdings grew electronic banking revenue from N59.6 billion in the previous year to N101.6 billion in the year under review.

FBN Holdings also experienced an increase in electronic banking revenue from N55 billion in 2022 to N66 billion.

The rise in electronic banking revenue underscores the pivotal role played by these banks in facilitating digital financial transactions across Nigeria.

As the nation embraces digitalization and transitions towards cashless transactions, these banks have capitalized on the growing demand for electronic banking services.

Tesleemah Lateef, a bank analyst at Cordros Securities Limited, attributed the increase in electronic banking income to the surge in online transactions driven by the cashless policy implemented in the first quarter of 2023.

The policy incentivized individuals and businesses to conduct more transactions through digital channels, resulting in a substantial uptick in electronic banking revenue.

Furthermore, the combined revenue from electronic banking among the top 10 Nigerian banks surged to N427 billion from N309 billion, reflecting the industry’s robust growth trajectory in digital financial services.

The impressive performance of UBA, Access Holdings, and FBN Holdings underscores their strategic focus on leveraging technology to enhance customer experience and drive financial inclusion.

By investing in digital payment infrastructure and promoting digital payments among their customers, these banks have cemented their position as industry leaders in the rapidly evolving landscape of electronic banking in Nigeria.

As the Central Bank of Nigeria continues to promote digital payments and reduce the country’s dependence on cash, banks are poised to further capitalize on the opportunities presented by the digital economy.

Loans

Nigeria’s $2.25 Billion Loan Request to Receive Final Approval from World Bank in June

Published

2 days ago

April 23, 2024

Samed Olukoya

Nigeria’s $2.25 billion loan request is expected to receive final approval from the World Bank in June.

The loan, consisting of $1.5 billion in Development Policy Financing and $750 million in Programme-for-Results Financing, aims to bolster Nigeria’s developmental efforts.

Finance Minister Wale Edun hailed the loan as a “free lunch,” highlighting its favorable terms, including a 40-year term, 10 years of moratorium, and a 1% interest rate.

Edun highlighted the loan’s quasi-grant nature, providing substantial financial support to Nigeria’s economic endeavors.

While the loan request awaits formal approval in June, Edun revealed that the World Bank’s board of directors had already greenlit the credit, currently undergoing processing.

The loan signifies a vote of confidence in Nigeria’s economic resilience and strategic response to global challenges, as showcased during the recent Spring Meetings.

Nigeria’s delegation, led by Edun, underscored the nation’s commitment to addressing economic obstacles and leveraging international partnerships for sustainable development.

With the impending approval of the $2.25 billion loan, Nigeria looks poised to embark on transformative initiatives, buoyed by crucial financial backing from the World Bank.

Banking Sector

FMBN Set for Commercialization to Improve Affordable Mortgage Financing

Published

3 days ago

April 22, 2024

Samed Olukoya

In a bid to bolster housing delivery efficiency and enhance affordable mortgage financing for Nigerians, the Federal Mortgage Bank of Nigeria (FMBN) is gearing up for commercialization.

This move comes as part of the Nigerian government’s efforts to address the housing deficit and ensure adequate shelter for its citizens.

The Managing Director of FMBN, Shehu Osidi, made this announcement during a courtesy visit by the Federal Housing Delivery Reforms Task Team at the bank’s headquarters in Abuja.

Led by Mr. Adedeji Adesemoye and Brig. Gen. Tunde Reis, the task team discussed strategies to revitalize the housing sector, with a focus on FMBN’s pivotal role in providing affordable mortgage financing.

Osidi explained the bank’s commitment to supporting the government’s agenda of reforming and improving the housing sector, which is vital for sustainable development and enhancing citizens’ quality of life.

He underscored FMBN’s significant journey in the history of mortgage and housing finance in Nigeria and expressed optimism about the forthcoming commercialization process.

The commercialization plan involves repositioning and recapitalization efforts, following extensive engagements with the Bureau of Public Enterprise (BPE).

Osidi stressed the importance of aligning the bank’s operations with its mandate of affordable mortgage financing, ensuring that it remains a reliable partner in the quest for accessible housing solutions.

As part of its strategic blueprint, FMBN has prioritized various initiatives to enhance service delivery and operational efficiency.

Of note is the ICT project aimed at upgrading core banking applications that is almost complete and promised to revolutionize customers’ experience.

Also, amendments to the FMBN and NFH Acts are underway in the National Assembly, addressing key areas to facilitate the bank’s transformation.

Despite challenges, including performance issues with estate development loans, FMBN is determined to overcome obstacles and achieve its objectives.

The commercialization plan aligns with broader efforts to deepen reforms and foster a remarkable turnaround in the housing sector.

By focusing on process automation, cost efficiency, credit quality enhancement, and strategic partnerships, FMBN aims to catalyze sustainable growth and address the nation’s housing needs effectively.

Chairman of the Federal Housing Reforms Task Team, Adedeji Adesomoye, reiterated the committee’s mandate to review the operations and governance structures of key housing institutions.

With ambitious targets set by the government, including the construction of 20,000 housing units in 2024 and 50,000 units in subsequent years, the commercialization of FMBN marks a pivotal step towards realizing Nigeria’s housing aspirations.

As the commercialization process unfolds, FMBN stands poised to play a central role in facilitating access to affordable mortgage financing, thereby contributing to the realization of homeownership dreams for millions of Nigerians.