Union Bank Grows Profit to N24.4bn in 2019

• 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.”