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Banking Sector

Union Bank Reports 10% Decline in Profit After Tax in 2021

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Union bank - Investors King

Union Bank Plc reported a 10% decline in profit after tax from N18.672 billion filed in 2020 to N16.919 billion in the financial year ended December 31, 2021.

The bank disclosed this in its audited financial statement obtained by Investors King.

Net operating income after impairments dropped by 3.6% from N103.4 billion recorded in 2020 to N99.7 billion in the period under review.

Union Bank 2021 Financial Highlights:

● Gross earnings: up 8.9% to ₦175.0bn (₦160.7bn in FY 2020), driven by strong noninterest income.

● Non-interest income: up 26.7% to ₦55.7bn (₦44.0bn in FY 2020) driven by significant increases in debt recoveries.

● Net operating income after impairments: down 3.6% to ₦99.7bn (₦103.4bn in FY 2020).

● Profit before tax: down by 19.3% to ₦20.5bn (₦25.4bn in 2020).

● Operating expenses: marginally grew by 1.5% to ₦79.1bn (₦78.0bn in FY 2020), reflecting tight cost control despite inflationary pressures.

● Gross loans: up 22% at ₦899.1bn (₦736.7bn in Dec 2020) as we expand our lending to key economic sectors of opportunity.

● Customer deposits: up 20.4% at ₦1.4trillion (₦1.1 trillion in Dec 2020) as we continue to expand our product base and digital channels.

Commenting on the results, Emeka Okonkwo, CEO said: “Following an enhancement to our operating and go-to-market model to deliver better performance and efficiency leveraging our network across the regions, we are increasing our customer engagement and product penetration which is translating into higher customer revenues across geographies.

“On the back of this, the Bank has continued to record headline growth by diversifying our income streams and accelerating our recoveries programme.

“For the full year, our gross earnings grew by 8.9% from N161bn to N175bn, while our net operating income after impairments dropped by 3.6% to N99.7bn from N103.4bn. Interest income grew by 1% as our earnings asset base expanded with a growing loan book.

“We continued our strong growth in non-interest income through a combination of aggressive recoveries, which grew 119% in the period, from N7.2bn to N15.9bn and further growth in fee and commission income (33%) and e-business (26%). These were delivered on the back of sustained multi-channel growth in users, volume and value across our digital and agent channels. Total active UnionMobile users now stands at 3.3 million, up 20% while our Union360 customer base grew by 22% to 26,400.

“In 2022, the Bank will continue to focus on broadening and deepening the strong foundations we have built, while enhancing our digital delivery platforms and service propositions to customers. We remain deeply thankful to our erstwhile core investors, Union Global Partners and Atlas Mara who have been instrumental to our journey since 2012. Their invaluable support and expertise helped steer the Bank through turbulent waters and into an era of
growth and stability. As we turn a new chapter for our Bank with a new core investor expected to come on board,
we are proud of the solid foundation built over the last ten years and look forward to a seamless transition and continued successes in the future.”

Speaking on the FY 2021 numbers, Chief Financial Officer Joe Mbulu said: “We maintained very strong cost controls during the year despite the inflationary pressures and the translation effect of currency depreciation on our cost base. Operating expenses increased marginally by 1.5% with increasing regulatory, depreciation and amortisation costs.

“Customer deposits grew by 20% while our loan book grew by 22% from N736.7bn to N899.1bn, as we deepened support for key sectors in the economy. We have been remained proactive in the way we manage our growing risk assets, maintaining our asset quality during the year with our NPL ratio growing marginally from 4% to 4.3%.”

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

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Banking Sector

FirstBank Rewards Customers in Its Firstmobile Cash-out Promo

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In collaboration with Interswitch, FirstBank has launched a promo to reward users of the FirstMobile app, its industry-leading mobile banking application. The promo tagged FirstMobile Cash-out Promo will run for 3 months. The promo, which started on Monday, 21st March 2022 will end on Tuesday, 21st June 2022.

Various prizes including, N1,000,000, N40,000, N10,000.00 cash prizes, N40,000 Airtime, LED Televisions, refrigerators, washing machines, air conditioning systems will be won in the course of the three months campaign. A minimum of two bills payment worth N1000 and five airtimes of at least a total of N2000 in a week qualify a customer for any of the prizes. The promo is open to new customers and existing users of the FirstMobile app.

FirstMobile customers who do a minimum of 6 transactions weekly on the FirstMobile app, will be eligible for the respective rewards: N10,000 cash for 200 winners; Gift items (TVs, Refrigerators and AC) for 10 winners; N10,000 airtime for 340 winners.

On the other hand, 500 customers that carry out a minimum of 10 transactions monthly will win N30,000 cash. The Grand Prize of N1,000,000 will be won by 2 lucky customers who carry out a minimum of 20 transactions or a minimum of two bills payment of N1000 plus five airtime transactions of at least a total of N5000 in a week.

Speaking on the campaign, Chuma Ezirim, FirstBank’s Group Executive, e-Business & Retail Products said, “as the leading financial inclusion services provider in Nigeria, we are delighted to partner with Interswitch, an Africa-oriented technology-driven company, to reward our customers for their continuous patronage. Together with Interswitch, we remain committed to ensuring the continued safety of customers’ funds across multiple electronic payment channels irrespective of where our customers may be across the world. FirstMobile remains another obvious step towards leveraging evolving technologies to bring fast and convenient digital banking solutions to our customers”.

FirstMobile is built to reflect FirstBank’s resolve at reinforcing the digitisation of payment systems, whilst putting customers at an edge to conveniently meet their everyday needs at any time, irrespective of where they are. The app provides convenient access to both financial and non-financial transactions by FirstBank account holders via their mobile devices. It is sleek and convenient to use – evident in its easy enrolment process as all FirstBank customers with Verve and Naira Mastercards can begin using the app without having cause to visit a FirstBank branch. It is also poised to offer a more reliable and more convenient overall digital banking experience.

To set up the FirstMobile app, customers with android phones should visit the Google Play store to download and install the FirstMobile app. Customers with Apple devices can download it from the Apple Store. Once installed, customers are required to open the app, tap the register button, and use their FirstBank issued Naira MasterCard or Verve card to activate the app. After details have been inputted, an OTP code will be sent via an SMS to your phone number that is linked to your bank account and you are then required to Input a 5 digits code that will be your login password, select two security questions and answer them, create a personalised 4 digits transaction pin that will help your confirm transactions. Upon the conclusion of these steps above, click Done and start enjoying the app.

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Banking Sector

CBN Issues Directive For Open Banking to Improve Financial Services

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Central Bank

In an effort to stimulate innovation and widen the range of financial products and services available to banks’ customers, the apex regulatory bank, the Central Bank of Nigeria (CBN), has established the legal framework for Open Banking in Nigeria.

This was revealed in a circular titled ‘Operational guidelines for open banking in Nigeria’ which was obtained by Investors King.

The Regulatory Framework for Open Banking in Nigeria, according to the CBN, establishes standards for data sharing across the banking and payments systems in order to stimulate innovation and expand the range of financial products and services available to bank customers.

According to the CBN, the financial sector data guideline would allow clients to access innovative financial products and services.

The Apex bank said: “Open banking recognises the ownership and control of data by customers of financial and non-financial services, and their right to grant authorisations to service providers to access innovative financial products and services. This is anticipated to drive competition and improve access to banking and payments services”.

The CBN also added that participants in open banking shall adhere strictly to security standards when accessing and storing data, and shall be subject to minimum privacy standards, operational standards, risk management standards and customer experience standards as prescribed by the Bank.

According to the CBN, any organization with customer data that may be transferred with other businesses in order to deliver innovative financial services within Nigeria is eligible to participate in the Open Banking ecosystem.

Open banking is a banking practice in which banks and non-bank financial organizations provide third-party financial service providers open access to customer banking, transaction, and other financial data via application programming interfaces (APIs).

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Banking Sector

FY 2021: Unity Bank Grosses N50.28bn in Earnings and N3.33bn in Profit

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Unity bank - Investors King

Unity Bank Plc has declared a profit before tax of N3.33 billion in the financial year ended December 2021, indicating a 49.9 percent increase from the N2.22 billion it recorded in 2020.

Similarly, a review of the lender’s 2021 full-year result filed with the Nigeria Exchange Group showed a significant improvement in its bottom line as Profit after tax rose by 52.1 percent to N3.17 billion from N2.09 recorded in the corresponding period of 2021.

The bank also grew gross earnings, rising by 8.1 percent to N50.28 billion from N46.52 billion in 2021.
This comes on the heels of a faster than expected recovery from the disruptions of the COVID-19 pandemic, which provided an opportunity for the lender to expand its retail footprint through strategic product offerings that appealed to broader segments of the market.

Another key highlight of the agribusiness-focused lender’s financial performance is the growth of its assets, which rose by 9.5 percent to close at N538.87 billion from N482.02 billion in 2020, cumulating three years of consecutive high growth.

Equally, the Bank grew assets by 39 percent and 67.9 percent in 2019 and 2020 respectively to see a rebound with an even greater resurgence in the lender’s profitability for two successive years.

Also, in the year under review, the lender grew its loan portfolio significantly, increasing by 33.2 percent to N269.27 billion from N202.08 billion, following the Bank’s aggressive focus on boosting its liquid assets base.

Another top-line performance of the audited financial statements recorded was growth in the lender’s net operating income, which rose to N28.41 billion from N21.3 billion in the corresponding period of 2020, representing a 10.9 per cent increase. This is even as the net interest income recorded a significant jump by 12.2 percent to N20.05 billion from N17.74 billion in the corresponding period of 2020. Earnings per Share closed at 27.15 Kobo.

Commenting on the result, the Managing Director/CEO, Unity Bank Plc, Mrs. Tomi Somefun, stated that the key performance indicators have continued on a trajectory of healthy balance sheet growth, asset quality and profitability achieved on the back of deft diversification of the Bank’s earnings base that balances out fairly in asset creation, investments and trade activities and riding on the innovative customer-centric product offerings for both the retail and consumer segments of the market.

She shared the optimism that given the increased focus of the Bank on growing its retail footprints supported by significant investment being made in technology to expand its digital banking space, the growing contribution of the channels and platforms delivery will further boost the multiple streams of income in the coming years.

She further stated, “the Bank’s growing profile in Agribusiness has now placed it on a pedestal that enables it to attract significant value chain businesses for the continuous growth of its Retail and SME Banking whilst the Bank consistently deploys product development/marketing initiatives to further grow the brand franchise, maximise the benefits and boost retail growth to double digits”.

Overall, positive sentiments around the repositioning of the Bank and the outcome continue to dominate opinion among analysts as informed by the outlook for the future and as market confidence continues to improve.

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