Union Bank's profit rises 39 per cent to N13 billion

28 Oct 2016
Financial Nigeria


The bank said its revenue rose by 12 per cent to N93.43 billion.

Emeka Emuwa, Group Managing Director/CEO, Union Bank Plc

Union Bank of Nigeria reported that its after-tax profit rose by 39 per cent year-on-year to N13.01 billion during the nine-month period ended on September 30, 2016. The bank said the rise in its profit was driven mainly by an uptick in interest income and the growth of its retail customer base.

“We are encouraged by this performance which comes in the face of a recessionary environment, increased impairments and headwinds in our trade business due to scarcity of foreign exchange,” said Emeka Emuwa, Union Bank’s Group Managing Director/CEO. “Our steady effort to build a low cost, customer centric retail business over the past 18 months is demonstrating results and continues to win us a new, growing retail customer base.”

Union Bank said its revenue rose by 12 per cent to N93.43 billion, from N83.72 billion posted a year earlier, as non-interest income rose by 35 per cent to N22.47 billion and interest income rose by 6 per cent to N70.96 billion.

“Our revenues are up across board and the Bank’s asset yields improved from 14.2 per cent to 16.1 per cent when compared to same period in 2015,” said Oyinkan Adewale, Union Bank’s Chief Financial Officer. “Our non-interest revenue is up 27 per cent, excluding one-time gains, on the back of treasury and channel banking revenues in the retail business.”

For the period under review, Union Bank said its total assets rose by 17 per cent to N1.22 trillion from N1.05 trillion recorded in December 2015. The rise in total assets resulted mainly from a 37 per cent increase in the bank’s loan book arising from the devaluation of the naira. The bank said non-performing loan ratio rose to 9.4 per cent from 7 per cent posted in December 2015.

“We continue to manage our cost of funds, resulting in 14 per cent reduction in interest expenses year-on-year, notwithstanding a 9 per cent growth in customer deposits and 25 per cent increase in medium term borrowings,” Adewale said.

“Cost-to-income ratio has improved to 62 per cent from 70 per cent in the previous year. Cost-to-income is buoyed by income and operating expenses in line with expectations in spite of inflationary and devaluation pressures.”

Union Bank said basic earnings per share rose to 77 kobo in nine months from 54 kobo a year earlier. The bank’s stock remained flat at N4.52 at the Nigerian Stock Exchange on Friday.

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