Despite the challenging environment following the Central Bank of Nigeria's intervention in January 2024, which led to heightened customer concerns, Union Bank of Nigeria has reported a profit before tax of N79.8 billion on gross earnings of N333 billion during the half year ended June 30, 2024 compared with a profit before tax of N66.5 billion on gross earnings of N210.5 billion during the corresponding period of 2023, representing a growth of 20 percent in profit before tax and 58 percent in gross earnings.
The Bank said in a statement that, ”This accomplishment
demonstrates the bank's resilience and commitment to delivering results in
uncertain times.”
Commenting on the results, Yetunde B. Oni, Managing Director and Chief Executive Officer of the Bank ,said: “I am pleased that Union Bank of Nigeria has delivered a progressive financial performance in the first half of the year, with a significant boost in Net Interest Income, Net Operating Income, and Net Trading Income.
“At the beginning of the year, our top priority was to keep
the momentum going with a strong focus on stability following the intervention
of the Central Bank of Nigeria. We also continued with the planned strategic
priorities, which are centred around scaling our digital play, driving
hypergrowth in target sectors, optimising our wholesale bank structure,
aggressively ensuring recoveries of past-due obligations, and orchestrating a
robust ecosystem play through existing and new partnerships.
“So far, we are seeing the direct impact of our strategy on
our financial performance. We achieved a substantial increase in Gross Earnings
by 58% to ₦333bn compared to ₦210.5bn in H1 2023. Net Operating Income after
Impairments increased by 32% to ₦143.6bn from ₦108.5bn in H1 2023, attributed
to enhanced interest income, fees, commissions, and margin expansion.
Similarly, we achieved Profit Before Tax (PBT) of ₦79.8bn, representing 20%
growth compared to ₦66.5bn in H1 2023.
“In pursuit of our strategic priority to scale our digital
play, Union Bank successfully launched its digital lending platform, UnionKash.
This platform enables existing and new-to-bank customers to access soft loans
easily. Since its launch in the first quarter of the year, over 14,000
customers have successfully accessed soft loans through the USSD code *826*41#.
“These achievements reflect the remarkable resilience and
dedication of our staff, who have been instrumental in navigating the
challenges of a demanding operating environment. Despite the pressures of
inflation, exchange rate volatility, and increased operational costs, our team
has remained steadfast and committed to delivering excellence. I extend my
sincere appreciation to all our employees for their hard work and unwavering
dedication, which have been critical to our success in the first half of 2024.
“I also want to express our deep gratitude to our customers,
whose loyalty to the Union Bank brand has been unwavering. Their trust and
continued patronage have been vital to our success, and we remain committed to
serving them with excellence. Additionally, we acknowledge the invaluable
support from our regulators as we navigated the complexities of our operating
environment.
“In line with the realities of our environment, the bank has
initiated the process of recapitalisation. The Banking Sector Recapitalisation
Program, introduced by the Central Bank of Nigeria (CBN), mandates banks to
increase their minimum paid-in common equity capital to a specified amount by
April 2026, per their license category and authorisation. This strategic
initiative is not only aimed at aligning our capital adequacy with regulatory
standards but also at surpassing them, thereby fortifying our financial
stability and positioning us to capitalise on emerging market opportunities.
“As we move forward, our focus remains on building a
controlled, compliant, and profitable organisation. We are committed to
maintaining strong governance frameworks, ensuring regulatory compliance, and
driving sustainable profitability. These pillars will not only fortify our
financial stability but also position us to capitalise on emerging
opportunities in the market. I am confident that with our continued focus on
these priorities, we will sustain our positive momentum and deliver long-term
value to our stakeholders.”
Speaking on the H1 2024 numbers, Acting Chief Financial
Officer Oluwagbenga Adeoye said:
“Our H1 2024 financial performance is a testament to the
Bank’s resilience because it came on the backdrop of a slow start, occasioned
by the high inflationary environment, exchange rate volatility, increased power
costs and other factors.
“Nevertheless, we were not entirely insulated from these
shocks as Non-Interest Income reduced marginally in H1 2024 by 3% to ₦108.3bn
from ₦112.1bn in H1 2023 due to foreign exchange revaluation loss. Operating
Expenses increased by 52% to ₦63.8bn against ₦42bn in H1 2023, majorly due to
the high inflationary environment, increased power cost and increased
non-discretionary regulatory cost. Notwithstanding, our Cost to Income Ratio
remains below 50% at 44% compared to 39% recorded in H1 2023 on the back of
implementing planned cost-efficiency initiatives.
“The Bank continued to grow its loan book cautiously, with
gross loans increasing by 24 percent to ₦1.93 trillion compared to ₦1.55
trillion in December 2023, customer deposits grew marginally by one percent to
₦2.36 trillion from ₦2.34 trillion in December 2023, reflecting the impact of
socio-economic pressures on our operating environment.
“In the second half of the year, we will focus on improving
efficiency and driving our non-interest income. We are confident that we will
finish the year strong and sustain the returns on equity and returns on assets,
which stood at 40.6% and 3.68%, respectively.”
Further analysis of the Bank’s performance during the reviewed
period showed that its net operating income after impairments rose to N143.6
billion from N108.5 billion in 2023, representing a growth of 32 percent,
non-interest income reduced marginally by three percent to ₦108.3 billion from
N112.1 billion during the corresponding period of 2023 due to foreign exchange
revaluation loss.
Operating expenses moved up remarkably by 52 percent to ₦63.8
billion from N42 billion in the corresponding period of 2023, resulting from
the inflationary environment,increase in power costs and increase in
non-discretionary
regulatory costs.
In the same vein, gross loans increased by 24 percent to
₦1.93trn from N1.55trn in December 2023 while customer deposits went up
marginally by one percent to ₦2.36 trillion from N2.34 trillion in Dec 2023,
reflecting the impact of the challenges posed by the socio-economic environment
on its operations.
About Union Bank Plc:
Established in 1917 and listed on the Nigerian Stock Exchange
in 1971, Union Bank of Nigeria Plc is a household name and one of Nigeria's
long-standing and most respected financial institutions.
The Bank is a trusted and recognisable brand with an extensive
network of over 300 branches across Nigeria. The Bank currently offers a
variety of banking services to both individual and corporate clients, including
current, savings and deposit account services, funds transfer, foreign currency
domiciliation, loans, overdrafts, equipment leasing and trade finance. The Bank
also offers customers convenient electronic banking channels and products,
including Online Banking, Mobile
Banking, Debit Cards, ATMs, and POS Systems.
More information can be found at: www.unionbankng.com
Media Enquiries: Email [email protected]
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