Union Bank Grows Half-year Profit after Tax by 25% to N12bn

Union Bank of Nigeria Plc has released its financial results for the half year ended June 30, 2018, showing improved performance indicators. The lender recorded gross earnings of N83.3 billion, indicating a growth of 16 per cent.

Net interest income rose 14 per cent from N30.1 billion to N34.3 billion, driven by an improvement in net interest margins from 7.9 per cent to 8.2 per cent on the back of lower cost of funds. Non-interest income grew by 37 per cent to N21.1 billion, from N15.4 billion following enhanced treasury trading income, recoveries and 311 per cent growth in alternate channel revenues. Credit/other impairment charges went up by 26 per cent from N3.7 billion to N4.6 billion.

The bank ended the period with a profit before tax (PBT) of N11.7 billion, up 23 per cent compared with N9.5 billion in the corresponding period of 2017. Profit after tax (PAT) grew faster, rising by 25 per cent from N9.2 billion to N11.5 billion in 2018.

A further analysis of the results show that Union Bank is attracting more patronage as customer deposits rose three per cent to N826.7 billion, compared with N802.4 billion in 2017. However, loans and advances to customers fell by nine per cent from N560.7 billion to N508.5 billion in 2018. Non-performing loan ratio improved from 19.8 per cent to 10.8 per cent.

Commenting on the results, Chief Executive Officer of Union Bank said: “In the first half of the year, we have continued to see positive results from our efficiency and productivity drive. Across all our business lines, we witnessed strong underlying performance, translating into improved earnings. We continue to focus on the recovery of non-performing loans. With the resolution in Q2 2018 of the large real estate exposure which was impaired in December 2017, the Group NPL ratio is down to 10.8 per cent from 14.9 per cent at 31 March 2018 and 19.8 per cent at 31 December 2017.”

Also speaking, Chief Financial Officer of the bank, Oyinkan Adewale said: “We are pleased that for the first time since 2012, the group’s retained earnings moved from a negative to a positive position, thus eliminating a major technical impediment to the payment of dividends. Operating Expenses for the period were affected by some one-off items, as well as a combined 25 per cent increase in NDIC premium and AMCON levy. For the rest of the year, we will intensify our cost rationalisation initiatives.”