Union Bank Grows Loan by 9% to N566.5bn

Union Bank Grows Loan by 9% to N566.5bn

Union Bank has continued to partner in growth of the economy through support to many sectors.

The nine months financial report released by the bank showed an increase in loan package for the economy as gross loans moved up 9 per cent  to N566.5bn (Dec 2018 – N519.7bn) driven by increased risk asset creation across priority sectors in the economy·

Customer deposits moved up 4 per cent to N892.9bn (Dec 2018 – N857.6bn) reflecting our continuing acquisition of low-cost deposits driven by strengthened brand affinity

The financial report also showed Profit Before Tax, PBT, going up to 5 per cent to N15.6bn against 2018 N14.9bn·

Gross earnings however went down 4 per cent to N117.2bn (9M 2018 – N122.2bn) due to a decrease in average earning assets· Interest income: down 2 per cent to N90.0bn (9M 2018 – N91.5bn)·

Net interest income after impairment: up 6 per cent to ₦44.3bn (9M 2018 – ₦42.0bn) driven by the impact of collections on impaired facilities· Non-interest income: down 12 per cent to ₦27.1bn (9M 2018 – ₦30.7bn) driven by reduced market volatility in 2019 which had an impact on trading income. Cash Recoveries was up 114 per cent  to N8.4bn (9M 2018 – N3.9bn)· Net operating income: down 2 per cent  to ₦71.4bn (9M 2018 – ₦72.7bn)· Operating expenses: down 3% to ₦56.2bn (9M 2018 – ₦58.0bn) as a result of our sustained cost optimisation programme·

Commenting on the results, Emeka Emuwa, CEO said: “Profit before Tax (PBT) for the Group is up to N15.6bn, a 5 per cent increase over the same period in 2018. Our continued focus on consumer centric service and product propositions is yielding solid results, contributing to a 28 per cent growth in our electronic channels fee income which is at N5.6bn for the period. Our debt recovery drive continues to record successes with N8.4bn of recoveries year to date. In line with our stated business objectives, we are continuing to grow our asset book by creating quality risk assets in targeted sectors.

This has led to a 9 per cent growth in our loan portfolio to N566.5bn compared to N519.7bn at year-end 2018.Going into the rest of the year, our ambition remains to deliver superior customer experience across all customer touch points.”Speaking on the 9M 2019 numbers, Chief Financial Officer, Joe Mbulu said: “While we had a slight decline in Gross Earnings for the Group from N122.2bn toN117.2bn in 2018, our efficiency initiatives, including the deployment of Robotics Process Automation as well as our cost optimisation  programme, ensured we delivered 4 per cent  growth in Profit After Tax (PAT), recording N15.2bn compared toN14.7bn in the prior year period.

Operating expenses reduced by 3 per cent to N56.2bn from N58.0bn in 9M 2018 and the Bank’s customer-related non-interest revenue drivers remained strong with net fee and commission income growing 10 per cent to N9.5bn from N8.7bn for the corresponding period in 2018. We continue to maintain adequate levels of capital with our Capital Adequacy Ratio (CAR) at 17.8 per cent which is above the regulatory threshold. Non-Performing Loans (NPLs) declined to 8.0per cent from 8.7 per cent as at year-end 2018.

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