Union Bank grows H1 pre-tax profit by 6.7% to N12.3bn

Union Bank of Nigeria Plc has announced its unaudited financial statements for the half-year (H1) ended June 30, 2022, showing its profit before tax (PBT) grew by 6.7percent to N12.3billion (N11.5billion in H1 2021).

The bank’s financial highlights show gross earnings increased by 12.5percent to N87.4billion (N77.7billion in H1 2021) driven by higher earning assets; while its net operating income after impairments was also up by 2.6percent to N49.6billion (N48.3billion in H1 2021) driven by higher trading income.

Non-interest income was down by 24.1percent to N21.1billion (N27.7billion in H1 2021) due to foreign exchange revaluation loss. Operating expenses rose by 1.3percent to N37.3billion (N36.8billion in H1 2021) an outcome of higher non-discretionary regulatory costs and power costs.

Customer deposits went up by 7percent to N1.5 trillion in H1’2022 (N1.4 trillion in December 2021). Gross loans dropped by 0.4percent to N895.3billion (N899.1billion in December 2021). Non-performing loans ratio was flat at 4.4percent (4.3percent as at June 2021).

While commenting on the results, Mudassir Amray, CEO, Union Bank of Nigeria Plc said, “Following the successful acquisition of majority shares of the bank by Titan Trust Bank, we are now focused on strengthening the core business and improving operational efficiencies across board.

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“In parallel, we are going full throttle on integrating the two banks to form a ‘stronger Union’ positioned to deliver value to all stakeholders, leveraging technology and digital innovation. The integration is expected to be completed by the end of the third quarter.”

“In H1 2022, compared to H1 2021, the bank’s gross earnings, net interest income and Profit Before Tax grew by 12.5percent, 41percent, and 6.7percent respectively. Since taking the reins as Chief Executive Officer as at June 2, 2022, I am confident that the bank has all the necessary ingredients to be a tier 1 bank,” he said.

“As we drive towards a seamless integration in the second half of the year, we remain committed to achieving our business objectives. We are excited about exploiting the synergies from the newly expanded franchise post integration,” Amray added.

Speaking on the H1 2022 numbers, Chief Financial Officer, Joe Mbulu said: “We have continued to deliver improved efficiency, enabling growth in PBT, which grew by 6.7percent to N12.3billion.

“Net Interest Income increased by 41percent during the period, driven by interest income which grew from N47.7billion to N64.3billion during H1 2022. The rise in interest income was underpinned by growth in loans/advances which rose by 24percent,” he added.

“Despite inflationary pressures, our strong cost management model continues to yield dividends. Operating expenses grew slightly by only 1.3percent to N37.3billion from N36.3billion. Deposits increased by 7percent to N1.5 trillion while our risk assets dropped slightly by 0.4percent to N889.1billion from N895.3billion as at year-end 2021.

“Our capital and liquidity positions remained above regulatory levels, with capital adequacy ratio (CAR) at 16.4percent and liquidity ratio of 39.2percent further demonstrating the capacity of our strong balance sheet. Our non-performing loan ratio ended at 4.4percent. Furthermore, our coverage ratio remains robust at 140.7percent,” Mbulu said.