Union Bank’s nine months results show PBT relatively flat at N16bn

Union Bank of Nigeria Plc has released its group unaudited financial statements for the nine months ended September 30, 2021.

The bank’s financial highlights show profit before tax (PBT) relatively flat at N16billion (N15.9billion in 9M 2020); gross earnings: up 3percent to N121.8billion (N118.8billion in 9M 2020); net operating income after impairments: up 3percent to N71.2billion (N69.3billion in 9M 2020) driven by stronger non-interest income.

The nine monthly scorecards released to the investing public at the Nigerian Exchange Limited (NGX) also show that Union Bank’s non-interest income was up by 26percent to N42billion (N33.4billion in 9M 2020) supported by growth in fees and commission from e-business, credit and trade transactions as well as debt recoveries.

Operating expenses went up by 3percent to N55.2billion (N53.4billion in 9M 2020), reflecting higher non-discretionary regulatory costs as well as depreciation and amortisation costs from
technology spend.

Gross loans rose by 16percent to N855.7billion (N736.7billion in Dec 2020) reflecting increased lending to growth sectors of the economy; while customer deposits rose by 14percent to N1.3trillion (N1.1trillion in December 2020) reflecting gains from the bank’s marketing drive for low-cost deposits and deepened customer loyalty.

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Commenting on the results, Emeka Okonkwo, CEO, Union Bank said: “We continue to demonstrate the resilience of our business despite the volatility in the macro-economic environment, growing our gross earnings by 3percent and delivering stable Profit Before Tax of N16 billion”.

“This stability is underpinned by our strategic focus on deepening our customer engagements and meeting their needs as we grow our core business. Consequently, our deposit base is up 14percent to N1.3 trillion and our loan book has expanded by 16percent to N855.7 billion driven by our compelling campaigns, new product offerings and effective sales channels. We have also achieved stronger transaction volumes across our businesses and channels, driving growth in fees and commissions, while we ensure robust cost controls.As we approach the end of the year, we are focused on building on our efficiency and optimising our core business while deepening our relationships with customers,” the CEO noted further.

Speaking on the 9M 2021 numbers, Chief Financial Officer, Joe Mbulu said: “We are focused on executing our plans for revenue diversification, driving strong growth in
transaction volumes while we continue our strong debt recovery initiatives. These are
mitigating the on-going impact of relatively low risk asset margins.

“During the period, non-interest income increased by 26percent to N42 billion, driven by stronger net fee and commissions which gained 44percent to N10.3 billion from N7.2 billion and recoveries which grew by 163percent to N13 billion from N4.9 billion. We also maintained very strong control over our expenses, which grew by 3.3percent, well below the rate of inflation as we continue to realise the benefits of our cost efficiency culture and mindset. With our capital adequacy ratio at 15.8percent, above regulatory requirements and good asset quality with non performing loans (NPLs) at 4.7percent despite continued growth in our loan book, we are focused on further optimising our capital structure to support our growth plans as we look towards 2022 and beyond,” he added.