Union Homes Savings expenses responsible for loss position

Union Homes Savings and Loans (UHSL) had interest paid on customer deposits and operating expenses wipe out all windfall from top lines resulting in a loss position.

For the first nine months through September 2015, Union Homes posted a loss after tax of N67.51 million from N1.31 billion loss it posted the same period of the corresponding year (Q3) 2014.

The loss position was as a result of an operating expenses of N1 billion that swallowed the whole of net operating income of N936 million.

UHSL interest expense of N1.76 billion also consumed the whole of interest income of N197.84 million.

Further analysis of the balance sheet of the mortgage giant showed interest income fell by 72 percent in the period under review.

Analysts across board say that the housing mortgage and real sector business in Africa largest economy has the potential to drive growth in the economy.

Economic growth rate slowed to 2.4 percent Q2 of 2015, with a marginal increase to 2.84 percent in Q3 of 2015 compared to nearly 4.0 percent in the first quarter of 2015, and 6.2 percent in the fourth quarter of 2014, according the NBS data.

Unemployment rate already seed up to 9.9 percent, while inflation rate appeared to be stalled at 9.3 percent, high the CBN’s bench mark rate to 9 percent and 8 percent respectively.

The expected foreign direct investment into the housing sector on the back of the continents starling economic and demographic growth prospects means UHSL is on the trajectory of growth.

“Sub-Saharan Africa is one of the world’s most rapidly developing economic regions, and it is projected that 13 of 20 fastest-growing global economies over the next five years will be in Africa, said analysts at Knight Frank, in their 2015  Africa Report.

“By 2100 nearly 40 percent of the world’s population will live in Africa, with the large majority of these being in the continent’s fast-growing cities,” the report added.

UHSL share price closed at N4.97 on the floor of the exchange while market capitalization was N4.85.

BALA AUGIE