Union Bank made N12.1 billion profit before tax in first half

Union Bank made N12.1 billion profit before tax in first half

Union Bank of Nigeria Plc has declared a profit before tax of N12.1 billion for the first half of financial year 2019.

The profit represented a growth of 4% when compared with N11.7 billion achieved in the comparative period of 2018.

At the topline, the bank gross earnings went down by 9% to N76 billion as against ₦83.3 billion posted half year 2018. The reduced earnings capacity was due to dropped in its interest earning assets.

Reduced interest earnings assets resulted to drop in interest income. In the first half result, Union bank interest income settled at ₦57.3 billion as against ₦62.2 billion in the corresponding period of 2018.

Thus, net interest income after impairment grew by 3% to ₦30.5 billion against ₦29.7 billion in H1 2018, supported by an aggressive drive in collections.

Net operating income was slightly down by two per cent to ₦49.6 billion compared with ₦50.9 billion in the previous period of 2018.

Meanwhile, operating expenses was down by 4% to ₦37.5 billion as against ₦39.2 billion in H1 2018; reflecting the gains of the bank’s cost optimisation programme.

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Commenting on the results, Emeka Emuwa, the bank’s Chief Executive Officer, said it was able to deliver growth in profit before tax in spite of the realities of a challenging economic environment.

“Notwithstanding the realities of operating in a challenging economic environment, the Group delivered a per cent growth in profit before tax to ₦12.1 billion from ₦11.7 billion in H1 2018.

“To sustain growth in earnings, we remained steadfast in our commitment to delivering value and first-class customer experience to all our customers.

“We have developed a concerted and clear plan to increase our risk assets with our loan book growing by eight per cent to ₦563.0 billion compared to year-end 2018.

“The ability to take on more risk is hinged on our robust risk management and debt recovery processes working in sync which led to recoveries of over N5 billion in the period.

“We successfully closed our Series 3, 10 year ₦30 billion bond in June, as part of our ₦100 billion debt capital programme.

“This series, which was once again fully subscribed, is the largest 10-year bond issued by a Nigerian corporate to date.

“This further reinforces the confidence of the investor community in Union Bank. With this new injection of tier 2 capital, we are well positioned to deliver on our growth strategy and priorities.

“Looking ahead, we will continue to focus on opportunities to deliver our simpler, smarter banking promise to our customers while improving internal operational efficiencies which will translate to enhanced shareholder value,” Emuwa said.

Also speaking on the H1 2019 numbers, Joe Mbulu, the bank’s Chief Financial Officer, said the company during the period expanded its banking footprint.

“In the first half of 2019, we continued with our expansion strategy to grow our agency banking footprint which in turn boosted customer confidence in our brand,” Mbulu said.

He stated that customer deposits followed the same trajectory with a four per cent growth, to ₦889.5 billion as at June 2019 from ₦857.6 billion in December 2018.

“With our aggressive focus on recoveries and improving asset quality, the bank’s Non-Performing Loan ratio has continued its downward trend, declining to 7.3 per cent from 8.1per cent as at Dec. 2018 ahead of full year 2019 guidance.

“Improvement in asset quality has enabled us to grow our loan book optimally in the first half of 2019, positioning us with the ability to take on emerging opportunities in key sectors of the economy,” he added.

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Union Bank made N12.1 billion profit before tax in first half