Union Bank Shareholders Approve Dividend Payment, Applaud Scorecard

Union Bank Shareholders Approve Dividend Payment, Applaud Scorecard

Union Bank of Nigeria Plc shareholders have approved 25 kobo dividend per share proposed by the Board of Directors, commend lender’s performance amidst the pandemic-induced economic stress.

The shareholders gave the commendation at the company’s 2020 Annual General Meeting (AGM) held on Tuesday by proxy in Lagos due to coronavirus.

They applauded the bank’s resilience for staying resilience in tough time while focusing on sustaining shareholder value.

Addressing the shareholders at the meeting, Mrs. Hamza Bassey, the bank’s Chairman, highlighted key achievements of the bank in 2020.

Bassey said the bank during the period focused on digital innovation for high-quality service delivery across touch points.

“Our commitment to delivering high quality earnings remains unwavering.

“I am pleased to announce that the bank delivered a resilient set of results in 2020 notwithstanding the challenging macroeconomic operating environment.

“Our overall performance demonstrates our resilience and ability to adapt to the constantly changing business environment to maximise shareholder returns.

“We remain committed to delivering value to our shareholders as we continue to drive growth and profitability of our business,” she said.

Also speaking, the bank’s Chief Executive Officer, Mr Emeka Okonkwo, said that the company delivered strong performance in spite of the headwinds caused by the pandemic.

“In 2020, despite the headwinds caused by the pandemic, Union Bank continued to deliver a strong performance that has enabled the Board of Directors propose a dividend payment for the second consecutive year.

“This indicates resilience and affirms the strong foundation that was rebuilt over the past eight years.

“As we begin a new chapter, we will continue the journey to becoming a leading financial institution in Nigeria.

“Sustaining value to our shareholders remains at the core of our continuous drive and we remain committed to delivering improved profitability and higher returns in 2021 and beyond,” Okonkwo said.

He added that the bank would continue to execute its strategy to achieve the vision of being Nigeria’s most reliable and trusted partner.

Union bank profit before tax expanded by 2.8 per cent to N25.4 billion from N24.7 billion posted in the comparative period of 2019.

Customer deposits also increased by 27.6 per cent to N1.13 trillion compared with N886.3 billion in 2019.

The increase in customer deposits reflects the bank’s agility in delivering a compelling range of products to its customers during the pandemic and increased adoption of digital channels.

Similarly, non-performing loans ratio reduced to four per cent from 5.8 per cent in 2019, driven by a disciplined recoveries strategy, robust loan book and key restructurings to support customers during the pandemic.

Financial Scorecard:

Profit before tax rose to N25.43 billion compared with N24.75 billion posted in 2019. While after tax profit stood at N24.65 billion from N24.38 billion in the comparative period of 2019.

Commenting on the results, the bank’s Chief Executive Officer, Mr. Emeka Emuwa, said the company delivered a strong set of results in spite of the impact of the COVID-19 pandemic on its operations and the wider economy.

Emuwa said the bank’s investments in technology and building a progressive work culture over the past eight years, enabled a swift response to the pandemic that allowed its workforce transition to remote working while maintaining the productivity required to deliver these strong set of results in 2020.

“The bank has delivered a strong set of results notwithstanding the impact of COVID-19 on our operations and the wider economy, enabling the Board of Directors to continue to return value to shareholders with a proposed dividend payment for the second year in a row.

“This demonstrates the strong foundations we have built, as we continue to deliver against our target of becoming a leading financial institution in Nigeria.

“For the full year, we grew across key income lines. Net income after impairments grew 8.3 per cent from N95.5 billion to N103.4 billion and translated into 2.8 per cent growth in profit before tax to N25.4 billion from N24.7 billion.

“The core of this performance is driven by the growth in our loan book, with 23.8 per cent increase in gross loans, to N736.7 billion from N595.3 billion in 2019,” Emuwa said.

He noted that the pandemic accelerated trends in customer behaviour with rapid increase in digital adoption.

“We have seen rapid increase in digital adoption with a 38 per cent year-on-year increase in active users on our UnionMobile channel with total active users now at 2.9 million.

“Our UnionOne and Union360 platforms for businesses grew by 11 per cent from 25,000 users to 27,700 users. 94 per cent of transactions in the bank are now done digitally, up from 89 per cent in 2019.

“We also aggressively grew UnionDirect (our agent network) by 6x from 3,100 to 18,100 in line with our focus on our retail business,” Emuwa stated.

He explained that with the bank’s investments yielding positive results, it was well positioned as a strong leader in the retail and digital space.

“In 2021, the bank will focus on enhancing revenues and shareholder value by revving up customer acquisition, engagement and transactions through seamless customer journeys and an optimised service delivery platform.

“I am convinced that with the excellent management team and a clear strategy in place, Union Bank is well positioned to continue to compete and deliver value to its shareholders,” he said.

Also speaking on the numbers, the Chief Financial Officer, Joe Mbulu said: “We are pleased with both our top and bottom-line performance in 2020, in light of the impact of the pandemic and economic challenges.

“Significant inflationary pressures and the translation of currency depreciation drove growth in our cost base.

“However, we maintained strong control, limiting operating expense increase to 10 per cent (N77.9 billion from N70.8 billion), well below the rate of inflation,” Mbulu said.

Consequently, he said the bank recorded marginal increase in cost to income ratio to 75.4 per cent from 74.1per cent.

“Our customer deposits hit a milestone during the year, crossing the one trillion naira mark to N1.13 trillion  from N886.3 billion in 2019, an increase of 27.1 per cent.

“We continued to proactively manage our growing risk asset portfolio and recorded better asset quality, with our NPL ratio improving from 5.8 per cent to 4.0 per cent.

“This achievement, combined with a solid capital adequacy at 17.5 per cent and continued top-line growth, provides the platform for strong growth going forward,” Mbulu said.

The chief financial officer said the bank would continue to grow its loan portfolio in 2021.

“We will continue to grow our loan portfolio in 2021, which we expect to be a significant driver of growth, combined with our value chain synergies across our business which will drive customer and transaction growth during the year and beyond,” he said.

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