Union Bank of Nigeria Plc announced its unaudited results for half year ended June 30, 2017 (H1) with an increase of six per cent in profit before tax to N9.5 billion.
One of Nigeria’s long-standing and most respected financial institutions had reported N8.9 billion profit before tax in half year ended June 30, 2016.
The group financial highlights indicated that gross earnings increased by 23 per cent to N73.7billion in H1 2017 from N60.1billion in H1 2016.
Interest income up by 31 per cent to N58.3billion from N44.3billion in H1 2016, driven largely by Naira devaluation-fuelled foreign currency loan book growth while net interest revenue before impairment up by two per cent to N31.7billion as against N30.9billion recorded in H1 2016.
In a statement, the Chief Executive Officer, Union Bank of Nigeria, Mr. Emeka Emuwa, said “As our centenary celebrations continue and with the launch of our N50 billion rights issue in the second half of the year, 2017 will remain a very busy year for the Bank.
“With our clear focus on enhancing the operational efficiency of the franchise, Gross Earnings grew by 23per cent in the first half of the year to N73.7 billion, from N60.1 billion in H1 2016. In a challenged economy, the Group delivered Profit Before Tax (PBT) of N9.5 billion, a six per cent growth over the corresponding period in 2016.
“Despite stiff competition, our sales strategy and competitive brand continue to provide positive momentum, with Customer Deposits growing by 15 per cent from December 2016 to N759.3 billion at the end of the period.
“In the second half of the year, our focus will centre on our rights issue launch; we will remain nimble to take advantage of emerging opportunities and while improving on service delivery to our customers.”
Speaking on the first half numbers, Chief Financial Officer, Oyinkan Adewale, said,
“Improved foreign exchange availability enabled us to bring our foreign currency loan book down to 44per cent of total loans, from 50per cent at the end of 2016. 18 per cent customer deposit growth in the Nigerian bank allowed us to bring Loans to Deposit Ratio down to 65 per cent from 82 per cent at the end of 2016. “Sustaining low cost deposit generation momentum, we were able to improve our low-cost deposit base to 69 per cent of total deposits, from 65 per cent at the end of 2016.
“The Group NPL ratio increased to 8.2 per cent. This increase reflects the impact of a five per cent decline in Gross Loans over the period, without which June 2017 NPL ratio would have been 7.82 per cent. With total provision coverage in excess of 185 per cent, NPLs remain extremely well covered.
“Going into H2 2017, we will focus on optimising funding costs and continue to keep operating expenses in check, while applying sound risk management practices to minimize impairment costs to ensure we deliver a sustainable financial performance.”
However, the group gross loans dropped by five per cent to N511.0billion in H1 2017 from N535.8.billon recorded in 2016; improved foreign exchange availability enabled optimizing of the foreign currency loan book.
Furthermore, Customer deposits: up 15 per cent to N759.3billion from N658.4billion in full year ended December 2016.
The Bank remains on course to meet its key 2017 business objectives, including plans to raise up to N50 billion in Tier 1 capital through a rights issue during the third quarter.
The capital increase supports bank’s strategy to accelerate business growth and position itself as a leading commercial bank in Nigeria. The rights issue is expected to launch in the third quarter once all regulatory approvals have been secured
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