Union Bank of Nigeria Plc has announced its unaudited results for the half year ended 30thJune 2016.
Bank’s Financial Highlights for the Half Year:
· Profit before tax(PBT)of ₦9.1bn(₦10.2bn inH1 2015); excluding gain on sale of
subsidiaries, PBT isup23%to ₦8.3bn(₦6.7 inH1 2015).
· Gross earnings up3% to ₦59.0bn(₦57.1bnin H1 2015); excluding gain on sale of
subsidiaries*,gross earnings increased by9% to ₦58.2bn (₦53.7bn inH12015).
· Interest income up3% to ₦43.3bn (₦41.9bnin H1 2015). Improved asset yields:
16.1% in H12016from14.6% in H12015.
· Interest expense down20% to ₦13.4bn (₦16.6bn inH1 2015). Continued optimization of funding costs, resulting in a reduction in primary cost of funds to4.8% in H12016, from6.3%inH2 2015and 6.3% in H1 2015.
· Non-interest revenue up 3% to₦15.7bn (₦15.2bnin H12015); excluding gain on sale of subsidiaries up 27%to ₦14.9bn(₦11.8bnin H12015), driven by e-business fees, gain on securities trading and some revaluation gains.
· Operating expenses of ₦28.0bn (₦27.3bn inH12015); in line with planned investments in technology and network infrastructure.
· Customerdepositsup6%to ₦604.5bn(₦569.1bnDec 2015); expanded/improved
Service offerings continue to generate customer confidence.
· Gross loans up 33% to ₦491.9bn (₦370.9bn Dec2015); core volume growth of 13% to ₦417.6bn; additional growth to ₦491.9bndriven by the impact of currency devaluation on foreign currency loans.
Commenting on the Bank’s half year results, Emeka Emuwa, Chief Executive Officer said:
“Our sustained focus on executing Union Bank’s strategic transformation objectives during the first half of 2016 has delivered growth in our core business, notwithstanding a difficult economic environment.
The Bank recorded 9%year-on-yeargrowthincoregrossearnings,driven primarily by balance sheet optimisation. With the combination of an improved retail portfolio of product and service offerings ,securities trading and efficient cost management, the Bankwasabletodeliver₦8.2bnincorePBT,up 23%whencomparedto ₦6.7bnin the same period in 2015.
Our core business remains resilient in these challenging times and we maintain our commitment to delivering value to all our stakeholders. We also remain confident that our profit retention strategy will adequately support the Bank’s medium term growth
Objectives and continue to strengthen our risk management to mitigate risk and losses.”
Speaking further on the Bank’s numbers, Chief Financial Officer, Oyinkan Adewale said:
“We are pleased that our focus on building the business fundamentals is yielding significant value across the Bank. With increasing consumer confidence in our products and services, we have increased our low cost deposits, making us less reliant on more expensive alternative funding sources. This has led to a 20% reduction in cost of funds year-on-year. We are also seeing impact on non-interest revenue, which grew during the period. Excluding one-time gains on sale of subsidiaries, non-interest revenue is up by 27% to ₦14.9bn in H12016 compared to H1 2015.
Notwithstanding an inflationary environment, our operating costs remain in line with expectation as our investments in technology continue to yield improved efficiency across the Bank.
Our liquidity ratio at 39%remains well in excess of the regulatory minimum. With a coverageratioof188%, we believe that the loan book is well provisioned, given the current economic climate.
