Home Business & Economy Union Bank’s half year profit hits N12.1bn

Union Bank’s half year profit hits N12.1bn

COMFORT EKELEME

Union Bank of Nigeria Plc said its Profit Before Tax (PBT) for the half year ended June 30, 2019 stood at of N12.1 billion.

According to the bank, the profit represented a growth of 4 per cent when compared with N11.7 billion achieved in the comparative period of 2018.

The result which released on the floor of the Nigerian Stock Exchange (NSE) indicates that gross earnings stood at N76 billion. This was in contrast with ₦83.3 billion posted half year 2018, indicating a decline of nine per cent due to decrease in average earning assets.

Interest income was down by eight per cent to ₦57.3bn against ₦62.2 billion in the corresponding period of 2018.

Also, net interest income after impairment grew by three per cent 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.

Also, operating expenses was down by four per cent to ₦37.5 billion against ₦39.2 billion in H1 2018; reflecting the gains of the bank’s cost optimization programme.

Commenting on the results, Chief Executive Officer, Emeka Emuwa, said the bank 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,” he said.

The bank’s gross earnings declined by 9per cent to ₦76.0billion (₦83.3bn in H1 2018), due to a decrease in average earning assets.

Speaking on the H1 2019 numbers, Chief Financial Officer, Joe Mbulu said “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. Customer deposits have followed the same trajectory with a 4per cent growth, to ₦889.5 billion as at June 2019 from ₦857.6 billion in December 2018. Net Interest Income after Impairments is also up 3% to ₦30.5 billion compared to ₦29.7 billion in the same period in 2018.

“With our aggressive focus on recoveries and improving asset quality, the Bank’s NPL ratio has continued its downward trend, declining to 7.3per cent from 8.1per cent as at December 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.

Having completed our Series 3 ₦30 billion funding, our Capital Adequacy Ratio (CAR) further strengthened, closing at 19.4per cent in June 2019 compared to 16.4per cent as at December 2018.

“Our comprehensive cost optimization programme, the Long-Term Efficiency Acceleration Programme (LEAP), has begun to yield dividends across board with operating expenses declining by 4per cent to ₦37.5 billion compared to ₦39.2 billion in H1 2018. We believe LEAP will continue to deliver material cost savings through 2019 and beyond, supporting our Cost-to-Income Ratio (CIR) ambition,” he said.

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