Editor
Despite the challenging circumstances following the intervention of the Central Bank of Nigeria in January 2024, which heightened customer concerns, Union Bank of Nigeria announced a profit before tax (PBT) of N79.8 billion on gross earnings of N333 billion for the half-year ending on June 30, 2024.
This is in comparison to a profit before tax of N66.5 billion on gross earnings of N210.5 billion during the corresponding period in 2023, signifying a 20% growth in profit before tax and a 58% increase in gross earnings.
The Bank stated, “This achievement showcases the bank’s resilience and dedication to delivering results during uncertain times.”
Commenting on the results, Yetunde B. Oni, the Managing Director and Chief Executive Officer of the Bank, remarked:
“I am delighted that Union Bank of Nigeria has exhibited progressive financial performance in the initial half of the year, with a notable rise in Net Interest Income, Net Operating Income, and Net Trading Income.
“At the onset of the year, our primary focus was to sustain the momentum with a strong emphasis on stability post the Central Bank of Nigeria’s intervention. We continued to pursue our planned strategic priorities, which revolve around expanding our digital initiatives, driving significant growth in target sectors, optimizing our wholesale banking structure, vigorously ensuring the recovery of past-due obligations, and orchestrating a robust ecosystem through existing and new partnerships.
“Our strategic approach has directly impacted our financial performance. We achieved a substantial 58% increase in Gross Earnings to N333bn compared to N210.5bn in H1 2023. Net Operating Income after Impairments surged by 32% to N143.6bn from N108.5bn in H1 2023, attributed to enhanced interest income, fees, commissions, and margin expansion. Similarly, we achieved a Profit Before Tax (PBT) of N79.8bn, marking a 20% growth compared to ₦66.5bn in H1 2023.
“In line with our strategic priority to expand our digital footprint, Union Bank successfully introduced its digital lending platform, UnionKash. This platform allows both existing and new customers to access soft loans conveniently. Since its launch in the first quarter of the year, over 14,000 customers have successfully accessed soft loans through the USSD code 82641#.
“These accomplishments underscore the remarkable resilience and commitment of our staff, who have played a crucial role in navigating the challenges of a demanding operational environment. Despite the pressures of inflation, exchange rate fluctuations, and rising operational costs, our team has remained resolute and dedicated to delivering excellence. I extend my sincere gratitude to all our employees for their hard work and unwavering dedication, which have been pivotal to our success in the first half of 2024.
“I also wish to express our profound appreciation to our loyal customers, whose trust in the Union Bank brand has been unwavering. Their loyalty and continued patronage have been essential to our success, and we are dedicated to serving them with excellence. Additionally, we acknowledge the invaluable support from our regulators as we navigated the intricacies of our operational landscape.
“In accordance with the realities of our environment, the bank has commenced the process of recapitalization. The Banking Sector Recapitalization Program, introduced by the Central Bank of Nigeria (CBN), mandates banks to raise their minimum paid-in common equity capital to a specified level by April 2026, based on their license category and authorization. This strategic initiative aims not only to align our capital adequacy with regulatory standards but also to surpass them, thereby strengthening our financial stability and positioning us to capitalize on emerging market opportunities.
“As we progress, our focus remains on building a controlled, compliant, and profitable organization. We are committed to upholding robust governance frameworks, ensuring regulatory compliance, and driving sustainable profitability. These pillars will not only bolster our financial stability but also position us to seize emerging market opportunities. I am confident that with our continued focus on these priorities, we will sustain our positive momentum and deliver long-term value to our stakeholders.”
Discussing the H1 2024 figures, Acting Chief Financial Officer Oluwagbenga Adeoye stated: “Our financial performance in H1 2024 is a testament to the Bank’s resilience despite a sluggish start, influenced by the high inflationary environment, exchange rate volatility, increased power costs, and other factors.
“Nevertheless, we were not completely shielded from these impacts as Non-Interest Income marginally decreased by 3% in H1 2024 to ₦108.3bn from N112.1bn in H1 2023 due to foreign exchange revaluation losses. Operating Expenses surged by 52% to N63.8bn compared to N42bn in H1 2023, primarily due to the high inflationary environment, increased power costs, and escalated non-discretionary regulatory expenses. Nonetheless, our Cost to Income Ratio remains below 50% at 44%, compared to 39% recorded in H1 2023, due to the implementation of planned cost-efficiency measures.
“The Bank continued to cautiously expand its loan portfolio, with gross loans rising by 24% to ₦1.93 trillion compared to ₦1.55 trillion in December 2023. Customer deposits saw a marginal increase of one percent to ₦2.36 trillion from ₦2.34 trillion in December 2023, reflecting the impact of socio-economic pressures on our operational environment.
“In the latter part of the year, we will concentrate on enhancing efficiency and boosting our non-interest income. We are confident that we will conclude the year strongly and maintain the returns on equity and returns on assets, which stood at 40.6% and 3.68%, respectively.”
Further analysis of the Bank’s performance during the reviewed period revealed that its net operating income after impairments surged to N143.6 billion from N108.5 billion in 2023, marking a 32% growth. Non-interest income marginally decreased by three percent to ₦108.3 billion from N112.1 billion during the corresponding period in 2023 due to foreign exchange revaluation losses.
Operating expenses notably increased by 52% to ₦63.8 billion from N42 billion in the corresponding period of 2023, driven by the inflationary environment, rising power costs, and increased non-discretionary regulatory expenses.
Similarly, the gross loans increased by 24% to ₦1.93 trillion from N1.55 trillion in December 2023, while customer deposits marginally rose by one percent to ₦2.36 trillion from N2.34 trillion in December 2023, reflecting the impact of the challenges posed by the socio-economic environment on its operations.
About Union Bank Plc:
Established in 1917 and listed on the Nigerian Stock Exchange in 1971, Union Bank of Nigeria Plc is a renowned and respected financial institution with a rich history.
The Bank is a trusted and recognizable brand with a widespread network of over 300 branches across Nigeria. It currently offers a wide range of banking services to both individual and corporate clients, including current, savings, and deposit account services, funds transfer, foreign currency services, loans, overdrafts, equipment leasing, and trade finance.
The Bank also provides customers with convenient electronic banking channels and products, such as Online Banking, Mobile Banking, Debit Cards, ATMs, and POS Systems. For more information, visit www.unionbankng.com. Media inquiries can be directed to mediarelations@unionbankng.com.
