Wednesday, September 31, 2018/ 07.19PM / NSE
Union Bank, one of Nigeria’s longest standing and most respected financial institutions, announces its unaudited financial statements for the nine month period ended September 30 2018.
Group Financial Highlights:
Profit before tax: up 14% to ₦14.9bn (₦13.0bn in Q3 2017).
Gross earnings: up 12% to ₦122.2bn (₦109.5bn in Q3 2017), driven by higher earning assets and a 46% growth in non-interest income.
Interest income: up 3% to ₦91.5bn (₦88.5bn in Q3 2017).
Net interest income before impairment: up 5% to ₦49.4bn (₦46.9bn in Q3 2017); continuously led by increased earning assets.
Non-interest income: up 46% to ₦30.8bn (₦21.0bn in Q3 2017); a result of intensified recovery efforts, continued improvements in alternative channel revenues and treasury trading gains.
Net operating income: up 17% to ₦72.8bn (₦62.0bn in Q3 2017).
Operating expenses: up 18% to ₦58.0bn (₦49.0bn in Q3 2017); driven mostly by a 28% increase in regulatory levies.
Gross loans: up 5% to ₦588.9bn (₦560.7bn Dec 2017) as we begin to selectively create new risk assets across various business lines.
Customer deposits: up 10% to N882.2bn (N802.4bn Dec 2017); showing a 37% increase in foreign currency deposits (excluding impact of devaluation) alongside a growing low-cost deposit book.
Commenting on the results, Emeka Emuwa, CEO said:
“In the third quarter of the year, our numbers
continue to track strongly across all performance metrics. The Group’s gross
earnings grew by 12% to
N122.2 billion from N109.5
billion in Q3 2017. Profit Before Tax (PBT) is up 14% to N14.9
billion compared to Q3 2017 as a result of strong treasury trading income,
intensified recoveries and a 144% growth in alternate channel revenues.
The Non-Performing Loan (NPL) ratio is down to 9.8% from 10.8% as at H1 2018 as asset quality continues to strengthen as we realize more recoveries while continuing to selectively grow our loan book with high quality risk assets.
Leveraging positive investor confidence in the Bank, we concluded a successful inaugural issuance of Series I and II bonds under our newly-registered N100 billion bond program. We will remain focused on driving and enhancing productivity across the Bank to ensure we deliver on our expectations for the year.”
Speaking on the Q3 2018 numbers, Chief Financial Officer, Joe Mbulu said:
“Notwithstanding our deposit book growth, our focus on optimizing our funding costs ensured that they remained flat year-on-year. This drove profitability from gross revenues to the bottom line, with higher net revenue from funds (after impairment) in the period.
Non-Interest Income (NII) is up by 46% compared to
prior year as recoveries grew by 94% to
N3.9 billion during the
period, up from N2.0 billion in Q3 2017 and fee and commission
income grew 22% in the same period driven by higher transaction volumes. In
addition, the Bank also benefitted from opportunistic treasury trading income
realized in the period.
Our foreign currency deposits are up 37% compared with
December 2017, as we continued to optimize our balance sheet. Notwithstanding a
challenging macro-economic backdrop, we are judiciously growing the Group loan
book, which is up by 5% from
N560.7 billion as at December 2017
to N588.9 billion as at the end of Q3 2018.
The Bank remains adequately capitalized to pursue its growth ambitions with Capital Adequacy Ratio (CAR) at 16.8%.”