Wednesday, April 03, 2019 11:35AM / NSE
Union Bank of Nigeria announces its audited financial statements for the year ended 31st December 2018.
the successful execution of our debut local currency bond issue to raise
and the tightening up of our loan portfolio, Union Bank is well positioned to
continue executing key business priorities in 2019.
Group Financial Highlights:
Key Operational Highlights:
Product & Service Innovation
Brand & Citizenship
Awards & Recognition
Speaking on the Group’s results for the year, the MD/CEO Emeka Emuwa said:
“Our priorities in 2018 were three pronged; enhancing our productivity across board; tightening up our loan portfolio (especially resolving key large exposures which drove NPLs up significantly at the end of 2017); and optimizing the Bank’s capital and funding base.
I am pleased to report that we made significant strides in each focus area. Notwithstanding a depressed economic environment and a challenging operating landscape, our efforts to optimise productivity delivered results. Union Bank’s Group Profit Before Tax (PBT) is up 33% to ₦18.5 billion in 2018 from ₦13.9 billion in 2017. As consumer confidence in the brand continues to grow, customer deposits also continue to grow, up 7.3% to ₦857.6 billion in 2018 from ₦802.4 billion in 2017. Our Net Revenues After Impairments are also up 16% to ₦93.5bn compared to ₦80.6bn in 2017 with significant contribution from growth in retail transaction volumes across our channels.
Through an aggressive focus on recoveries and recognising fully provisioned loans on our books, we successfully reduced the Bank’s NPL ratio, which is now down to 8.1% in 2018 from 20.8% at the end of 2017, in line with guidance provided at the start of the year. In 2019, we will continue to maintain focus on recoveries while prudently rebuilding our loan book and maintaining a conservative risk profile.
On the funding side, we successfully initiated the first tranche of our oversubscribed local currency bond programme to raise ₦13.5 billion. We are encouraged by the market and investor community response to the bond issue and subsequent listing on the FMDQ platform as we continue our drive to optimize the Bank’s capital and funding structure.
In 2019, we will double-down on our productivity efforts to deliver our financial targets. We are harnessing synergies across our business segments to ensure we maximize opportunities across entire value chains, while centralising key business and operational functions for better efficiency, and prioritizing customer experience across all our touchpoints.
We are also pleased to be introducing our women focused initiative, αlpHer, which will provide a portfolio of financial and non-financial services to women across customer segments in Nigeria.
Lastly, we have commenced the Long-Term Efficiency Acceleration Programme (LEAP), a comprehensive transformation effort to embed cost discipline across the Bank. We believe LEAP will deliver significant cost savings in 2019 and entrench a culture of efficiency across all areas of the Bank.”
Chief Financial Officer, Joe Mbulu, commenting further on the 2018 results said:
“Gross revenues declined by 11% to ₦145.5 billion in 2018 from ₦163.8 billion in the previous year as a direct consequence of the loan book clean-up and resolution of key exposures.
Notwithstanding significant investments to execute our strategy including expanding our agency banking footprint and aligning compensation with market for our entry to mid-level employees (which increased operating expenses by 12% from ₦66.7bn in 2017 to ₦75.0bn as at December 2018), we are pleased that our core business delivered a 33% growth to our topline PBT. Through LEAP, we will ensure that operating expenses in 2019 remain within the Bank’s targets.
Our Return on Tangible Equity (ROTE) improved to 9.6% from 6.2% in 2017 demonstrating long-term shareholder value enhancement.
In addition to our successful fund raising activities during the year, we will further support future growth and creation of high quality risk assets in 2019 through a Tier II capital raise. This will boost our Capital Adequacy Ratio, which is currently at 16.4% and remains above the regulatory limit.