UBN declares N9.2billion PAT in Q2 2017 Results,(SP:N5.43k)


Thursday, July 27, 2017 4.53PM / NSE



Union Bank of Nigeria Plc., one of Nigeria’s long-standing and most respected financial institutions, announces its unaudited results for the half year ended 30th June 2017.

Union Bank remains on course to meet its key 2017 business objectives, including plans to raise up to fifty billion Naira (N50 billion) in Tier 1 capital through a rights issue during the third quarter. The capital increase supports UBN’s strategy to accelerate business growth and position itself as a leading commercial bank in Nigeria. The rights issue is expected to launch in the third quarter once all regulatory approvals have been secured.

H1 2017 Financial Results

Group Financial Highlights:

Gross earnings: up 23% to 73.7bn (60.1bn in H1 2016).

Profit before tax: up 6% at 9.5bn (8.9bn in H1 2016).

Interest income: up 31% to 58.3bn (44.3bn in H1 2016) driven largely by Naira devaluation-fuelled foreign currency loan book growth.

Net interest revenue before impairment: up 2% to 31.7bn (30.9bn in H1 2016). Net interest margins tightened from 9.1% to 7.9%.

Net interest income: up 19% to 26.3bn (22.2bn in H1 2016); driven by a reduction in impairment charges.

Non-interest revenue: down 2% at 15.4bn (15.7bn in H1 2016).

Cost to income ratio: 68.7% (62.4% in H1 2016); reflects increased investments in the brand, continuing technology CAPEX investments and a high inflationary environment.

Gross loans: down 5% to 511.0bn (N535.8.bn Dec 2016); improved foreign exchange availability enabled optimizing of the foreign currency loan book.

Customer deposits: up 15% to 759.3bn (658.4bn Dec 2016); affirms the growing confidence of customers in the bank.

Commenting on Union Bank’s half year results, Mr. Emeka Emuwa, Chief Executive Officer said:

" As our centenary celebrations continue and with the launch of our 50 billion rights issue in the second half of the year, 2017 will remain a very busy year for the Bank. With our clear focus on enhancing the operational efficiency of the franchise, Gross Earnings grew by 23% in the first half of the year to 73.7 billion, from 60.1 billion in H1 2016.

In a challenged economy, the Group delivered Profit Before Tax (PBT) of 9.5 billion, a 6% growth over the corresponding period in 2016. Despite stiff competition, our sales strategy and competitive brand continue to provide positive momentum, with Customer Deposits growing by 15% from December 2016 to 759.3 billion at the end of the period.

In the second half of the year, our focus will centre on our rights issue launch; we will remain nimble to take advantage of emerging opportunities and while improving on service delivery to our customers."

Speaking on the first half numbers, Chief Financial Officer, Oyinkan Adewale, said:

"Improved foreign exchange availability enabled us to bring our foreign currency loan book down to 44% of total loans, from 50% at the end of 2016. 18% customer deposit growth in the Nigerian bank allowed us to bring Loans to Deposit Ratio down to 65% from 82% at the end of 2016. Sustaining low cost deposit generation momentum, we were able to improve our low-cost deposit base to 69% of total deposits, from 65% at the end of 2016.

The Group NPL ratio increased to 8.2%. This increase reflects the impact of a 5% decline in Gross Loans over the period, without which June 2017 NPL ratio would have been 7.82%. With total provision coverage in excess of 185%, NPLs remain extremely well covered.

Going into H2 2017, we will focus on optimising funding costs and continue to keep operating expenses in check, while applying sound risk management practices to minimize impairment costs to ensure we deliver a sustainable financial performance."

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