Union Bank of Nigeria (UBN) Plc grew its net profit by 39 per cent to N18.1 billion in 2018 as improved credit risk management and reduction in credit impairment boosted the bank’s overall performance.
Key extracts of the audited report and accounts of Union Bank for the year ended December 31, 2018 showed that gross earnings dropped by 11 per cent from N163.8 billion in 2017 to N145.5 billion in 2018. Net interest income declined by 17 per cent from N66.7 billion to N55.4 billion while non-interest income also dropped from N39.3 billion to N35.2 billion.
With 113 per cent reduction in credit impairment, net income after impairments increased by 16 per cent from N80.64 billion to N93.5 billion. Profit before tax thus increased by 33 per cent from N13.9 billion to N18.5 billion. Profit after tax also rose from N13 billion to N18.1 billion. Earnings per share however declined by 11 per cent from 72 kobo in 2017 to 61 kobo in 2018.
The bank’s group balance sheet increased marginally by one per cent from N1.455 trillion in 2017 to N1.464 trillion in 2018. Customers deposit rose by seven per cent from N802.4 billion to N857.6 billion. Non-performing loan ratio for the bank improved from 20.8 per cent in 2017 to 8.1 per cent in 2018. Shareholders’ funds however dropped by 34 per cent from N337.7 billion in 2017 to N225.6 billion in 2018. Net asset value per share thus reduced from N11.79 in 2017 to N7.75 in 2018.
Managing Director, Union Bank of Nigeria (UBN) Plc, Mr Emeka Emuwa said the bank made significant strides in its areas of focus in 2018 despite the challenging operating landscape.
According to him, the bank’s priorities in 2018 were three pronged- enhancing its productivity across board, tightening up loan portfolio especially resolving key large exposures which drove non-performing loans up significantly at the end of 2017 and optimising the bank’s capital and funding base.
He pointed out that through an aggressive focus on recoveries and recognising fully provisioned loans on its books, the bank successfully reduced its non-performing loan ratio in line with guidance provided at the start of the year.
He noted that with the successful execution of its debut local currency bond issue to raise N13.5 billion and the tightening up of its loan portfolio, Union Bank is well positioned to continue executing key business priorities in 2019.
“In 2019, we will continue to maintain focus on recoveries while prudently rebuilding our loan book and maintaining a conservative risk profile,” Emuwa said.
He outlined that in the new business year, the bank will double-down on its productivity efforts to deliver its 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, álpHer, which will provide a portfolio of financial and non-financial services to women across customer segments in Nigeria,” Emuwa said.
He noted that the bank has commenced its Long-Term Efficiency Acceleration Programme (LEAP), a comprehensive transformation effort to embed cost discipline across the bank with a view to delivering significant cost savings in 2019 and entrench a culture of efficiency across all areas of the bank.
Chief Financial Officer, Union Bank of Nigeria (UBN) Plc, Joe Mbulu, explained that the decline gross earnings was due to the loan book clean-up and resolution of key exposures.
He noted that notwithstanding significant investments to execute strategy including expanding agency banking footprint and aligning compensation with market for entry to mid-level employees, which increased operating expenses by 12 per cent, the bank ‘s core business delivered a 33 per cent growth to top-line pre-tax profit.