Union Bank Maintains Positive Performance with N5.4bn Profit in Q1

Despite the challenging operating environment that pervaded the first quarter (Q1) of 2019, Union Bank of Nigeria Plc sustained an impressive performance with profit before tax of N5.4 billion.

The unaudited results showed that Union Bank ended the Q1 with gross earnings of N37.7 billion, indicating a decline of five per cent from N39.5 billion in 2018.

Non-interest income rose 39 per cent from N7.8 billion to N10.8 billion, an outcome of ongoing debt recovery efforts, improved fees and commission income and dividends from investments.

Profit before tax stood at N5.4 billion in 2019, same level posted in 2018, while it ended the Q1 with profit after tax (PAT) of N.5.3 billion, same figures as in 2018.

Gross loans rose five per cent to N494.9 billion, from N473.5 billion, while customers’ deposit witnessed a growth of one per cent from N857.6 billion in December 2018 to N857.6 billion in Q1 of 2019.

According to the Chief Executive Officer of Union Bank, Mr. Emeka Emuwa, the focus of the bank in 2019 is to leverage our platform to deliver efficiency and seek to maximize value across all areas of the Bank.

“In a low yield environment, the group’s non-interest income growth compensated for the slowdown in interest income stemming from the optimisation of our loan portfolio in 2018. Consequently, Profit Before Tax (PBT) was maintained at N5.4 billion, consistent with Q1 2018.

In line with our priorities, we recorded a material improvement of 819 per cent in loan recoveries with N2.8 billion recovered during the period. Our asset quality continues to improve, with non-performing loans (NPLs) down to 7.8 per cent from 8.7 per cent as at December 2018.

We are employing a multi-pronged approach focused on increasing revenue and optimising cost to ensure we deliver enhanced performance in 2019,” Emuwa said.

Also speaking on the results, the Chief Financial Officer of Union Bank, Mr. Joe Mbulu said: “The group’s resilience in a challenged environment is demonstrated in these first quarter numbers.

While gross earnings declined by five per centto N37.7 billion from N39.5 billion in Q1 2018 due to loan book resolutions from the previous year, our non-interest income grew by 39 per cent from N7.8 billion to N10.8 billion driven by recoveries, credit-related fees and dividends from investments.”

He disclosed that with the commencement of the bank’s Long-term Efficiency Acceleration Programme (LEAP), it expects to record savings on the expense line in 2019.

“Notwithstanding a challenging macro-economic backdrop, the group improved return on equity to 9.3 per cent from 6.8 per cent as at December 2018.The bank remains well capitalised with a Capital Adequacy Ratio (CAR) of 16.5 per cent, which provides room to grow quality risk assets as the economy recovers,” he said.

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