LAGOS, NIGERIA-MON, APRIL 29 2019-theG&BJournal-Emeka Emuwa, Union Bank CEO said rebalancing the bank’s deposit mix is key in the push to conservatively rebuild the loan book with high quality risk assets as the bank unveils plan to deliver efficiency and seek to maximize value across all areas of the Bank.
He said, ”our focus in 2019 is to leverage our platform to deliver efficiency and seek to maximize value across all areas of the Bank. We are employing a multi-pronged approach focused on increasing revenue and optimizing cost to ensure we deliver enhanced performance in 2019.”
UNION Bank, one of Nigeria’s longest standing and most respected financial institutions, is reporting earnings performance for Q1 2019 hampered mostly by bulging Operating Expenses and challenging environment over all.
Gross Earnings dropped 5% to ₦37.7bn (₦39.5bn in Q1 2018) driven by a lower loan book base and declining yields in the current interest rate environment while Profit Before Tax stayed unchanged at ₦5.4bn (₦5.4bn in Q1 2018).
Net Interest Income After Impairment dipped down 17% to ₦12.9bn (₦15.5 bn) in Q1 2018 on lower volume of earning assets.
The Bank’s Non-Interest Income grew by up 39% to ₦10.8bn (₦7.8bn in Q1 2018), ”an outcome of ongoing debt recovery efforts, improved fees and commission income and dividends from investments,” according to management. Net Operating Income was also up 3% to ₦23.9bn (₦23.3bn in Q1 2018).
Operating Expenses was up 4% to ₦18.5bn (₦17.9bn in Q1 2018), driven by investments to strengthen our work force and our treasury and transaction banking platforms.
Meanwhile, Gross Loans grew 5% to ₦494.9bn (₦473.5bn Dec 2018). Customer Deposits went up 1%to ₦867.2bn (₦857.6bn Dec 2018 ) driven predominantly by low cost deposits.
Speaking also on the Q1 2019 numbers, the Chief Financial Officer, Joe Mbulu said:
”With the commencement of our Long-term Efficiency Acceleration Programme (LEAP), we expect to record savings on the expense line in 2019. Not with standing a challenging macro-economic backdrop, the Group improved Return on Equity to 9.3% from 6.8% as at December 2018.”
The Bank remains well capitalized with a Capital Adequacy Ratio(CAR)of 16.5%, which provides room to grow quality risk assets as the economy recovers.
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