Union Bank posts N13.3b pre-tax profit in Q3
Union Bank of Nigeria (UBN) Plc has announced its earnings for the third quarter, showing 27 per cent growth in pre-tax profit to N13.3 billion within the period.
The bank also saw considerable growth in the top-line as gross earnings rose by 12 per cent to N93.4 billion.
The interim report and account for the Union Bank Group for the nine-month period ended September 30, 2016 released at the Nigerian Stock Exchange (NSE) showed that group gross earnings rose by 12 per cent to N93.43 billion in third quarter 2015 as against N83.72 billion recorded in comparable period of 2015. Interest income had grown from N66.91 billion to N70.96 billion. Net interest income improved by 19 per cent from N40.27 billion to N48.07 billion. Non-interest income also grew by 35 per cent from N16.67 billion to N22.47 billion. Profit before tax rose by 27 per cent to N13.3 billion in third quarter 2015 compared with N9.6 billion in third quarter 2015. After taxes, net profit also rose from N9.34 billion to N13.01 billion. With these, earnings per share improved from 55 kobo in 2015 to 76 kobo in 2016.
Key underlying ratios were generally positive. Net interest margin, which underlines the profitability of the core banking operations, improved from 8.1 per cent to 8.8 per cent. Cost-to-income ratio also improved to 63 per cent as against 76 per cent in comparable period of 2015. Return on equity increased to 6.9 per cent as against 5.5 per cent while return on assets improved from 1.2 per cent to 1.6 per cent.
Group total balance sheet size expanded to N1.22 trillion by September 2016 compared with N1.05 trillion recorded by the close of the year ended December 31, 2015. Gross loans and advances also rose within the nine-month period by 37 per cent from N388.8 billion in December 2015 to N534.4 billion by September 2016. Customersdeposit improved from N570.6 billion to N631.9 billion. Shareholders’ funds also increased from N238.6 billion to N253.1 billion.
Commenting on results, the chief executive officer, Union Bank of Nigeria (UBN) Plc, Emeka Emuwa, said the results were encouraging and they underlined the successes of the many strategies driving the bank’s core banking operations and its thriving retail business.
“We are encouraged by this performance which comes in the face of a recessionary environment, increased impairments and headwinds in our trade business due to scarcity of foreign exchange. Our steady effort to build a low cost, customer centric retail business over the past 18 months is demonstrating results and continues to win us a new, growing retail customer base,” Emuwa said.
He assured that while the operating environment remains a challenge, the bank will continue to focus on executing its strategy, defending its loan book and adhering to prudent risk management principles.
Chief financial officer, Union Bank of Nigeria (UBN) Plc, Oyinkan Adewale noted that the bank had continued to manage its cost of funds, which resulted in 14 per cent reduction in interest expenses year-on-year, notwithstanding growth in customer deposits and increase in medium term borrowings.
“Our cost optimisation initiatives continue to yield good results; cost-to-income ratio has improved to 62 per cent from 70 per cent in the previous year. Cost-to-income is buoyed by income and operating expenses in line with expectations in spite of inflationary and devaluation pressures. We will continue to implement our cost discipline initiatives across the Bank to stay within our cost targets,” Adewale said.