Delayed tax payment: Union Bank’s deferred tax liabilities rises by N0.28bn 

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The deferred tax liabilities of Union Bank of Nigeria (UBN) increased to N280million in nine months ended September 30, 2020. This is contrary to the quest for higher tax revenue by the Federal Government to reduce dependence on volatile oil revenue.

The lender closed full financial year ended December 31, 2020 with N226 million deferred tax liabilities, our correspondent gathered.

The bank in its nine months unaudited results reported N336million tax expenses as against N192million tax expenses in nine months ended September 30, 2019.

Deferred tax liability is a tax that is assessed or is due for the current period but has not yet been paid. A deferred tax liability records the fact the company will, in the future, pay more income tax because of a transaction that took place during the current period, such as an installment sale receivable.

However, the bank recorded modest growths across key performance indices with gross earnings rising by six per cent to N118.8 billion.

Key extracts of the nine-month report for the period ended September 30, 2020 shows that gross earnings rose zxfrom N111.9 billion recorded in third quarter 2019 to N118.8 billion in third quarter 2020. Interest income had inched up from N84.9 billion to N85.4 billion.

The report also shows that non-interest income rose by 23 per cent from N27.1 billion to N33.4 billion, driven largely by increased trading income and asset revaluation gains. Net operating income inched up from N68.7 billion to N69.3 billion.

Operating expenses was flat at N53.4 billion in 2020 as against N53.2 billion in 2019. Profit before tax inched up by two per cent from N15.5 billion to N15.9 billion.

The balance sheet shows that gross loans rose by 14 per cent to N678 billion by September 2020 from N595.3 billion in December 2019, which the bank attributed to the impact of its targeted lending to the real sector. Customer deposits also increased by 28 per cent to N1.1 trillion by September 2020 as against N886.3 billion in December 2019.

The bank attributed the increase in customers deposit to gains on its investments in customer-led products and digital channels which resulted in the acquisition of over 600K new-to-bank customers and deepening of wallet share of existing customers.

Chief Executive Officer, UBA Plc, Mr. Emeka Emuwa, said the results reflected increasing customer loyalty amid intense retail drive.

According to him, the bank’s customer acquisition strategy has been reinforced by the versatility of its digital platforms and channels which continue to drive customer satisfaction.

While acknowledging cautious extension of credit to the real sector, he said the bank would continue to explore bankable lending opportunities in the Nigerian economy guided by its robust risk management practices.

“The civil unrest which erupted in October which led to significant destruction of property and small businesses across the country, will have real impact on business and the operating environment; and even as restrictions have eased, COVID-19 also remains a present threat in our day to day operations.

“Heading into the final stretch in 2020, our overarching commitment is to the health and wellbeing of our employees and the safety of our customers. Showing up for our communities is also at the core of who we are and therefore we will work with our partners and through our corporate citizenship initiatives to support individuals, businesses and our communities where we operate as we begin to rebuild and heal as a country,” Emuwa said.