By Kayode Tokede
Union Bank of Nigeria Plc on Thursday reported 1.4 per cent increase in profit to N11.5billion in unaudited result and accounts for half year (H1) ended June 31, 2021 from N11.3billion reported in prior half year unaudited result and accounts.
The increase in profit was driven by higher noninterest income.
The lender on the Nigerian Exchange Limited (NGX) on Thursday reported 6.1 per cent drop in gross earnings to N75billion in H1 2021 from N79.9billion in H1 2020 to reflect a low interest environment.
The group’s total assets inched up by 0.9 per cent to N2.2trillion as at June 30, 2021 from N2.19 trillion it closed full year ended December 31, 2020.
The group thus reported 5.6 per cent increase in gross loans & advances to N778.1 billion as at June 30, 2021 from N736.7billion reported in 2020 FY as customers’ deposits rose by 3.6 per cent to N1.17trillion as at June 30, 2021 from N1.13trillion reported in 2021 FY
The CEO, Union Bank of Nigeria, Mr. Emeka Okonkwo in a statement said: “I am pleased that our business has remained resilient in the face of a persistently challenging economic environment.
“The Bank delivered a 1.4per cent growth in Profit Before Tax (PBT), recording N11.5 billion in H1 2021 compared to N11.3 billion in H1 2020. This steady performance reflects our successful efforts in turbo charging transaction volumes, which have delivered higher net fees and commission income, as well as a concerted focus on debt recoveries.
“While the industry continues to be impacted by lower interest rate environment, we have reinforced our branches and the network to aggressively mine opportunities and value across our entire geographic footprint. This is part of a deliberate shift towards being closer to the customer.
“Consequently, we have seen our Retail loan book and revenues grow by 14per cent and 10per cent respectively and expect to continue to see robust growth across all business segments as this new structure becomes further entrenched.
“In June, we launched the ‘Save & Win Palli Promo,’ a nationwide campaign to reward new and existing customers with up to N55 million. During the promo period (June to December), customers who save a minimum amount of N10,000 monthly will be eligible to win cash prizes and gifts to encourage a savings culture even in the current economic climate. The campaign also provides an opportunity for the Bank to bring some relief to customers who have been impacted by the economic hardship brought on by the COVID19 pandemic.
“Looking ahead to the second half of the year, we will continue to focus on driving productivity across the entire network to deliver our business objective.”
Speaking on the H1 2021 numbers, Chief Financial Officer, Union Bank of Nigeria, Joe Mbulu said: “Our focus on efficiency has helped drive growth in Profit Before Tax to N11.5 billion. Noninterest income increased by 22per cent during the period, driven by recoveries which grew by 226per cent to N8.6 billion from N2.6 billion, while net income from other financial instruments rose by 139per cent to N4.5 billion from N1.9 billion.
“These achievements counteracted the impact of the low interest rate environment seen in the market and its impact on net interest margins for the period. Deposits increased by four per cent to N1.2 trillion while our risk assets also grew by six per cent to N778.1 billion compared to year-end 2020.
“Our capital position remains strong with a Capital Adequacy Ratio of 16.1per cent and nonperforming loan ratios at 4.3per cent. Furthermore, our coverage ratio remains robust at 166per cent.
“We continue to sustain our strong foundation as we move into the second half of the year.”