WorldStage Newsonline– Union Bank of Nigeria Plc has released its audited financial statements for the year ended 31st December 2021 profit after tax down by 22.2% to N19.2 billion from N24.6 billion in the face of macroeconomic headwinds.
Union Bank financial highlights showed that gross earnings: up 8.9% to ₦175.0bn (₦160.7bn in FY 2020), driven by strong noninterest income; non-interest income: up 26.7% to ₦55.7bn (₦44.0bn in FY 2020) driven by significant increases in debt recoveries; net operating income after impairments: down 3.6% to ₦99.7bn (₦103.4bn in FY 2020); profit before tax: down by 19.3% to ₦20.5bn (₦25.4bn in 2020); operating expenses: marginally grew by 1.5% to ₦79.1bn (₦78.0bn in FY 2020), reflecting tight cost control despite inflationary pressures; gross loans: up 22% at ₦899.1bn (₦736.7bn in Dec 2020) as we expand our lending to key economic sectors of opportunity; and customer deposits: up 20.4% at ₦1.4trillion (₦1.1 trillion in Dec 2020) as we continue to expand our product base and digital channels.
Commenting on the results, Emeka Okonkwo, CEO said: “Following an enhancement to our operating and go-to-market model to deliver better performance and efficiency leveraging our network across the regions, we are increasing our customer engagement and product penetration which is translating into higher customer revenues across geographies.
“On the back of this, the Bank has continued to record headline growth by diversifying our income streams and accelerating our recoveries programme.
“For the full year, our gross earnings grew by 8.9% from N161bn to N175bn, while our net operating income after impairments dropped by 3.6% to N99.7bn from N103.4bn. Interest income grew by 1% as our earnings asset base expanded with a growing loan book.
“We continued our strong growth in non-interest income through a combination of aggressive recoveries, which grew 119% in the period, from N7.2bn to N15.9bn and further growth in fee and commission income (33%) and e-business (26%). These were delivered on the back of sustained multi-channel growth in users, volume and value across our digital and agent channels. Total active UnionMobile users now stands at 3.3 million, up 20% while our Union360 customer base grew by 22% to 26,400.
“In 2022, the Bank will continue to focus on broadening and deepening the strong foundations we have built, while enhancing our digital delivery platforms and service propositions to customers. We remain deeply thankful to our erstwhile core investors, Union Global Partners and Atlas Mara who have been instrumental to our journey since 2012. Their invaluable support and expertise helped steer the Bank through turbulent waters and into an era of growth and stability.
“As we turn a new chapter for our Bank with a new core investor expected to come on board, we are proud of the solid foundation built over the last ten years and look forward to a seamless transition and continued successes in the future.”
Speaking on the FY 2021 numbers, Chief Financial Officer, Joe Mbulu said: “We maintained very strong cost controls during the year despite the inflationary pressures and the translation effect of currency depreciation on our cost base. Operating expenses increased marginally by 1.5% with increasing regulatory, depreciation and amortisation costs.
“Customer deposits grew by 20% while our loan book grew by 22% from N736.7bn to N899.1bn, as we deepened support for key sectors in the economy.
“We have been remained proactive in the way we manage our growing risk assets, maintaining our asset quality during the year with our NPL ratio growing marginally from 4% to 4.3%.”
In December 2021, Union Bank’s core investors – Union Global Partners Limited and Atlas Mara – notified the Board of Directors of a Share Sale and Purchase Agreement (SSPA) reached with Titan Trust Bank (TTB) for the proposed sale of 89.39% of Union Bank’s issued share capital. The agreement comes a decade after the initial investment by the core investors in 2012 and will effectively transfer majority ownership of the Bank to TTB. The transaction is in the process of final regulatory approvals.
Consequently, the transaction also triggers the hive-out of Union Bank UK (“UBUK”) which was approved by shareholders in an Extra-Ordinary General Meeting on 29th March 2022. This allows the Bank transition from an international to a national focus, facilitating a more flexible and efficient deployment of capital towards strategic opportunities identified within sectors of the Nigerian economy.
