Following approvals from its shareholders, Union Bank will launch a rights issue in the second quarter of 2017 to raise up to N50 billion in Tier 1 capital as it looks to accelerate business growth and position as a leading commercial bank in Nigeria. The additional funding will also allow Union Bank to maintain compliance with regulatory capital requirements.
The bank priorities for 2017 which include raising Tier 1 capital is to execute its growth agenda across the retail, commercial and corporate businesses, particularly transaction banking and value chain.
The lender also has announced its audited financial statements for the year ended December 31, 2016 through the Nigerian Stock Exchange (NSE).
The group audited financial statements for the year ended December 31, 2016 indicated that its gross earnings rose by N9.379 billion or eight per cent to N126.6 billion from N117.2 billion recorded during the same period of 2015.
Union Bank profit before tax increased by six per cent to N15.7 billion from N14.9 billion in 2015.
Net revenue before impairment up 14 per cent to N93.6 billion from N81.9 billion in 2015.
While operating expenses (OPEX) rose seven per cent to N62.0 billion from N57.9 billion in 2015.
The gross loans up 38 per cent to N535.8 billion as against N388.8 billion recorded as at December 2015.
Its customer deposits increased from N570.6 billion in 2015 to N658.4 billion at the end of the year under review, which represented 15 per cent growth.
Speaking on the Group’s results for the year, Emeka Emuwa said “In 2016, we focused on executing our priorities across the different business segments, especially in the retail space, with an aggressive strategy to increase adoption of our alternate channels. Our success in this area, along with improved core interest earnings, contributed to pre-tax profit growth of six per cent, compared to 2015.
“Our research led product development strategy, coupled with an upskilled sales force and targeted marketing campaigns, propelled our customer deposit base by 15 per cent, compared to 2015, and a 73 per cent increase in new-to-bank customers.
“While the operating environment remains a challenge, we are focused on our 2017 priorities which include raising Tier 1 capital to execute our growth agenda across our retail, commercial and corporate businesses, particularly transaction banking and value chain.
Commenting further on the 2016 numbers, Chief Financial Officer, Oyinkan Adewale, said “On the back of strong customer deposits, the Bank reduced average interbank local currency borrowing by 75 per cent, leading to 141bps reduction in primary cost of funds and 17 per cent increase in net interest income.
“The Group continued to drive cost optimisation, with cost-income-ratio declining to 66.2 per cent from 70.7 per cent in 2015, notwithstanding a high inflation environment. We will continue to focus on optimising cost in 2017. As we look to raise additional capital to execute business priorities, we will maintain our prudent approach to growing our risk assets while aggressively growing low cost deposits.”
Union Bank also marks its centenary anniversary in 2017. The Bank will celebrate the 100-year milestone under three broad themes – Celebrate, Impact and Lead. According to Chief Executive Officer, Emeka Emuwa, “Our 100th anniversary presents a unique opportunity for Union Bank to frame its own story, highlighting our many successes over the last century and presenting our simpler, smarter vision of banking and corporate citizenship to a new generation of customers.”
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