Union Bank shareholders laud return to profitability approve N50bn rights issues

Union Bank of Nigeria (UBN) shareholders has applauded the bank’s board of management for returning the company to profitability.

At the bank’s 48th Annual General Meeting (AGM) held in Lagos recently, shareholders praised the bank’s improved performance and corporate governance policy, while urging the management to consolidate the performance.

Following approvals from shareholders, Union Bank will launch a rights issue in the second quarter of 2017 to raise up to Fifty Billion Naira (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 the bank to maintain compliance with regulatory capital requirements.

Speaking on behalf of other shareholders, Mr Moses Igbrude, the General Secretary, Independent Shareholders Association of Nigeria (ISAN), said the bank had made remarkable efforts to return to profitability, while charging the bank on the need to be more innovative, especially in the areas of technology advancement, to enable them to woo back customers that exited the bank in the past.

Also speaking, Mr Timothy Adesiyan,  President, Nigeria Shareholders Solidarity Association (NSSA), called on the bank to improve on its digital banking segment to increase visibility, noting that this would attract more customers into the bank which would ultimately boost their deposit.

Mr Cyril Odu,  the chairman of the bank,  while reviewing the bank’s performance, said that it had grown its new bank customers strategy by nearly 70  per cent increase in 2016.

Odu said that the bank would focus more on innovation to drive its business operations, adding that it identified growth opportunities in the economy and leveraging such to develop stronger brands.

?Union Bank, one of Nigeria’s most respected financial institutions has reported a profit after tax (PAT) of N15.4billion on gross earnings of ?126.6 billion for the financial year ended December 31, 2016.

The Chairman of the bank, Cyril Odu presented the report to shareholders at the 48th Annual General Meeting in Lagos on May 10th, 2017. Compared with a PAT of N14.3 billion on gross earnings of N117.2 billion in the corresponding period of 2015, this represents a growth of eight per cent in net profit and in earnings respectively.

Other highlights of the bank’s financial performance in 2016 show that interest income grew by eight per cent to N98 billion from N90.9 billion in 2015, as a result of growth in the loan book and improved asset yields while non-interest revenue also moved up by nine per cent to N28.6 billon from N26.2 billion in 2015 owing to income from e-business channels.

Operating expenses (OPEX) increased by seven per cent to N62 billion from N57.9 billion in 2015 due to inflationary and devaluation pressures and ongoing investments in the bank’s technology and network infrastructure while gross loans grew by 38 per cent to N535.8 billion compared to N388.8 billion in 2015.

Customer deposits rose by 15 per cent to N658.4 billion (from N570.6 billion in 2015). The growth was led by new product offerings, increased market penetration and improved customer off take.

Speaking on the Group’s results for the year, Group Managing Director/Chief Executive, Emeka Emuwa said, “In 2016, we focused on executing our priorities across all our 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, customer-centred product development strategy, coupled with an upskilled sales force and targeted marketing campaigns boosted our customer deposit base by 15 per cent compared to 2015, and led to 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.”

Following approvals from shareholders, Union Bank will launch a rights issue in the second quarter of 2017 to raise up to Fifty Billion Naira (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 the bank to maintain compliance with regulatory capital requirements.