Union Bank to pay dividend after 11 years, increases profit by 33%

FOR the year ended December 31, 2019, having posted 33 per cent increase in its Profit before Tax, The board of Union Bank of Nigeria Plc has proposed to pay shareholders of the company a dividend 25 kobo per share, after 11 years.

According to the information provided to the Nigerian Stock Exchange (NSE), subject to shareholders’ approval, the board of directors of Union Bank intends to pay a dividend, since 2008, when there was a global crash in the financial market.

Also the bank, for the period under review, posted a profit before tax of  N24.7 billion, having went up by 33 per cent to from N18.7 billion in the previous fiscal year.

The tier-two lender also grew is gross earnings by 14 per cent to N159.9 billion from N140.1 billion in FY 2018, majorly driven by an increase in earning assets, while the interest income went up by 11 per cent to N116.5 billion from N104.8 billion in FY2018, just as the net interest income before impairment increased by one per cent to N51.7 billion from N50.9 billion in FY2018.

In addition, the non-interest income rose by 23 per cent to N43.3 billion from N35.3 billion in the previous year and this was influenced by growth in fees and commission income as well as recoveries.

Union Bank disclosed in the financial statements that its net operating income went up by six per cent to N95.5 billion from N89.7 billion in FY2018, while operating expenses was trimmed to 0.4 per cent to N70.8 billion from N71 billion in FY2018 as a result of the management’s cost optimisation programme.

It was observed that gross loans increased by 20 per cent to N595.3 billion from N496.8 billion in 2018 in line with the lender’s drive to create quality risk assets across key economic segments of opportunity.

The strength of the brand in a very competitive environment, the customer deposits increased by five per cent from N844.4 billion to N886.3 billion in 2018.

Commenting on the results, Emeka Emuwa, CEO said “The Bank’s strong overall performance has paved the way for a critical milestone. With the approval of the Central Bank of Nigeria, the Board of Directors will recommend a dividend payment to shareholders for the first time in over a decade. Returning value to our shareholders has been at the core of Union Bank’s transformation and continuous drive to become a leading financial institution in Nigeria.

Consistent with our vision to be Nigeria’s ‘most reliable and trusted banking partner’ we are optimising our business model to focus solely on Nigeria where we continue to invest and thrive. Consequently, we have made the strategic decision to divest of our UK subsidiary, Union Bank UK which will enable us focus on the distinct long-term opportunities in the Nigerian market. The divestment is expected to conclude in 2020 subject to regulatory approvals in Nigeria and the UK.”

Speaking on the FY 2019 numbers, Chief Financial Officer, Joe Mbulu said “Our Group numbers reflect the classification of our UK subsidiary as a discontinued operation in line with IFRS 5. This is reflected in both 2018 and 2019 numbers

We are proud of the top-line and bottom-line numbers the Bank delivered in 2019, owing largely to operational efficiencies and a laser focus on key deliverables.

Through our LEAP initiative, our focus on discretionary cost discipline led to a reduction of N2.4 billion on related cost lines driving overall expenses down.

“We will leverage our improved risk asset and capital base as we continue to rebuild our loan portfolio which we expect to be a significant driver of growth in 2020,” he said.

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