Q3: Union Bank’s profit increases by 14%

UNION Bank, one of Nigeria’s longest standing and most respected financial institutions, has made 14 per cent growth in its Profit Before Tax as indicated in its unaudited financial statements for the nine month period ended September 30 2018.

According to the financial results submitted to the Nigerian Stock Exchange (NSE), the Bank’s Profit before tax went up 14 per cent to N14.9 billlion for the period under review as against N13 billion in Q3 2017.

Gross earnings of the institution also went up 12 per cent to N122.2 billion, driven by higher earning assets and a 46 per cent growth in non-interest income.

Further analysis into the Bank’s financial statement indicated that the operating expenses went up 18 per cent to N58.0 billion as against N49.0 billion in Q3 2017, driven mostly by a 28 per cent increase in regulatory levies.

Commenting on the results, Emeka Emuwa, CEO said: “In the third quarter of the year, our numbers continue to track strongly across all performance metrics. The Group’s gross earnings grew by 12 per cent to N122.2 billion from N109.5 billion in Q3 2017.

Profit Before Tax (PBT) is up 14% to N14.9 billion compared to Q3 2017 as a result of strong treasury trading income, intensified recoveries and a 144 per cent growth in alternate channel revenues.

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“The Non-Performing Loan (NPL) ratio is down to 9.8% from 10.8% as at H1 2018 as asset quality continues to strengthen as we realize more recoveries while continuing to selectively grow our loan book with high-quality risk assets.

“Leveraging positive investor confidence in the Bank, we concluded a successful inaugural issuance of Series I and II bonds under our newly-registered N100billion bond program. We will remain focused on driving and enhancing productivity across the Bank to ensure we deliver on our expectations for the year.”

Speaking on the Q3 2018 numbers, Chief Financial Officer, Joe Mbulu said: “Notwithstanding our deposit book growth, our focus on optimizing our funding costs ensured that they remained flat year-on-year. This drove profitability from gross revenues to the bottom line, with higher net revenue from funds (after impairment) in the period.

Our foreign currency deposits are up 37 per cent compared with December 2017, as we continued to optimize our balance sheet. Notwithstanding a challenging macroeconomic backdrop, we are judiciously growing the Group loan book, which is up by five per cent from N560.7 billion as at December 2017 to N588.9 billion as at the end of Q3 2018.

The Bank remains adequately capitalized to pursue its growth ambitions with Capital Adequacy Ratio (CAR) at 16.8 per cent” he said.