Union Bank, one of Nigeria’s longest standing and most respected financial institutions, announces its unaudited financial statements for the quarter ended September 30, 2020.
The Group reported N121.38 billion as Gross Earnings, up by 3.61% from N117.15 billion reported in 2019.
Profit after Tax for the nine month period was N15.069, down by 0.81% from N15.192 billion the previous year. Earnings per share of the Group for the period under review is 52 kobo.
With reference to the share price of N5.9, P.E ratio of 11.40x is estimated for Union Bank with earnings yield of 8.77%.
Commenting on the results, Emeka Emuwa, CEO said:
“Notwithstanding the realities of a tougher operating environment arising from the ripple effects of the Covid-19 pandemic, the Bank delivered a 6% growth in gross earnings from ₦111.9 billion in 9M 2019 to ₦118.8 billion in 9M 2020. In addition, net interest income before impairment rose by 15% to ₦41.7 billion, while non-interest income grew by 23% to ₦33.4 billion.
We reached a major milestone as our customer deposits crossed the ₦1 trillion mark this quarter, growing by 28% to ₦1.1 trillion compared to ₦886.3 billion at the end of 2019. This reflects increasing customer loyalty and our intense retail drive. Our customer acquisition strategy has been reinforced by the versatility of our digital platforms and channels which continue to drive customer satisfaction.
We grew our loan book by 14% to ₦678.0 billion from ₦595.3 billion in December 2019 as we cautiously extended credit to the real sector. We will continue to explore bankable lending opportunities in the Nigerian economy guided by our robust risk management practices.
The civil unrest which erupted in October and led to significant destruction of property and small businesses across the country, will have real impact on business and the operating environment; and even as restrictions have eased, Covid-19 also remains a present threat in our day to day operations.
Heading into the final stretch in 2020, our overarching commitment is to the health and wellbeing of our employees and the safety of our customers. Showing up for our communities is also at the core of who we are and therefore we will work with our partners and through our corporate citizenship initiatives to support individuals, businesses and our communities where we operate as we begin to rebuild and heal as a country.
Speaking on the 9 months 2020 numbers, Chief Financial Officer, Joe Mbulu said:
“Union Bank’s nine-month results reflect the strength and resilience of the business. Our Profit Before Tax (PBT) grew by 2% to N15.9 billion, from N15.5 billion in the previous period.
Our operating expenses were relatively flat year-on-year at ₦53.4 billion, compared to ₦53.2 billion in 9M 2019 despite inflationary pressures on cost and higher regulatory costs. This reflects continuing focus on cost management.
Our asset quality continues to improve with Non-Performing Loans (NPLs) down to 3.6% from 5.8% as at December 2019, supported by ongoing efforts to diversify our loan book to include viable businesses and households. Our Capital Adequacy Ratio remains robust at 19.5%, well above the regulatory threshold.
With the $40 million (USD) financing secured from the International Finance Corporation for on-lending to trade finance customers, we are continuing to expand our funding engagements with DFIs to support our strategic business initiatives.
For the rest of the year, we remain focused on our business priorities in the face of the Covid-19 challenge and will continue to leverage increasing customer loyalty, stronger digital platforms and channels as well as solid risk management structure to deliver on our objectives.”
Established in 1917 and listed on the Nigerian Stock Exchange in 1971, Union Bank is a household name and one of Nigeria’s long-standing and most respected financial institutions. The Bank has a network of over 240 Sales and Service Centers across Nigeria.
Following recapitalisation in 2012 from new investors and a new Executive Management team, Union Bank has undergone an award-winning transformation programme to re-establish the bank as a leading provider of financial services in Nigeria.
Union Bank is focused on Retail, Commercial and Corporate Banking businesses. In addition to standard current and savings product portfolio, Union Bank has launched pioneering products into the Nigerian retail market including UnionKorrect, UnionGoal and UnionBetta.