Union Bank of Nigeria Plc recovered roughly N7 billion in problem loans in the second quarter, which enabled its management to maintain stability in earnings performance at the end of half-year operations in June 2021.
This is more than three times the corresponding recovery of N2.1 billion in the second quarter of last year.
The loan recovery is the biggest non-interest revenue line so far this year and the main growth driver for non-interest income in the second quarter. It is a major factor in a major acceleration of non-interest income over the period.
The bank achieved a big leap of 83 per cent in non-interest earnings quarter-on-quarter to almost N18 billion at the end of June. The figure represents more than 62 per cent of the closing non-interest revenue of less than N28 billion for the half-year operations.
Other major revenue improvements were recorded in the second quarter, which includes net fee and commission income that grew by 137 per cent quarter-on-quarter, net income from other financial instruments, which multiplied five times and other operating income, which rose by 35 per cent quarter-on-quarter.
The robust growth in non-interest earnings was supported by a turnaround in interest income from a drop of 25 per cent in the first quarter. The bank recorded an improvement of over 21 per cent in interest income quarter-on-quarter in the second quarter to N33.5 billion. This accounts for 70 per cent of the bank’s interest income of N47.8 billion for the half-year operations.
A strong gain in revenue performance is the centre of Union Bank’s earnings story in the second quarter. It changed the bank’s position from a drop in gross earnings in the first quarter to a leap of 37 per cent quarter-on-quarter in the second quarter.