Union Bank,has announced its unaudited results for the nine months ended 30th September 2016.
The report showed that banks
Profit before tax climbed to ₦13.2bn (₦13.2bn in 9M 2015); excluding gain on sale of subsidiaries which increased by 27% to ₦12.4bn (₦9.8bn in 9M 2015).
Gross earnings went up by 7 percent to ₦91.4bn (₦85.4bn in 9M 2015); excluding gain on sale of subsidiaries which increased by 11 percent to ₦90.6bn (₦82.0bn in 9M 2015).
Also, Interest income went up by 6 percent to ₦69.2bn (₦65.3bn in 9M 2015) driven by improved asset yields from 14.2 percent in 9M 2015 to 16.1 percent in 9M 2016.
Interest expense went down 14 percent to ₦22.8bn (₦26.5bn in 9M 2015) driven by lower funding costs. Primary cost of funds declined to 5.27 percent in 9M 2016 from 6.58% in 9M 2015.
Also Net revenue before impairment was up 20 percent to ₦46.4bn (₦38.8bn in 9M 2015) as a result of 6 percent interest income growth and 14 percent interest expense growth while Net interest margin grew from 8.76 percent to 9.97 percent.
Commenting on the Bank’s results for the nine month period, Emeka Emuwa, Chief
Executive Officer said: “Our core pre-tax profits are up 27% to ₦12.4bn from N9.8bn during the same period in 2015, fuelled largely by interest income and our thriving retail business. We are encouraged by this performance which comes in the face of a recessionary environment, increased impairments and headwinds in our trade business due to scarcity of foreign exchange.
Our steady effort to build a low cost, customer centric retail business over the past 18 months is demonstrating results and continues to win us a new, growing retail customer base, as well as industry recognition with our recent Business Day Award for the Most Improved Retail Bank in Nigeria.
While the operating environment remains a challenge, we will continue to focus on executing our strategy, defending our loan book and adhering to prudent risk management principles.’
Speaking further on the Bank’s numbers, Chief Financial Officer, Oyinkan Adewale said: “Our revenues are up across board and the Bank’s asset yields improved from 14.2% to 16.1% when compared to same period in 2015.
Our non-interest revenue is up
27%, excluding one-time gains, on the back of treasury and channel banking revenues in the retail business.
We continue to manage our cost of funds, resulting in 14% reduction in interest expenses year-on-year, notwithstanding a 9% growth in customer deposits and 25% increase in medium term borrowings.
Our cost optimisation initiatives continue to yield good results; cost-to-income ratio has improved to 62% from 70% in the previous year. Cost-to-income is buoyed by income and operating expenses in line with expectations in spite of inflationary and devaluation pressures. We will continue to implement our cost discipline initiatives across the Bank to stay within our cost targets.”