Union Bank of Nigeria Plc, one of Nigeria’s long-standing financial institutions, has shown 85 percent increase in profit before tax of ₦4.7bn as against ₦2.5bn in Q1 2015. This was made known from the bank’s first quarter results, released to the Nigerian Stock Exchange (NSE) during the ‘Union Bank: Facts Behind The Figures’ session on Thursday.
According to the bank’s MD / CEO, Emeka Emuwa, “Our first quarter results reflect steady progress on the execution of our strategic priorities. The Bank’s core PBT in Q1 2016 is up significantly by 85 percent to ₦4.7bn compared to ₦2.5bn in the same quarter last year”.
“With the sale of non-banking subsidiaries near completion, the Bank is now focused on growing and delivering results through its core banking business”, he said.
The bank’s service channels, new product offerings and re-energized brand identity have contributed to a nine-percent spike in customers’ deposits since the beginning of the year, compared to 2015.
“Our priorities to sustain growth in 2016 remain focused on growing our deposit base and new customer acquisitions, as well as driving gains in transactional income. We will continue leveraging the technology and operational platform we have invested in whilst proactively managing our risks and operational costs,” Emeruwa explained.
Relying more on low cost deposits to fund the bank, the bank’s Chief Financial Officer, Oyinkansola Adewale revealed that focus on customer deposit growth had led the bank to a 16 percent interest expense reduction. “The Bank delivered strong results this first quarter. This trend is expected to continue and should moderate funding costs and improve net interest margins for 2016.
“Non-interest revenue continues to grow, driven by securities trading, e-business and other transactional fees. Excluding 2015 one-off gains, we were able to grow core revenues by nine percent. Given our continuing investment in technology and network infrastructure, we have seen a slight increase of three percent in operating expenses this quarter compared to Q1 2015. This short term increase is expected to normalise over the course of the year,” Adewale said.
She also explained that the bank can not pay dividend to sharebolders until their accounts returns to profitability because the law does not permit them to do so.
The bank MD / CEO added that Union Bank plans to continue leveraging on the technology and operational platform they have invested in whilst proactively managing their risks and operational costs.