Union Bank Records profit before tax of N15.7 billion for 2016

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LAGOS, APRIL 3, 2017 – Nigeria’s first generation bank, Union bank of Nigeria (UBN) has recorded a profit before tax of N15.7 billion for 2016 despite the current economic challenges in the country since 2016.

ThisDay reports that Union Bank of Nigeria (UBN) Plc last Friday reported a profit before tax of N15.7 billion for the year ended December 31, 2016, showing a marginal growth of seven per cent compared with N14.9 billion posted in 2015. The profit was made from gross earnings of N126.6 billion in 2016, which is eight per cent above the N117.2 billion in 2015.

UBN posted net interest income of N65 billion, up from N55.7 billion, while credit impairment charges jumped 67 per cent from N9.9 billion to N16.6 billion. Operating expenses rose by seven per cent to N62 billion, as against N57.9 billion the previous year.

PBT stood at N15.7 billion, compared with N14.9 billion, just as profit after tax (PAT) grew by eight per cent from N14.3 billion to N15.4 billion in 2016.

A further breakdown of the performance indicators gross loans rode on the back of the impact of devaluation on foreign currency loans to hit N535.8 billion, up by 38 per cent from N388.8 billion in 2015.

Customers’ deposits grew by 11 per cent from N569.1 billion to N633.8 billion, while shareholders’ funds appreciated by eight per cent to settle at N251.3 billion, from N233.5 billion in 2015. UBN ended the year with total assets of 1.124 trillion, showing an increase of 12 per cent, compared with N1.001 trillion in 2015.

Speaking on the results, Managing Director of UBN, Mr. Emeka Emuwa said:

“In 2016, we focused on executing our priorities across the different business segments, especially in the retail space, with an aggressive strategy to increase adoption of our alternate channels. Our success in this area, along with improved core interest earnings, contributed to pre-tax profit growth of six per cent, compared to 2015.”

According to him, their research led to product development strategy, coupled with an upskilled sales force and targeted marketing campaigns, propelled their customer deposit base by 15 per cent, compared to 2015, and a 73 per cent increase in new-to-bank customers.

Similarly, commenting on the results, Chief Financial Officer, Oyinkan Adewale, said: “On the back of strong customer deposits, the bank reduced average interbank local currency borrowing by 75 per cent, leading to 1.41 per cent reduction in primary cost of funds and 17 per cent increase in net interest income.”

According to her, the bank continued to drive cost optimisation, with cost-income-ratio declining to 66.2 per cent from 70.7 per cent in 2015, notwithstanding a high inflation environment.

The results declared by Union bank is consistent with the ones reported by Access Bank, Zenith bank, United bank for Africa (UBA) which suggests that perharps banks are the biggest winners in the recession period but ironically the dawn of economic recession saw massive retrenchment of workers in the banking industry.

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