Union Bank Impresses With Strong Revenue Growth in FY 2022

By Aduragbemi Omiyale

The financial statements of Union Bank of Nigeria Plc for the year ended December 31, 2022, have been filed to the Nigerian Exchange (NGX) Limited.

In the period under review, the bank impressed investors with strong revenue growth driven by core business deepening amid a tough operating environment.

The results showed that Union Bank maintained consistent success due to the disciplined execution of its go-to-market strategy focused on deepening its core business while exploring new areas of opportunity to acquire, engage, and retain customers.

Last year, the lender grew its gross earnings by 19 per cent to N208.2 billion from N175.0 billion in 2021 due to strong growth in net interest income, which rose by 33 per cent to N59.1 billion from the N44.3 billion achieved a year earlier as earning assets went up.

In the year, Union Bank invested in strengthening its technology architecture to drive key processes and serve more customers through digital and agent channels.

Consequently, active users on UnionMobile increased by 15.7 per cent to 3.8 million users, and active UnionDirect Agents grew by 62.7 per cent to 51,737, leading to an increase in transaction value and volume on UnionMobile by 121 per cent and 20.4 per cent, respectively.

These supported the 9 per cent growth customer deposits in 2022 to N1.48 trillion from N1.36 trillion in 2021, enabling the lender to increase its gross loans by 11 per cent to N1.0 trillion from N899.1 billion to boost the nation’s economy.

Union Bank disclosed in its financial results that its profit before tax went up by 47 per cent to N30.2 billion from N20.5 billion in 2021.

“Despite the macroeconomic headwinds of 2022, we recorded strong performance across key financial and operational indicators. We were focused on our strategy of deepening our core business segments whilst enhancing our digital channels and service propositions to customers.

On the back of this, we are increasing our customer acquisition and engagement, translating into higher revenues across our regions.

“The bank’s gross earnings grew by 19 per cent to N208.1 billion from N175 billion in 2021. Whilst non-interest income declined marginally by 1.0 per cent.

“Net interest income after impairment grew 26.1 per cent to N55.8 billion from N44.2 billion in 2021 on the back of increasing responsible risk assets.

“Profit before tax closed at N30.2 billion, representing a growth of 47.1 per cent from N20.5 billion recorded in 2021,” the chief executive of Union Bank, Mr Mudassir Amray, said.

Mr Amray further said, “In 2023, we will remain focused on executing our strategic initiatives, which are centred on pursuing additional opportunities to diversify our revenue sources while strengthening our core business.

“We also look forward to completing the merger of Union Bank of Nigeria and Titan Trust Bank, which began in 2022. The transition has gone smoothly, and I am confident that the combination will make us more formidable and well-positioned to capitalise on market opportunities.

“As we progress into 2023, I have no doubts that we will scale through all the macroeconomic pressures and sustain this growth momentum with continued support from the new core investors and board and continued trust from our customers to serve them.”

On his part, the Chief Financial Officer of Union Bank, Mr Joe Mbulu, said, “Our financial performance is a testament to the disciplined execution of our plans for the year and resilience against all odds. While pursuing liability generation and responsible risk assets, we maintained operational efficiency, managing cost drivers and avoiding wastage.

“Operating expenses increased marginally by 0.43 per cent due to increased non-discretionary regulatory costs. Our cost-to-income ratio dropped to 72.5 per cent from 79.4 per cent in 2021 due to cost-control measures implemented during the year.

“The bank’s balance sheet remains strong, with total assets increasing by 8.8 per cent to N2.79 trillion due to growing loans and advances to customers.

“We expanded our net loan book by 11.5 per cent from N868.8 billion in 2021 to N968.9 billion in 2022. In addition, customer deposits increased by 8.8 per cent to N 1.48 trillion.

“While we seek to grow our risk assets, maintaining quality assets remains a key priority. As a result, our NPL ratio reduced from 4.3 per cent to 4.0 per cent, and the capital adequacy ratio remained within regulatory limits at 14.4 per cent.”