Economy
Union Bank Grows PAT by 17% to N5.3b in Q1 2018
By Dipo Olowookere
One of the old generation financial institutions in the country, Union Bank of Nigeria Plc, has recorded a 17 percent growth in its profit after tax in the first quarter of 2018.
In its audited financial statements for the quarter ended March 31, 2018 announced on Thursday, the lender said its PAT appreciated to N5.3 billion from N4.5 billion in the corresponding period of last year, just as the profit before tax closed at N5.4 billion as at March 31, 2018 in contrast to N4.7 billion in Q1 2017.
Also, the gross earnings went up by 15 percent to N39.5 billion from N34.3 billion in Q1 2017, driven by improvement in net interest margins from 7.1 percent to 8.7 percent and 18 percent increase in non-interest income due to enhanced trading income and increased volumes on alternate banking channels.
Furthermore, interest income increased by 14 percent to N31.7 billion from N27.7 billion in Q1 2017 buoyed by improved yields on loans and government securities.
In addition, the firm’s net interest income before impairment rose by 22 percent to N17.8 billion from N14.6 billion in Q1 2017, driven by 14 percent increase in interest income and a lower 6 percent increase in interest expense.
It was also revealed in the statements that the non-interest income went up by 18 percent to N7.8 billion from N6.6 billion in Q1 2017, driven by a combination of trading income and alternate channel revenues, while the net operating income increased by 11 percent to N23.3 billion from N20.9 billion in Q1 2017.
Furthermore, the operating expenses jumped by 10 percent to N17.9 billion from N16.3 billion in Q1 2017, largely due to regulatory levies from the NDIC and AMCON.
However, the gross loans went down by 12 percent to N495.5 billion from N560.7 billion as at December 2017 as a result of collection efforts and the write-off of some non-performing loans.
During the period under review, the customer deposits of Union Bank went down by 5 percent to N759.1 billion from N802.4 billion in December 2017 as the lender optimised the deposit book towards lower-cost deposits.
It was observed that there was a 68 percent increase in new-to-bank accounts when compared with Q1 2017, highlighting customer acceptance of new products and increasing brand penetration.
There was also a 90 percent increase in volume of funds transfer transactions on Union Bank’s alternate channels, highlighting efficiencies gained from technology investments, which are driving increased customer adoption.
Commenting on the results, the chief executive of Union Bank, Mr Emeka Emuwa, stated that, “In 2018, we renewed our focus on driving efficiency and productivity across the entire organization.
“The objective is to ensure we fully leverage our resources including human, technology and new capital in order to maximize our bottom line.
“While we are just in the early stages of this drive, we are already starting to see positive results. In the first quarter, our Profit Before Tax grew by 16 percent compared to the same quarter in 2017. Gross earnings, bolstered by improved asset yields, strong treasury trading and revenue from our alternate channels, which is steadily seeing increasing customer adoption, are also up by 15 percent to N39.5 billion against N34.3 billion Q1 2017.
“Our Group Non-Performing Loan Ratio is down to 14.9 percent from 19.8 percent at the end of 2017.
“We continue to maintain aggressive focus on our impaired loans and we expect to resolve some large exposures in the course of the year, which will further drive down the ratio. We are pushing strongly on debt recovery efforts across board including initiating or continuing legal action where necessary.
“For the first half of the year, we will continue to hone initiatives around our productivity drive, focusing our people on targeted opportunities across regions and optimising our technology and digital platforms to deliver operational efficiency and improved customer service.
Also speaking on the Q1 2018 numbers, Chief Financial Officer of the bank, Oyinkan Adewale said, “The first quarter numbers reflect the adoption of International Financial Reporting Standards (IFRS) 9, which came into effect at the start of 2018. We are pleased that the Bank’s regulatory risk reserve was adequate to absorb the impact of the new accounting rules.
“Our Capital Adequacy Ratio (CAR) remains robust at 17.9 percent in spite of the impact of IFRS 9 on impairments. Liquidity ratio is at 39.4 percent, well above the minimum requirement, while Net Interest Margin improved to 8.73 percent from 7.14 percent in Q1 2017.
“Profit After Tax (PAT) rose 17 percent to N5.3 billion compared to N4.5 billion recorded in Q1 2017. Notwithstanding a 19 percent and 27 percent increase in our AMCON levy and NDIC premium respectively, our operating expenses increased by only 10 percent given the continued focus on optimising operating costs.
“We continue to proactively in managing the risks in our business as we pursue targeted opportunities identified for growth.”
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange recorded a 3.8 per cent week-on-week decline in the 14th trading week of 2026, which had only four trading sessions.
This happened because of the public holiday observed on Friday for Easter celebrations in Nigeria and across the globe.
Last week, the market capitalisation of the bourse went down by N95.36 billion to N2.417 trillion from N2.512 trillion in Week 13, while the NASD Unlisted Securities Index (NSI) shrank by 159.39 points to 4,040.30 points from 4,199.69 points in the previous week.
In the week, there were five price losers and eight price losers led by 11 Plc, which crumbled by N94.57 to N256.60 per unit from N351.17 per unit.
MRS Oil Plc lost N39.00 to close at N171.00 per share from N210.00 per share, FrieslandCampina Wamco Nigeria Plc depreciated by N17 to N93.00 per unit from N110.00 per unit, and Central Securities Clearing System (CSCS) Plc shed N2.10 to close at N78.00 per share versus N80.10 per share.
Further, NASD Plc dropped N4.14 to end at N37.36 per unit versus N41.50 per unit, UBN Property Plc crashed by 22 Kobo to N1.98 per share from N2.20 per share, Food Concepts Plc slid by 13 Kobo to N2.87 per unit from N3.00 per unit, and Capital Bancorp Plc contracted by 10 Kobo to N1.90 per share from N2.00 per share.
On the flip side, IPWA Plc gained 55 Kobo to sell at N6.06 per unit versus N5.51 per unit, Geo-Fluids Plc appreciated by 7 Kobo to N3.25 per share from N3.18 per share, Industrial and General Insurance (IGI) Plc improved by 5 Kobo to 57 Kobo per unit from 52 Kobo per unit, Great Nigeria Insurance (GNI) Plc grew by 2 Kobo to 52 Kobo per share from 50 Kobo per share, and Acorn Petroleum Plc moved up by 1 Kobo to N1.34 per unit from N1.33 per unit.
The volume of transactions witnessed a 5,490.9 per cent surge last week to 3.5 billion units from 62.7 million units, and the value of transactions soared by 437.7 per cent to N9.7 billion from N1.7 billion. These trades were completed in 163 deals and involved 20 stocks.
The most traded stock by value was GNI Plc with N8.4 billion, followed by Okitipupa Plc with N630.5 million, Geo-Fluids Plc with N162.7 million, CSCS Plc with N57.5 million, and Friesland Campina Wamco Nigeria Plc with N37.1 million.
The most trased stock by volume was also GNI Plc with 3.4 billion units, Geo-Fluids Plc traded 50.1 million units, Okitipupa Plc transacted 21.0 million units, UBN Property Plc quoted 2.5 million units, and CSCS Plc sold 0.73 million units.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange extended its stay in the south territory with a decline of 0.56 per cent on Wednesday, April 2.
This brought down the market capitalisation by N13 billion to N2.417 trillion from N2.430 trillion, and downed the NASD Unlisted Security Index (NSI) by 22.57 points to 4,062.87 points from the previous session’s 4,062.87 points.
It was observed that the NASD exchange ended with three price gainers and three price losers during the trading day.
MRS Oil Plc depreciated by N19.00 to close at N171.00 per unit compared with the previous price of N190.00 per unit, NASD Plc lost N4.14 to trade at N37.36 per share compared with Wednesday’s N41.50 per share, and Central Securities Clearing System (CSCS) Plc gave up N2.00 to sell at N78.00 per unit versus N80.00 per unit.
On the flip side, FrieslandCampina Wamco Nigeria Plc appreciated by 19 Kobo to N93.00 per share from N92.81 per share, Food Concepts Plc expanded by 15 Kobo to N2.87 per unit from N2.72 per unit, and Great Nigeria Insurance (GNI) Plc improved by 2 Kobo to 52 Kobo per share from 50 Kobo per share.
Yesterday, the volume of securities dipped by 91.8 per cent to 260.2 million units from 3.2 billion units, the value of securities went down by 98.1 per cent to N154.2 million from N8.3 billion, while the number of deals soared by 53.3 per cent to 46 deals from 30 deals.
GNI Plc was the most active stock by value on a year-to-date basis with 3.4 billion units worth N8.4 billion, followed by CSCS Plc with 56.9 million units valued at N3.9 billion, and Okitipupa Plc with 27.5 million units traded for N1.8 billion.
The most traded stock by volume on a year-to-date basis was also GNI Plc with 3.4 billion units sold for N8.2 billion, trailed by Resourcery Plc with 1.1 billion units exchanged for N415.7 million, and Infrastructure Guarantee Credit Plc with 400 million units transacted for N1.2 billion.
By Adedapo Adesanya
The Naira dropped N2.09 or 0.15 per cent against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Thursday, April 2, to trade at N1,380.79/$1 compared with Wednesday’s rate of N1,378.70/$1.
However, it appreciated against the Pound Sterling in the official market by N2.77 to quote at N1,824.86/£1 versus the N1,836.57/£1 it was traded at midweek, and improved its value against the Euro by N10.54 to N1,591.92/€1 from N1,602.46/€1.
Yesterday was the last trading session of the week for the local currency in the spot market, as the market will be closed on Friday and Monday for the Easter Holiday.
At the black market, the Nigerian Naira maintained stability against the greenback yesterday at N1,405/$1, but gained N8 at the GTBank FX counter to settle at N1,388/$1, in contrast to the previous session’s N1,396/$1.
Pressure eased on the domestic currency as strong policy indicators have helped calm the majority of worries within the financial systems. Particularly in the remittance segment, the apex bank has directed all International Money Transfer Operators (IMTOs) to route remittance transactions through designated Naira settlement accounts in banks, a move aimed at boosting transparency and channelling more foreign exchange into the formal market.
This helps take off pressure from the foreign reserves, which have fallen below the $50 billion mark as they are gradually decreasing rather than falling sharply.
Meanwhile, the cryptocurrency market was bullish on Thursday, as macro sentiment shifted against recent optimism after reports that Iran is drafting a protocol with Oman to manage traffic through the Strait of Hormuz, easing concerns about disruptions to a key global oil route.
The remarks came after U.S. President Trump on Wednesday night vowed to hit Iran “extremely hard” in the coming weeks and that the Strait of Hormuz would “open naturally” once the war ends.
Cardano (ADA) chalked up 1.9 per cent to trade at $0.2435, Dogecoin (DOGE) grew by 1.2 per cent to $0.0912, Ethereum (ETH) appreciated by 0.8 per cent to $2,066.37, Bitcoin (BTC) added 0.5 per cent to sell at $67,080.53, Solana (SOL) increased by 0.5 per cent to $79.91, and Ripple (XRP) jumped 0.2 per cent to $1.31.
Conversely, Binance Coin (BNB) dipped 0.7 per cent to $586.90, and TRON (TRX) depreciated by 0.3 per cent to $0.3147, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) closed flat at $1.00 each.
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