Economy
Union Bank to Boost 2021 Earnings, Cuts NPL Ratio to 4.0%
By Dipo Olowookere
Shareholders of the Union Bank of Nigeria (UBN) have been assured of more value for their investment in the financial institution.
This assurance was given by the outgoing Managing Director of Union Bank, Mr Emeka Emuwa. The banker will cease to head the lender from Thursday, April 1, 2021.
A few days ago, the bank released its audited financial statements for the year ended December 31, 2020, and in the period, it recorded sustained growth in key income lines and significantly improved fundamentals despite the constrained operating environment largely due to the impact of the COVID-19 pandemic.
Reason for good performance
Union Bank attributed this sterling performance to its investments in technology and progressive work culture over the past eight years.
The lender said these strategies enabled a swift response to the pandemic that allowed its workforce to transition to remote working while maintaining the productivity required to deliver this strong set of results in 2020.
Mr Emuwa assured that in 2021, shareholders should expect improved results as “the bank will focus on enhancing revenues and shareholder value by revving up customer acquisition, engagement and transactions through seamless customer journeys and an optimized service delivery platform.”
CEO on Union Bank 2020 Results
Commenting on the performance of the company in the previous financial year, Mr Emuwa, who has led the lender for eight years, stated that, “The bank has delivered a strong set of results notwithstanding the impact of COVID-19 on our operations and the wider economy, enabling the board of directors to continue to return value to shareholders with a proposed dividend payment for the second year in a row.
“This demonstrates the strong foundations we have built, as we continue to deliver against our target of becoming a leading financial institution in Nigeria.”
“For the full year, we grew across key income lines. Net income after impairments grew 8.3 per cent from N95.5 billion to N103.4 billion and translated into 2.8 per cent growth in profit before tax to N25.4 billion from N24.7 billion.
“The core of this performance is driven by the growth in our loan book, with a 23.8 per cent increase in gross loans to N736.7 billion from N595.3 billion in 2019.
“The pandemic accelerated trends in customer behaviour and we have seen a rapid increase in digital adoption with a 38 per cent year-on-year increase in active users on our UnionMobile channel with total active users now at 2.9 million.
“Our UnionOne and Union360 platforms for businesses grew by 11 per cent from 25,000 users to 27,700 users and 94 per cent of transactions in the bank are now done digitally, up from 89 per cent in 2019.
“We also aggressively grew UnionDirect (our agent network) by 6x from 3,100 to 18,100 in line with our focus on our retail business. With our investments yielding positive results, we are well-positioned as a strong leader in the retail and digital space.”
Concluding, he said, “As I retire, following eight years of rebuilding and repositioning this storied institution, I am convinced that with the excellent management team and a clear strategy in place, Union Bank is well-positioned to continue to compete and deliver value to its shareholders.”
Dividend recommended
In the period under consideration, Union Bank recommended the payment of 25 kobo as a dividend and this has spurred interest in the company’s equities at the stock market.
CFO speaks
In his reaction to the results, the Chief Financial Officer of Union Bank, Mr Joe Mbulu, expressed satisfaction with the “top and bottom-line performance in 2020, in light of the impact of the pandemic and economic challenges.”
According to him, “Significant inflationary pressures and the translation of currency depreciation drove growth in our cost base.
“However, we maintained strong control, limiting operating expense increase to 10 per cent (N77.9 billion from N70.8 billion), well below the rate of inflation. Consequently, we saw a marginal increase in our cost to income ratio to 75.4 per cent from 74.1 per cent.
“Our customer deposits hit a milestone during the year, crossing the N1 trillion mark to N1.131 trillion from N886.3 billion in FY 2019, an increase of 27.1 per cent.
“Low-cost deposits were up by 17 per cent, constituting 68 per cent of total deposits helping to push the cost of funds down by 1.4 per cent.
“We continued to proactively manage our growing risk asset portfolio and recorded better asset quality, with our NPL ratio improving from 5.8 per cent to 4.0 per cent. This achievement, combined with solid capital adequacy at 17.5 per cent and continued top-line growth, provides the platform for strong growth going forward.
“We will continue to grow our loan portfolio in 2021, which we expect to be a significant driver of growth, combined with our value chain synergies across our business which will drive customer and transaction growth during the year and beyond.
“Our UBUK subsidiary remains classified as Available for Sale as the sale process continues albeit delayed due to the pandemic-induced lockdowns.”
By Dipo Olowookere
The Nigerian Exchange (NGX) Limited rallied by 0.28 per cent on Wednesday despite weak investor sentiment, as the bourse ended with 18 price gainers and 38 price losers, implying a negative market breadth index.
The growth recorded yesterday by Customs Street was influenced by the 2.11 per cent rise posted by the energy index, and the 1.79 per cent jump achieved by the banking sector.
The other sectors experienced profit-taking, with the consumer goods losing 1.07 per cent, the insurance counter down by 0.36 per cent, and the industrial goods space down by 0.19 per cent.
Universal Insurance chalked up 10.00 per cent to sell for N1.21, Omatek improved by 9.78 per cent to N2.47, VFD Group expanded by 9.71 per cent to N11.30, CWG appreciated by 9.64 per cent to N21.05, and Livestock Feeds gained 9.56 per cent to close at N7.45.
On the flip side, UPDC REIT lost 10.00 per cent to settle at N6.75, Fortis Global Insurance shed 9.92 per cent to quote at N1.18, Deap Capital depreciated by 9.85 per cent to N5.40, Chams went down by 9.47 per cent to N3.06, and Japaul declined by 8.82 per cent to N3.10.
Yesterday, the All-Share Index (ASI) went up by 562.43 points to 202,585.53 points from 202,023.10 points, and the market capitalisation advanced by N389 billion to N130.404 trillion from N130.015 trillion.
During the session, 1.0 billion stocks worth N40.6 billion exchanged hands in 52,723 deals compared with the 1.1 billion stocks valued at N40.3 billion executed in 78,006 deals a day earlier, indicating an uptick in the trading value by 0.74 per cent, and a shortfall in the trading volume and number of deals by 9.09 per cent and 32.41 per cent apiece.
The activity chart was led by Access Holdings, which sold 233.0 million units valued at N6.1 billion, Fidelity Bank exchanged 113.1 million units worth N2.2 billion, Wema Bank recorded a turnover of 103.3 million units valued at N2.7 billion, Zenith Bank transacted 60.6 million units for N6.5 billion, and Chams traded 47.5 million units worth N154.6 million.
By Adedapo Adesanya
Crude oil plummeted on Wednesday on hopes of the reopening of the Strait of Hormuz after US President Donald Trump agreed to a two-week ceasefire with Iran.
Brent crude futures moderated to $94.75 a barrel, while the US West Texas Intermediate (WTI) crude eased to $94.41 a barrel.
President Trump said on Wednesday that the US will work closely with Iran and will be talking about tariff and sanctions relief with Iran.
However, analysts cautioned that the ceasefire is a temporary two-week reprieve rather than a permanent resolution, and the global energy system remains fragile due to structural damage to regional infrastructure.
Reuters reported that Iran could open the strait in a limited and controlled way on Thursday or Friday ahead of a meeting between U.S. and Iranian officials in Pakistan.
Agence France-Presse (AFP) reported that two ships appeared to have transited the Strait of Hormuz since the US-Iran ceasefire deal. A Greek-owned bulk carrier and a Liberia-flagged vessel both transited the waterway early on Wednesday.
Meanwhile, Israel carried out its heaviest strikes on Lebanon since the conflict with Hezbollah broke out last month, even as the Iran-aligned group paused attacks on northern Israel and Israeli troops in Lebanon under the ceasefire.
Also, Saudi Arabia’s East-West Pipeline, a critical artery bypassing the Strait of Hormuz, was reportedly hit in an Iranian drone attack. Prior to the attack, the pipeline was pumping at its emergency capacity of 7 million barrels per day to bypass the shuttered strait.
The strikes occurred just hours after a US-Iran ceasefire announcement, which has so far failed to halt regional hostilities. Other facilities in the kingdom were also targeted in the wave of strikes, which the Islamic Revolutionary Guard Corps (IRGC) claimed included oil facilities owned by American companies in Yanbu.
US crude stocks rose by 3.1 million barrels to 464.7 million barrels during the week ended April 3, the Energy Information Administration (EIA) said.
By Adedapo Adesanya
The National Insurance Commission has issued new guidelines for the collection, management, and administration of the Insurance Policyholders’ Protection Fund.
In a circular issued to all insurance institutions on Tuesday, the regulator also set May 31, 2026, as the deadline for insurers to submit their assessment returns for the 2025 financial year.
Recall that on August 5, 2025, President Bola Tinubu signed into law the Nigerian Insurance Industry Reform Act ( NIIRA 2025).
This landmark legislation repeals the Insurance Act 2003, and consolidates related provisions, ushering in a modern regulatory framework. It lays a strong foundation for sustainable growth and increased investment in the country’s insurance sector.
The commission said the guidelines were issued in exercise of its powers under the 2025 Act and other existing insurance laws and regulations to provide regulatory clarity, improve guidance, and ensure ease of compliance across the industry.
According to NAICOM, the guidelines establish a comprehensive structure for the operation of the IPPF, which serves as a statutory safety net to protect insurance policyholders in the event of distress or insolvency of a licensed insurer or reinsurer. The framework also provides direction on the reimbursement of loans by insurers and reinsurers.
NAICOM stated, “The guidelines ensure regulatory clarity, guidance and ease of compliance, as it provides a comprehensive regulatory framework for the collection, management, and administration of the Fund, which serves as a statutory safety net designed to protect insurance policyholders against distress and insolvency of a licensed insurer or reinsurer, including guidance for the reimbursement of loans by an insurer or reinsurer.
“Please be informed that the IPPF Assessment Returns in respect of the year 2025 shall be submitted to the Commission not later than 31st May 2026, while subsequent submissions shall be in line with Section 4.3 of the Guideline on Insurance Policyholders Protection Fund.”
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