Dipo Olowookere
By Dipo Olowookere
Union Bank of Nigeria Plc on Tuesday announced its financial results for the first six months of 2019 and an analysis by Business Post indicated a mixed performance.
For instance, while the gross earnings went down to N76.0 billion in H1 2019 from N83.3 billion in H1 2018, the net interest income after impairment went up by 3 percent to N30.5 billion from N29.7 billion in in H1 2018, supported by an aggressive drive in collections.
The lender attributed the 9 percent decline in the gross earnings to a decrease in average earning assets.
A further analysis of the financial statements showed that the interest income depreciated by 8 percent to N57.3 billion from N62.2 billion, with the net interest income going down to N18.7 billion from 21.1 billion.
According to Union Bank, this was due to muted volatility, which negatively impacted on trading income despite a 27 percent growth in credit-related fees and 169 percent growth in cash recoveries at N5.3 billion against N1.9 billion in H1 2018.
In the results, the lender said its net operating income slightly went down by 4 percent to N37.5 billion from N50.9 billion, while the gross loans increased to N563.0 billion from N519.7 billion as at the end of 2018 fiscal year, driven by increased risk asset creation across priority economic sectors.
It was further stated that customer deposits improved in the period under review by 4 percent to N889.5 billion from N857.6 billion in 2018 FY, in demonstration of the success recorded by the company’s ongoing acquisition of low-cost deposits buoyed by strengthened brand affinity.
For the profit before, this moved up to N12.1 billion from N11.7 billion, while the profit after tax increased to N11.9 billion from N11.5 billion, with the earnings per share marginally growing to 40 kobo in H1 2019 from 38 kobo in H1 2018.
A look at the balance sheet showed that the total assets grew to N1.7 trillion in H1 2019 from N1.5 trillion in FY 2018, while the shareholders’ fund jumped to N239.0 billion from N225.6 billion.
According to Union Bank, its loan to deposit ratio as at June 30, 2019 stood at 63.3 percent against 60.6 percent in FY 2018, while the non-performing loan ratio closed at 7.1 percent in H1 2019 against 8.7 percent as at the end of the 2018 financial year.
