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Union Bank Delivers Double-Digit Q1’20 Earnings, Profitability Growth

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By Dipo Olowookere

In the first quarter of 2020, Union Bank of Nigeria Plc posted double digits growth in both its top line and bottom line.

On Wednesday, the lender released its financial statements for the period ended March 31, 2020 and the numbers were impressive when analysed by Business Post.

The gross earnings for the period increased by 16 percent to N43.9 billion from N37.7 billion, while the net interest income rising 38 percent to N15.0 billion from N10.9 billion in the corresponding period of 2019, with the non-interest income growing 23 percent to N13.0 billion from N10.6 billion.

In the results, the operating expenses of Union Bank increased N18.0 billion from N17.6 billion.

The profit before tax grew by 26 percent to N6.3 billion from N5.0 billion, while the profit after tax improved by 25 percent to N6.1 billion from N4.9 billion, with the earnings per share (EPS) at 21 kobo in Q1 2020 compared with 17 kobo in Q1 2019.

On its balance sheet, the lender grew its total assets by 7 percent year-to-date to N2.0 trillion from N1.9 trillion, with gross loans and advances rising to N611.1 billion from N595.3 billion, with customer depositis growing to N897.4 billion from N886.3 billion and the shareholders’ funds improving to N254.4 billion from N252.3 billion.

Union Bank stated its non-performing loan ratio increased year-to-date to 5.9 percent from 5.8 percent, while the loan to deposit ratio, which the Central Bank of Nigeria (CBN) said should be at least at 65 percent, stood at 68.1 percent over 67.2 percent as at December 31, 2019.

While commenting on the numbers, the Chief Financial Officer of Union Bank, Mr Joe Mbulu, stated that, “Headline numbers delivered 19 percent growth in Profit Before Tax to N6.2 billion compared to N5.2 billion in Q1 2019.

“The 18 percent YoY growth in Non-Interest Income was driven by stronger trading income of N5 billion compared to N2.2 billion in Q1 2019, e-business income of N2.1 billion compared to N1.2 billion in Q1 2019 and revaluation gains of N2.7 billion compared to N0.1 billion in the same period last year.”

CEO of Union Bank, Mr Emeka Emuwa, stated that, “Coming off a strong 2019, we maintained focus on executing our strategic priorities in Q1 2020, delivering double-digit growth across all our major income lines.”

“The current COVID-19 pandemic presents daunting challenges for the global economy and consequently Nigeria and our business.

“Our focus in the short term is on ensuring business continuity through our strong operational risk framework; ensuring the health and well-being of our employees by adopting stringent health and safety protocols at our operating branches and offices; and supporting our customers through the crisis.

“We have reinforced our digital platforms to continue delivering value and convenience to our customers while aligning our focus areas to where opportunities emerge during and post COVID-19.

“We will continue to support the government, private entities and our communities in the fight against COVID-19.”

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan. Mr Olowookere can be reached via dipo.olowookere@businesspost.ng

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Banking

Keystone Bank Boosts Lagos Environmental Sanitation

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By Modupe Gbadeyanka

The Lagos State government’s environmental sanitation efforts recently received a huge boost when the new intakes of Keystone Bank Limited donated some kits to the Lagos State Waste Management Authority (LAWMA).

The new employees, who recently graduated from the bank’s training school, The Keystone Bank Learning Academy Lagos, gave the agency 60 units of street sweepers’ uniforms.

This is aimed to boost the morale of the personnel, who work hard to keep the city very clean and it was part of the bank’s Corporate Social Responsibility (CSR) drive.

“Keystone Bank is committed to sustainability and therefore has made it a point of duty for our trainees (newly hired fresh graduates) to buy into this concept from the elementary stage of their banking career.

“Each set of banking school trainees are made to carry out a specific CSR project, which they must fund to enable them to learn the act of giving back to the society,” the Head of Learning Academy at Keystone Bank, Mr Bimbo Alabi, was quoted as saying in a statement issued by the financial institution.

He added that Keystone Bank was keenly aware that the burden of keeping the environment clean cannot be left to the state government alone, hence the intervention by the bank.

“At Keystone Bank, we are always willing to partner with organisations that are committed to keeping the environment clean, especially in the communities where we operate.

“We cannot live a healthy life, conduct business, and create wealth amidst a sick environment,” Mr Alabi noted.

While receiving the uniforms from the Keystone Bank trainees, the Managing Director of LAWMA, Mr Ibrahim Odumboni, commended the lender for being alive to its CSR in partnering with the state government to keep the environment clean.

Mr Odumboni further called on other corporate bodies to emulate the gesture of Keystone Bank for the benefit of the larger society.

The Keystone Bank Learning Academy is a full-fledged certified and accredited learning and development centre, responsible for the continuous building of skills and the expansion of the knowledge base of new and existing workers of the bank.

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SEC DG Pushes for Sustainability, Safety, Soundness of Banking Sector

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By Modupe Gbadeyanka

The need to ensure the sustainability, safety and soundness of the banking and finance industry has been emphasised by the Director-General of the Securities and Exchange Commission (SEC), Mr Lamido Yuguda.

To achieve this, the capital market expert has advised senior bankers in the nation’s banking sector to mentor the younger generation.

According to him, their commitment to mentoring the younger generation would go a long way in actualising the objectives of the Chartered Institute of Bankers of Nigeria (CIBN)’s mentoring scheme.

Mr Yuguda, who was a guest at the CIBN mentoring scheme tagged Mentoring: Unlocking Career Potentials and Possibilities in Lagos over the weekend, noted that, “Let me use this opportunity to encourage senior bankers to collaborate with CIBN in actualising the objectives of the mentoring scheme. Your commitment to mentoring the younger generation will go a long way in ensuring the sustainability safety and soundness of the banking industry.

“To the young bankers, I enjoin you to make the best use of this rare opportunity! I am confident that with the cooperation of all stakeholders, the CIBN mentoring scheme will be a point of reference for others,” he further said.

The SEC boss stated that to be a successful professional, one must be ambitious, willing to go the extra mile, try to be a value enhancer and must be outstanding.

He said that such a person must be teachable and willing to learn from other persons who are deemed successful in the same career path.

According to him, it is critical for young bankers to be mentored by seasoned senior colleagues as they progress in their careers because the banking profession is predicated on trust and professionalism.

Mr Yuguda said these values could be taught but are actually reinforced when demonstrated by senior bankers and emulated by their younger colleagues.

“Due to the peculiarities of the banking industry, it is easy for young bankers to get distracted with the prestige and sometimes material benefits that come with the profession.

“However, mentorship relationships help to keep such young professionals grounded and focused on building character, advancing their knowledge, growing their professional network and cultivating the right values.

“This is important because what makes success sustainable for a professional is a combination of skill, experience and the right values,” the SEC director-general said.

Earlier, the CIBN President, Mr Bayo Olugbemi, said that the institute had identified mentoring as a potent tool for bridging the gap between learning and doing.

“Esteemed audience, the changing times requires that we do things differently; the changing times require that we do things differently.

“At the CIBN, we believe so much that to maintain safety, soundness and stability of the banking industry, the human capital has a pivotal role to play in this wise.

“We have identified mentoring as a potent tool for bridging the gap between learning and doing.

“In order to uphold ethics and professionalism which is the hallmark of our banking industry and our great institute, accomplished and experienced bankers need to mentor the young and upcoming ones in order to sustain the ideals of our industry,” he said.

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Ecobank, Small World Sign Remittances Deal

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Ecobank Nigeria

By Ahmed Rahma

The desire to expand its remittances reach within Africa, Europe and other parts of the world has made a leading international money transfer provider, Small World Financial Services (Small World). to sign a deal with Ecobank Group 

Small World believes that its partnership with the leading lender in Africa will accelerate the growth of its global customer base as well as its 250,000 pick-up locations.

However, both parties will benefit from the partnership and will further boost financial inclusion in Africa.

It was gathered that Small World customers can now have access to the unparalleled Ecobank Africa-wide network in three ways which include direct transfer to bank accounts; mobile wallet; and cash pick up at any Ecobank location.

Ecobank will make available the Ecobank Xpress Account for the recipients of remittances sent by Small World.

“We are delighted to be forging a partnership with Ecobank.

“It is a leading bank in Africa with over 50,000locations in the region which means our global customers get access to even more ways to send money home to African countries.

“Importantly, Ecobank shares our commitment in delivering great customer service alongside providing fast, affordable and reliable transfers,” the founder of Small World, Nick Day, said.

Also commenting, the Ecobank Group Consumer Banking Head, Nana Araba Abban, stated that, “We’re proud to offer seamless payments across our vast borderless network in Africa.

“At Ecobank, we value partnerships, such as this, that enable Africans in the diaspora to remit money affordably and conveniently.

“This provides a win-win partnership as Ecobank can offer banking services to Africans wherever they are on the globe.

”Ecobank shares Small World’s commitment of making financial services seamless, convenient, and interoperable across Africa.”

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Banking

WorldRemit Lauds CBN’s USD Bank Account Opening Policy

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By Ahmed Rahma

A leading cross-border digital payments service, WorldRemit, has strictly adhered to the directive of the Central Bank of Nigeria (CBN) that all banks should facilitate money transfers by automatically opening US dollar accounts.

The apex bank also stated that a $2,000 withdrawal limit will apply to these accounts, explaining that it was to ensure that transactions do not fail due to a recipient not having a US dollar bank account.

According to the central bank, this development will also promote transparency by guaranteeing that all recipients receive an exchange rate that reflects the market rate.

Reacting to this policy, the Country Manager of Nigeria and Ghana at WorldRemit, Mr Gbenga Okejimi, said they were very pleased by the CBN’s decision to mandate Nigerian banks to help citizens who do not have a USD account by automatically providing this facility on their behalf.

“This development will make all the difference to those who receive support from family and friends abroad.

“For our part, we are excited by the fact that we can continue to enable the transfer of remittances to more people across Nigeria whilst also supporting the Nigerian government in its efforts to strengthen the economy,” Okejimi said.

“When our founder came up with the idea to create WorldRemit, it was with the ultimate goal of ensuring that the diaspora community could send money back home easily and through a safe platform.

“I am proud to say that we are constantly evolving, innovating and adapting to ensure that our customers’ needs are met efficiently,” he said.

WorldRemit recently announced the expansion of its US Dollar payout option with nine of its existing bank partners. This development makes it an International Money Transfer Organizations (IMTO) with one of the broadest and largest USD payout networks in Nigeria.

Customers of FCMB, First Bank, Access Bank, Fidelity Bank, GT Bank and UBA can now also access USD payout through the bank transfer and cash pickup options.

Those receiving transfers into Union Bank, Polaris Bank and Zenith Bank accounts can access USD payout only through the cash pickup option.

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Comviva’s Banking Suite Gets Omdia’s Recognition

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Comviva mobiquity Banking Suite

By Modupe Gbadeyanka

Another feather was added to the already-beautifully decorated cap of Comviva as its banking suite designed by mobiquity was given a mention in research from Omdia.

Omdia, formerly known as Ovum, is one of the world’s leading research and consultancy companies and in its report, it emphasised the role being played by Comviva’s mobiquity banking suite in the global digital banking ecosystem.

In the study titled Omdia Universe: Selecting a Digital Banking Platform, 2020–21 Comviva was ranked high on “customer experience” and its mobiquity® Banking Suite judged to be a “very innovative solution” based on recommendations from clients.

The report highlighted that Comviva has an agile platform and a team that can react quickly to industry trends and has the capability to innovate at a faster pace without being burdened with cumbersome legacy product solutions.

Comviva’s particular strength lies in supporting a variety of payment rails including digital wallets, P2P payments, QR codes, and A2A payments, and a modular architecture which has been built keeping instant payments in mind.

Speaking on the recognition, Srinivas Nidugondi, EVP and COO, Digital Financial Solutions at Comviva said, “We are thrilled to be listed by one of the world’s leading research and consultancy company Omdia in their report Omdia Universe: Selecting a Digital Banking Platform, 2020–21.

“This mention is a testimony to the fact that we are delivering world-class digital banking solution to our clients.

“We are proud that our mobiquity® Banking Suite is helping multiple banks in Asia Pacific, Middle East, Africa and Latin America to deliver digital-first banking experience to consumers creating value for them.”

The Comviva’s mobiquity® Banking Suite provides a comprehensive solution to banks and financial institutions to build, manage, optimize and deliver the multi-channel banking experience, as well as continuously iterate and engage the consumers, through instant configuration capability, personalization and experimentation engine.

It also delivers seamless, swift and secure digital payments to the customers, by facilitating prepaid wallet and leveraging technologies such as HCE, tokenization and QR Code.

The report gives a detailed and holistic view of the leading vendors, to help the CIO, heads of digital, and digital channel executives select the digital banking platforms that fulfil their specific digital transformation ambitions.

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Fidelity Bank Sells N41bn Bond at 8.5%, Intensifies Tier I Ambition

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Nneka Onyeali-Ikpe Fidelity Bank MD

By Dipo Olowookere

A mid-level financial institution in Nigeria, Fidelity Bank Plc, has issued local bonds worth N41.2 billion to investors.

The notes, with a 10-year maturity, were issued at a coupon rate of 8.5 per cent, the lender disclosed. This means the papers, which are part of the bank’s N100 billion bond issuance programme, are expected to mature in 2031.

Business Post recalls that in December 2020, Fidelity Bank announced its intention to approach the local debt market to raise fresh capital aimed to provide funding support to support Small and Medium-sized Enterprises (SMEs), retail business and technology infrastructure.

According to the CEO of the financial institution, Mrs Nneka Onyeali-Ikpe, who assumed office this year, the use of the proceeds of the bond sale aligns with the organisation’s tier-I ambition.

She further disclosed that, “The successful bond issuance highlights the confidence in the Fidelity brand, as well as our capability to expand our funding sources, and deliver innovative financial services to our esteemed customers.”

Fidelity Bank is a tier-2 bank and its inclusion in the topmost category will broaden the banking space in the country.

At the moment, only five lenders are on that level and they are Zenith Bank, Access Bank, GTBank, UBA and First Bank, all christened by Business Post as ZAGUF.

Also speaking on the bond sale, the Chairman of Fidelity Bank, Mr Mustapha Chike-Obi, said the exercise reaffirms the “continued investor confidence in our corporate strategy and aspirations, strong corporate governance structure and solid and stable executive management team with a robust history of superior financial performance and returns.”

It was gathered that the corporate debt instrument was 137 per cent subscribed as subscriptions worth N56.6 billion were received from diverse investors.

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