Banking
Union Bank Records N18bn Profit as NPL Ratio Drops to 8.7%
By Dipo Olowookere
On Tuesday, Union Bank of Nigeria announced its audited financial statements for the year ended December 31, 2018.
In the results, the lender grew its profit before tax by 33 percent to N18.5 billion from N13.9 billion, while the profit after tax went up by 39 percent to N18.1 billion from N13 billion.
However, the gross earnings during the year went down by 11 percent to N145 billion from N168 billion in 2017.
Union Bank has continued to position itself to continue executing key business priorities in 2019 especially with the successful execution of its debut local currency bond issue to raise N13.5 billion and the tightening up of its loan portfolio.
It was observed that the decline in the revenue in the year was as a result of the 8 percent drop in the bank’s loan book as the NPL ratio reduced to 8.7 percent from 19.8 percent.
A further analysis of the results showed that the net revenue after impairments moved up by 16 percent to N93.5 billion compared with N80.64 billion in 2017, while customer deposits rose to N857.6 billion from N802.4 billion, with the operating expenses increasing from N66.7 billion in 2017 to N75.0 billion.
Commenting on the results, the MD/CEO of Union Bank, Mr Emeka Emuwa, said, “Our priorities in 2018 were three pronged; enhancing our productivity across board; tightening up our loan portfolio (especially resolving key large exposures which drove NPLs up significantly at the end of 2017); and optimizing the bank’s capital and funding base.
“I am pleased to report that we made significant strides in each focus area. Notwithstanding a depressed economic environment and a challenging operating landscape, our efforts to optimise productivity delivered results.
“Union Bank’s Group Profit Before Tax (PBT) is up 33% to N18.5 billion in 2018 from N13.9 billion in 2017. As consumer confidence in the brand continues to grow, customer deposits also continue to grow, up 7.3% to N857.6 billion in 2018 from N802.4 billion in 2017.
“Our Net Revenues After Impairments are also up 16% to N93.5 billion compared with N80.6 billion in 2017 with significant contribution from growth in retail transaction volumes across our channels.
“Through an aggressive focus on recoveries and recognising fully provisioned loans on our books, we successfully reduced the bank’s NPL ratio, which is now down to 8.1% in 2018 from 20.8 percent at the end of 2017, in line with guidance provided at the start of the year.
“In 2019, we will continue to maintain focus on recoveries while prudently rebuilding our loan book and maintaining a conservative risk profile.
“On the funding side, we successfully initiated the first tranche of our oversubscribed local currency bond programme to raise N13.5 billion.
“We are encouraged by the market and investor community response to the bond issue and subsequent listing on the FMDQ platform as we continue our drive to optimize the bank’s capital and funding structure.
“In 2019, we will double-down on our productivity efforts to deliver our financial targets. We are harnessing synergies across our business segments to ensure we maximize opportunities across entire value chains, while centralising key business and operational functions for better efficiency, and prioritizing customer experience across all our touch points.
“We are also pleased to be introducing our women focused initiative, αlpHer, which will provide a portfolio of financial and non-financial services to women across customer segments in Nigeria.
“Lastly, we have commenced the Long-Term Efficiency Acceleration Programme (LEAP), a comprehensive transformation effort to embed cost discipline across the bank.
“We believe LEAP will deliver significant cost savings in 2019 and entrench a culture of efficiency across all areas of the bank.”
Also commenting, the Chief Financial Officer, Mr Joe Mbulu, said, “Gross revenues declined by 11% to N145.5 billion in 2018 from N163.8 billion in the previous year as a direct consequence of the loan book clean-up and resolution of key exposures.
“Notwithstanding significant investments to execute our strategy including expanding our agency banking footprint and aligning compensation with market for our entry to mid-level employees (which increased operating expenses by 12% from N66.7 billion in 2017 to N75.0 billion as at December 2018), we are pleased that our core business delivered a 33% growth to our topline PBT. Through LEAP, we will ensure that operating expenses in 2019 remain within the bank’s targets.
“Our Return on Tangible Equity (ROTE) improved to 9.6% from 6.2% in 2017 demonstrating long-term shareholder value enhancement.
“In addition to our successful fund raising activities during the year, we will further support future growth and creation of high quality risk assets in 2019 through a Tier II capital raise.
“This will boost our Capital Adequacy Ratio, which is currently at 16.4% and remains above the regulatory limit.”
By Adedapo Adesanya
First Holdco Plc has commenced a public offer to raise about N1.4 trillion (approximately $1 billion) after securing approval from the Central Bank of Nigeria (CBN).
The offer, which opened on Monday, involves the sale of 10.4 billion ordinary shares, according to the chief executive of its banking subsidiary, First Bank of Nigeria Limited, Mr Olusegun Alebiosu.
The capital raise follows the company’s earlier plan to transfer about a quarter of its shares to RC Investment Management Ltd., which served as a bridge holder after Barbican Capital Limited exited its investment in the lender amid a prolonged ownership and leadership dispute.
First Holdco had previously indicated that the shares would eventually be offered to the investing public once the necessary regulatory approvals were obtained.
Speaking in an interview with Bloomberg, Mr Alebiosu said proceeds from the offer would strengthen the capital base of First Bank and support the holding company’s expansion strategy.
According to him, the group intends to diversify beyond banking by establishing an insurance underwriting business and a fintech services company.
“The sale is starting today — the reality here is that I am not sure it will stay more than one week based on the pressure we are getting,” Mr Alebiosu said, expressing confidence in strong investor demand.
Investors appeared to respond positively to the announcement, with First HoldCo’s shares climbing as much as 5.9 per cent to a record high during trading on Monday before easing to a 3.1 per cent gain at N133.60 by early afternoon in Lagos.
The lender has been one of the best-performing banking stocks on the Nigerian Exchange (NGX) Limited over the past year, with its share price rising more than fourfold since July 2025, when Barbican Capital’s stake was transferred to RC Investment Management.
The fresh capital injection comes as its largest shareholder, Mr Femi Otedola, continues to strengthen his stake in Nigeria’s oldest bank. With the billionaire holding around a 26 per cent stake in the company, analysts say he has his eyes set on full control once his equity crosses the 30 per cent mark.
By Adedapo Adesanya
One of Nigeria’s top digital banks, PalmPay, has appointed a former executive of the Nigeria Inter-Bank Settlement System (NIBSS), Mr Samuel Oluyemi, as its chief operating officer.
In his new role, Mr Oluyemi will oversee the financial technology company’s operations in Nigeria, where it offers a broad range of digital financial services to individuals and businesses.
Mr Oluyemi will also engage with regulators to ensure the company’s expansion aligns with Nigeria’s financial, digital and social inclusion objectives.
Prior to joining the company, Mr Oluyemi spent more than two decades at NIBSS, where he served as business development lead.
During his tenure, he drove the development of several critical payment infrastructure projects, including the digital validation of Nigerian international passports, e-Dividend Mandate Management System (e-DMMS), and the Electronic Pensions Contribution Collection System (EPCCOS).
Also, he played a key role in the introduction and early adoption of the NIBSS Instant Payment (NIP) platform, Nigeria’s first real-time interbank transfer system launched in 2011, and later supported its extension to other financial institutions.
Mr Oluyemi obtained a master’s degree in Monetary Economics from the University of Ibadan and has participated in several local and international professional training programmes.
Commenting on the appointment, Managing Director of PalmPay Nigeria, Mr Chika Nwosu, said that the company was strengthening its leadership team to support its longterm vision.
By Adedapo Adesanya
Africa’s most valuable fintech, Flutterwave, has signalled that its long-anticipated initial public offering (IPO) remains firmly on the back burner as the company intensifies efforts to transform itself into a licensed financial institution across the continent.
The firm’s chief executive, Mr Olugbenga Agboola, said the firm is focused on building sustainable profitability, diversifying its revenue streams and expanding its banking footprint before considering a stock market listing.
Speaking to The Africa Report, Mr Agboola described an IPO as a future financing milestone rather than an immediate strategic objective.
“An IPO is a financing event, not a strategy,” he said. “We are not holding any pressure to go public. This gives us the flexibility to be patient and ensure when we do list, we’re doing so from a position of strength.”
The comments come as Flutterwave embarks on an acquisition-led expansion strategy aimed at securing banking licences and deeper regulatory access across Africa.
Mr Agboola revealed that the company is currently in the process of acquiring a bank in East Africa, though he declined to disclose the institution or country involved.
The planned acquisition is expected to provide Flutterwave with an established customer base, existing banking infrastructure and regulatory approvals, significantly shortening the time required to enter new financial services markets.
According to Mr Agboola, the company’s expansion priorities include Kenya, Ghana, Rwanda, Tanzania, South Africa and Egypt, while the Democratic Republic of Congo and Ethiopia remain under consideration for future growth.
Rather than building banks from scratch in every market, Flutterwave intends to adopt a mix of acquisitions, licences and strategic partnerships depending on local regulatory conditions.
“The vision is not to form a bank in every country but to ensure that every African business has access to more than financial services,” Mr Agboola said in the interview.
The banking push follows recent regulatory and corporate developments, including the Central Bank of Nigeria’s approval of Flutterwave’s banking licence and the acquisition of open banking startup Mono.
Together, the moves underscore a broader strategy to expand beyond payments and establish new revenue streams in lending, liquidity management and business banking services.
Flutterwave plans to focus on institutional deposits from businesses already using its platform rather than competing aggressively for retail deposits.
The company intends to leverage transaction data from its payments network to provide short-term working capital, merchant financing, invoice discounting and trade finance products for small and medium-sized enterprises.
Mr Agboola disclosed that the bulk of the capital earmarked for banking operations will be directed toward credit support and liquidity buffers, with additional allocations for lending and banking infrastructure.
The strategy reflects a growing trend among African fintech firms seeking banking licences to reduce dependence on traditional financial institutions and gain greater control over settlement, liquidity management and product development.
Despite speculation about a near-term public listing, Mr Agboola maintained that Flutterwave’s immediate focus remains execution and growth.
He noted that the company will only consider an IPO after achieving stronger profitability and establishing scale across its payments, banking and remittance businesses.
In February 2025, he told Bloomberg that Flutterwave would only pursue a public offering after becoming profitable. He also stated in late 2024 that the company was “not in the IPO race.”
Founded in 2016, Flutterwave has processed more than one billion transactions valued at over $40 billion across 35 African countries. The company recently secured fresh funding that lifted its valuation to $3.3 billion, with American blockchain firm Ripple leading the investment round.
For now, however, Flutterwave appears more interested in building the foundations of a pan-African financial institution than rushing to the public markets, positioning banking expansion as the next phase of its growth story while keeping an eventual IPO firmly on the long-term horizon.
