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 Adedapo Adesanya
MTN Group, Africa’s largest mobile network operator, has entered advanced discussions to buy approximately 75 per cent of shares in IHS Holding Limited (IHS Towers) that it does not already own.
The move would give the South African telco full control of IHS, which is the leading independent tower operator in several of its key markets, providing colocation services and supporting the expansion of mobile networks in regions with growing demand for digital connectivity.
In a cautionary announcement to investors on Thursday, MTN confirmed it is considering a transaction to acquire the remaining stake in the New York Stock Exchange-listed IHS, following recent market speculation.
The potential offer price would be “at a level near the last trading price” of IHS shares on the NYSE as of February 4, 2025, a period when the stock has seen a sharp rise in recent months, reflecting renewed investor confidence in the sector.
No binding agreement has been reached, and MTN emphasised there is no certainty that the deal will proceed.
However, if completed, the transaction could materially impact MTN’s share price, prompting the company to advise shareholders to exercise caution in trading until further updates.
MTN already holds a significant stake in IHS and maintains a deep operational partnership across multiple African markets.
Over the past decade, MTN has sold thousands of passive network sites to IHS through sale-and-leaseback deals, including a major transaction in South Africa in 2022 involving over 5,700 towers.
These arrangements allowed MTN to free up capital from infrastructure while securing long-term tower access via master lease agreements.
A full buyout would represent a dramatic strategic pivot for MTN, effectively bringing tower infrastructure back in-house after years of outsourcing to specialised operators like IHS.
MTN has previously voiced concerns about corporate governance at IHS, adding context to its cautious approach in the announcement.
If the deal falls through, MTN said it would continue exploring options to unlock value from its IHS investment, consistent with its disciplined capital allocation strategy.
The potential acquisition underscores the evolving dynamics in Africa’s telecom infrastructure sector, where operators weigh the benefits of owning versus leasing critical assets amid rising data demands and economic pressures.
By Adedapo Adesanya
For the third consecutive trading session, the NASD Over-the-Counter (OTC) Securities Exchange ended in the green territory, rising further by 0.77 per cent on Thursday, February 5.
Two price gainers helped the bourse to rally during the session, with the market capitalisation up by N16.87 billion to N2.197 trillion from N2.180 trillion and the NASD Unlisted Security Index (NSI) up by 3.18 points to 3,672 points from the 3,644.48 points in the midweek session.
The advancers’ group was led by Central Securities Clearing System (CSCS), which added N3.70 to sell at N48.67 per share versus the previous day’s N44.97 per share, and Afriland Properties Plc expanded by N1.01 to N15.01 per unit from N14.01 per unit.
It was observed that the alternative stock exchange recorded two price losers led by Geo-Fluids Plc, which further lost 51 Kobo to sell at N4.75 per share versus Wednesday’s closing price of N5.26 per share, and Industrial and General Insurance (IGI) declined by 6 Kobo to 59 Kobo per unit from 65 Kobo per unit.
During the session, the volume of securities transacted by investors slid by 51.9 per cent to 1.2 million units from 2.5 million units, the value of securities went down by 32.0 per cent to N12.0 million from N17.7 million, and the number of deals increased by 27.8 per cent to 23 deals from 18 deals.
At the close of trades, CSCS Plc was the most traded stock by value on a year-to-date basis with 16.2 million units exchanged for N659.9 million, followed by FrieslandCampina Wamco Nigeria Plc with 1.7 million units traded for N117.8 million, and Geo-Fluids Plc with 12.3 million units valued at N79.1 million.
CSCS Plc remained the most active stock by volume on a year-to-date basis with 16.2 million units sold for N659.9 million, trailed by Mass Telecom Innovation Plc with 13.6 million units valued at N5.5 million, and Geo-Fluids Plc with 12.3 million units worth N79.1 million.
By Dipo Olowookere
The Nigerian Exchange (NGX) Limited recorded another milestone after it further closed higher by 1.18 per cent on Thursday amid renewed confidence in the market.
The All-Share Index (ASI) crossed the 170,000-point threshold during the session as it added 1,975.18 points to the preceding day’s 168,030.18 points to settle at 170,005.36 points.
Also yesterday, the market capitalisation of Customs Street was up by 1,268 trillion to N109.129 trillion from the N107.861 it ended a day earlier.
The growth recorded during the session was powered 55 equities, which outweighed the losses recorded by 19 other equities.
Guinea Insurance expanded by 10.00 per cent to N1.43, Seplat Energy grew by 10.00 per cent to N7,370.00, RT Briscoe increased by 9.95 per cent to N11.49, Neimeth chalked up 9.90 per cent to close at N11.10, and Zichis rose by 9.89 per cent to N6.11.
At the other side, Deap Capital lost 9.62 per cent to trade at N6.20, Universal Insurance slipped by 9.43 per cent to N1.44, Haldane McCall declined by 9.09 per cent to N4.00, Red Star Express went down by 9.04 per cent to N15.60, and UPDC depreciated by 7.02 per cent to N5.30.
Business Post reports that the energy index was up by 4.68 per cent, the industrial goods improved by 0.79 per cent, the banking space grew by 0.64 per cent, and the consumer goods sector soared by 0.11 per cent, while the insurance counter lost 0.31 per cent.
Yesterday, market participants traded 713.0 million stocks valued at N22.3 billion in 46,104 deals versus the 694.8 million stocks worth N20.6 billion transacted in 42,095 deals on Wednesday, showing a spike in the trading volume, value, and number of deals by 2.62 per cent, 8.25 per cent, and 9.52 per cent, respectively.
Access Holdings sold 106.6 million shares valued at N2.5 billion, Chams transacted 44.5 million equities worth N201.3 million, Champion Breweries traded 44.5 million stocks for N774.3 million, Universal Insurance exchanged 34.8 million shares worth N53.6 million, and Deap Capital sold 22.7 million equities valued at N141.9 million.
-
Feature/OPED6 years agoDavos was Different this year
-
Travel/Tourism9 years ago
Lagos Seals Western Lodge Hotel In Ikorodu
-
Showbiz3 years agoEstranged Lover Releases Videos of Empress Njamah Bathing
-
Banking8 years agoSort Codes of GTBank Branches in Nigeria
-
Economy3 years agoSubsidy Removal: CNG at N130 Per Litre Cheaper Than Petrol—IPMAN
-
Banking3 years agoSort Codes of UBA Branches in Nigeria
-
Banking3 years agoFirst Bank Announces Planned Downtime
-
Sports3 years agoHighest Paid Nigerian Footballer – How Much Do Nigerian Footballers Earn