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
Oil fell further on Wednesday as the market considers how the US President, Mr Donald Trump’s proposed tariffs could affect global economic growth and demand for energy.
Brent futures declined by 29 cents or 0.4 per cent during the session to settle at $79.00 a barrel and the US West Texas Intermediate (WTI) lost 39 cents or 0.5 per cent to trade at $75.44 per barrel.
Possible sanctions under the new Trump administration remain unclear, with possible tariffs related to Canada and Mexico now seemingly at the forefront of trader uncertainties.
The American president also vowed to hit the European Union with tariffs and said his administration was discussing a 10 per cent duty on Chinese imports because the narcotic fentanyl is being sent from China to the US via Mexico and Canada.
Mr Trump had previously threatened a 10 per cent duty on Chinese imports but realigned that with the February 1 deadline.
On its part, China said it was willing to maintain communication with the US and sought to promote stable and sustainable ties.
In Europe, French President, Mr Emmanuel Macron, and German Chancellor, Mr Olaf Scholz, insisted Europe was strong while expecting difficulties due to threats of tariffs from the US.
The US president also said his administration would “probably” stop buying oil from Venezuela, a member of the Organization of the Petroleum Exporting Countries (OPEC) under US sanctions.
The US imported about 200,000 barrels per day of oil from Venezuela during the first 10 months of 2024, up from an average of 100,000 barrels per day in 2023, according to the latest data from the US Energy Information Administration (EIA).
Saudi Arabia’s crude oil exports in November jumped to their highest in eight months while Libya is planning to boost its crude refining capacity from the current 300,000 barrels per day to 400,000 barrels per day.
The American Petroleum Institute (API) estimated that crude oil inventories in the US increased by 1 million barrels for the week ending January 17. For the week prior, the API reported a draw of 2.6 million barrels in US crude oil inventories amid build season, while product inventories saw a hefty build for multiple weeks in a row.
In 2024, crude oil inventories dropped by more than 12 million barrels, according to the API’s inventory data, with the downward trend continuing beyond the new year.
Official data from the US EIA will be released later on Thursday with both weekly reports delayed by a day due to the US Martin Luther King Jr. Day holiday on Monday.
By Dipo Olowookere
The Nigerian Exchange (NGX) Limited came under selling pressure on Wednesday, resulting in a 0.29 per cent loss at the close of trading activities by 2:30 pm, when the closing gong was struck.
Data showed that investors booked profit on equities that have recorded a reasonable price appreciation in the past trading days.
As a result, the All-Share Index (ASI) was down by 301.86 points to 102,836.13 points from the preceding day’s 103,137.99 points and the market capitalisation went down by N186 billion to settle at N63.147 trillion versus Tuesday’s value of N63.333 trillion.
Business Post reports that apart from the banking sector, which gained 0.61 per cent yesterday, every other space turned red.
The insurance counter declined by 0.91 per cent, the consumer goods index tumbled by 0.26 per cent, the industrial goods counter crashed by 0.18 per cent, and the energy industry shrank by 0.11 per cent.
Multiverse topped the losers’ chart during the session after it lost 9.87 per cent to close at N10.05, May and Baker slipped by 9.78 per cent to N8.30, Prestige Assurance retreated by 7.69 per cent to N1.32, Guinea Insurance crumbled by 7.45 per cent to 87 Kobo, and Red Star Express moderated by 4.75 per cent to N4.81.
On the flip side, SCOA Nigeria appreciated by 9.70 per cent to N3.28, Cadbury Nigeria jumped by 9.65 per cent to N25.00, Secure Electronic Technology gained 9.59 per cent to 80 Kobo, C&I Leasing expanded by 5.85 per cent to N4.34, and FTN Cocoa grew by 5.41 per cent to N1.95.
On top of the activity log was Access Holdings with a turnover of 92.0 million shares valued at N2.2 billion, UBA exchanged 27.0 million stocks worth N919.3 million, Sterling Holdings traded 23.0 million equities for N124.1 million, AIICO Insurance transacted 17.9 million stocks worth N31.7 million, and Zenith Bank sold 17.0 million equities for N802.2 million.
In all, the market participants bought and sold 394.8 million stocks worth N15.2 billion in 10,766 deals at midweek versus the 440.3 million stocks valued at N12.0 billion transacted in 13,087 deals a day earlier.
This showed that the value of transactions increased during the session by 26.67 per cent as the volume of transactions and the number of deals decreased by 10.33 per cent and 17.74 per cent, respectively.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange recorded a 0.16 per cent decline on Tuesday, January 21, extending its loss this week to two.
This further depleted the market capitalisation of the alternative stock exchange by N1.65 billion at the close of transactions to N1.071 trillion from the N1.073 trillion it closed in the preceding session.
In the same vein, the NASD Unlisted Security Index (NSI) slid by 4.79 points to wrap the session at 3,100.33 points compared with 3,105.12 points recorded in the previous session.
The bourse ended with two price losers yesterday led by Geo Fluids Plc, which gave up 32 Kobo to trade at N4.38 per share versus Monday’s closing price of N4.70 per share and FrieslandCampina Wamco Nigeria Plc, which depreciated by 15 Kobo to close at N39.50 per unit compared with the previous day’s N39.65 per unit.
On the second trading day of the week, the number of deal carried out slightly went up by 8.3 per cent to 13 deals from the 12 deals executed at the previous trading session.
Also, the value of transactions increased by 97.2 per cent to N4.5 million from the N2.5 million recorded a day earlier, while the volume of securities traded in the session declined by 71.6 per cent to 183,780 units from the 767,610 units recorded on Monday.
FrieslandCampina Wamco Nigeria Plc remained the most traded equity by value (year-to-date) with 4.1 million units worth N162.9 million, followed by Geo-Fluids Plc with 9.1 million units valued at N44.0 million, and 11 Plc with 55,358 sold for N14.5 million.
Also, Industrial and General Insurance (IGI) Plc closed the day as the most active stock by volume (year-to-date) with 25.3 million units worth N5.9 million, trailed by Geo-Fluids Plc with 9.1 million units sold for N44.0 million, and FrieslandCampina Wamco Nigeria Plc with 4.1 million units valued at N162.9 million.
-
Feature/OPED5 years agoDavos was Different this year
-
Travel/Tourism8 years ago
Lagos Seals Western Lodge Hotel In Ikorodu
-
Showbiz2 years agoEstranged Lover Releases Videos of Empress Njamah Bathing
-
Banking7 years agoSort Codes of GTBank Branches in Nigeria
-
Economy2 years agoSubsidy Removal: CNG at N130 Per Litre Cheaper Than Petrol—IPMAN
-
Banking2 years agoFirst Bank Announces Planned Downtime
-
Sports2 years agoHighest Paid Nigerian Footballer – How Much Do Nigerian Footballers Earn
-
Technology4 years agoHow To Link Your MTN, Airtel, Glo, 9mobile Lines to NIN