Union Bank of Nigeria Grows Annual Profit by 51.2%



Union Bank of Nigeria Grows Annual Profit by 51.2%
Mudassir Amray, UBN CEO

Union Bank of Nigeria Grows Annual Profit by 51.2%

Union Bank of Nigeria bolstered earnings performance in the financial year 2022, according to an audited statement submitted to the Nigerian Exchange. Nigeria’s tier-2 lender grew annual profit by 51.2% to N29 billion, its audited financial statement show.

Despite macroeconomic headwinds, the bank reported double-digit growth at the top and bottom lines.  Detail from the results shows that UBN gross earnings jumped up by 19% to ₦208.2 billion in 2022 compared with ₦175.0 billion reported in 2021.

The uptick was driven by strong growth in net interest income following the monetary authority’s hawkish pose that started in May 2022. Driven by growth in earning assets, the bank’s net interest income grew strongly in the year, up by 33% to ₦59.1 billion from ₦44.3 billion in 2021.

The audited statement showed that net operating income after impairments charge inched higher 10% to ₦110 billion from ₦99.7 billion in 2021.

In 2022, the bank’s profit before tax increased by 47% to ₦30.2 billion from ₦20.5 billion in 2021 following management effort to curtail operating expenses amidst a rising headline inflation rate.

Union Bank of Nigeria’s operating expenses for the period marginally grew by 0.4% to ₦79.4 billion from ₦79.2 billion in 2021.

Its gross loans grew by 11% to ₦1.0 trillion as the bank expand lending to vital economic sectors of opportunity, according to the management.

In the same year, the Nigerian lender drove customer deposits up by 9% to  ₦1.48 trillion from ₦1.36 trillion in December 202, supported by expansion in its product base and digital channels.

Union Bank said it invested in strengthening its technology architecture to drive key processes and serve more customers through digital and agent channels.

According to the bank, retail deposits grew by 14% to N675.8 billion from N594.9 billion in 2021.

Commenting on the results, Mudassir Amray, MD/CEO, said: “Despite the macroeconomic headwinds of 2022, we recorded strong performance across key financial and operational indicators.

“We were focused on our strategy of deepening our core business segments whilst enhancing our digital channels and service propositions to customers. On the back of this, we are increasing our customer acquisition and engagement, translating into higher revenues across our regions”.

“The Bank’s gross earnings grew by 19% to N208.1 billion from N175 billion in 2021. Whilst non-interest income declined marginally by 1.0%.

“Net interest income after impairment grew 26.1% to N55.8 billion from N44.2 billion in 2021 on the back of increasing responsible risk assets. Profit before tax closed at N30.2 billion, representing a growth of 47.1% from N20.5 billion recorded in 2021.

“In 2023, we will remain focused on executing our strategic initiatives, which are centered on pursuing additional opportunities to diversify our revenue sources while strengthening our core business.

“We also look forward to completing the merger of Union Bank of Nigeria and Titan Trust Bank, which began in 2022. The transition has gone smoothly, and I am confident that the combination will make us more formidable and well- positioned to capitalise on market opportunities.

“As we progress into 2023, I have no doubts that we will scale through all the macroeconomic pressures and sustain this growth momentum with continued support from the new core investors and board and continued trust from our customers to serve them.”

Speaking on the numbers, Chief Financial Officer Joe Mbulu said: “Our financial performance is a testament to the disciplined execution of our plans for the year and resilience against all odds. While pursuing liability generation and responsible risk assets, we maintained operational efficiency, managing cost drivers and avoiding wastage.

“Operating expenses increased marginally by 0.43% due to increased non-discretionary regulatory costs. Our cost-to-income ratio dropped to 72.5% from 79.4% in 2021 due to cost-control measures implemented during the year”.

Mbulu said the Bank’s balance sheet remains strong, with total assets increasing by 8.8% to N2.79 trillion due to growing loans and advances to customers.

“We expanded our net loan book by 11.5% from N868.8 billion in 2021 to N968.9 billion in 2022. In addition, customer deposits increased by 8.8% to N1.48 trillion.

“While we seek to grow our risk assets, maintaining quality assets remains a key priority. As a result, our NPL ratio reduced from 4.3% to 4.0%, and the capital adequacy ratio remained within regulatory limits at 14.4%”. #Union Bank of Nigeria Grows Annual Profit by 51.2%

 Nigeria Economic Growth to Slow Down in 2023 –GlobalData Forecasts

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