Union Bank has posted a Profit Before Tax of ₦25.4billion in 2020 as against the ₦24.7billion posted in the 2019 financial year.
This is even as the Bank has declared a 25 kobo dividend for shareholders.
The core of this performance, according to the Bank is driven by the growth in our loan book, with 23.8per cent increase in gross loans, to ₦736.7billion from ₦595.3billion in 2019.
In its audited financial statements for the year ended 31st December 2020, the bank’s results for the period show sustained growth in key income lines and significantly improved fundamentals, notwithstanding a constrained operating environment largely due to the impact of the Covid-19 pandemic.
Union Bank’s investments in technology and building a progressive work culture over the past eight years, enabled a swift response to the pandemic that allowed our workforce transition to remote working while maintaining the productivity required to deliver these strong set of results in 2020.
Commenting on the results, Chief Executive Officer of the bank, Emeka Emuwa, CEO said, “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 8.3per cent from ₦95.5billion to ₦103.4billion and translated into 2.8per cent growth in Profit Before Tax to ₦25.4billion from ₦24.7billion.
“The core of this performance is driven by the growth in our loan book, with 23.8per cent increase in gross loans, to ₦736.7billion from ₦595.3billion in 2019.
“The pandemic accelerated trends in customer behaviour and we have seen rapid increase in digital adoption with a 38per 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 11per cent from 25,000 users to 27,700 users. 94per cent of transactions in the Bank are now done digitally, up from 89per 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,” he said.
Speaking further, he said, in 2021, 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.
“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,” he said.
Chief Financial Officer of the Bank, Joe Mbulu said, “We are pleased with both our top and bottom-line performance in 2020, in light of the impact of the pandemic and economic challenges. 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 10per cent (₦77.9billion from ₦70.8billion), well below the rate of inflation.
“Consequently, we saw marginal increase in our cost to income ratio to 75.4per cent from 74.1per cent.
“Our customer deposits hit a milestone during the year, crossing the ₦1trillion mark to ₦1,131.1billion from ₦886.3billion in Full Year 2019, an increase of 27.1per cent. Low cost deposits were up by 17per cent, constituting 68per cent of total deposits helping to push cost of funds down by 1.4per cent.
“We continued to proactively manage our growing risk asset portfolio and recorded better asset quality, with our NPL ratio improving from 5.8per cent to 4.0per cent. This achievement, combined with a solid capital adequacy at 17.5per 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,” he said.
