By Mike Abba
The Union Bank of Nigeria Plc has announced a Group’s earnings of N109.5 billion for the nine months ending September 30, 2017.
The figure represents 16 per cent increase over the result recorded in the preceding period of 2016.
The result is contained in the Bank’s unaudited nine months operations for the third quarter ending of September 30, 2017 submitted to the Nigerian Stock Exchange (NSE) in Lagos.
The report showed that the Group’s gross earnings rose to N109.5 billion in 2017 third quarter from N94.8 billion in nine months of 2016.
Rise in interest income by as high as 22per cent accounted for the increase in gross earnings.
A look into the report showed that interest income rose up to N88.5billion from N72.3billion reported in the preceding period of 2016.
Again, a growth of 507 billion in average gross loans from N412 billion in the nine months of 2016 contributed to the positive result.
However, the Bank reported a drop in its Profit Before Tax (PBT) to N13 billion from N13.3 billion reported in nine months of 2016.
Commenting on the Bank’s results for the nine month period, Chief Executive Officer, Mr. Emeka Emuwa, said: “We remain encouraged by the results of our customer acquisition strategy, as customers continue to respond to our targeted market offerings and increased brand
awareness, following the debut of a new advertising campaign to support the launch of Union Bank’s new digital platform, including our revamped mobile banking app and *826#, our SMS banking platform.
“Customer deposits are up 17 per cent from December 2016 to close the period at N767.9 billion.
Group Gross Earnings, at N109.5billion, reflect a 16 per cent growth compared to the period ended 30 September 2016.
“However, a challenging macro-operating environment, characterised by double-digit inflation, continues to create headwinds for businesses, constrict consumer purchasing power and pressure operating expenses as well as portfolio quality.
“Consequently, core pre-tax earnings for the period were marginally lower at N13.0billion
compared to N13.3billion in 9M 2016. With the N50 billion capital raise underway, we remain focused on our strategic priorities and expect this new capital to deliver the momentum needed to accelerate the pace of our business growth.”
On his part, the Bank’s Chief Financial Officer, Oyinkan Adewale said, “The Group’s net interest income after impairments improved significantly by 16 per cent from N35.2billion to N40.9billion compared to the period ended 30 September 2016.
“Non- interest income is down by six per cent compared to 9M 2016, which included one-time revaluation gains.
“With our continued focus on early problem recognition and prudent provisioning, our
coverage ratio has strengthened to 203 per cent as at 30 September 2017, from 182 per cent as at
December 2016.
“The impact of Naira devaluation, coupled with the inflationary environment, has pressured our cost-to-income ratio, especially as we continue to make investments in technology critical to our long-term business strategy.
We are confident that these investments will deliver the expected cost benefits in the medium term. We also expect improved capital adequacy and higher revenues, fueled by N50 billion of new capital.”
The bank had rolled out a N50 billion capital raise through rights issue which lasted between September 20 and October 30, to boost its capital base.
