Economy
Union Bank Grows PAT by 17% to N5.3b in Q1 2018
By Dipo Olowookere
One of the old generation financial institutions in the country, Union Bank of Nigeria Plc, has recorded a 17 percent growth in its profit after tax in the first quarter of 2018.
In its audited financial statements for the quarter ended March 31, 2018 announced on Thursday, the lender said its PAT appreciated to N5.3 billion from N4.5 billion in the corresponding period of last year, just as the profit before tax closed at N5.4 billion as at March 31, 2018 in contrast to N4.7 billion in Q1 2017.
Also, the gross earnings went up by 15 percent to N39.5 billion from N34.3 billion in Q1 2017, driven by improvement in net interest margins from 7.1 percent to 8.7 percent and 18 percent increase in non-interest income due to enhanced trading income and increased volumes on alternate banking channels.
Furthermore, interest income increased by 14 percent to N31.7 billion from N27.7 billion in Q1 2017 buoyed by improved yields on loans and government securities.
In addition, the firm’s net interest income before impairment rose by 22 percent to N17.8 billion from N14.6 billion in Q1 2017, driven by 14 percent increase in interest income and a lower 6 percent increase in interest expense.
It was also revealed in the statements that the non-interest income went up by 18 percent to N7.8 billion from N6.6 billion in Q1 2017, driven by a combination of trading income and alternate channel revenues, while the net operating income increased by 11 percent to N23.3 billion from N20.9 billion in Q1 2017.
Furthermore, the operating expenses jumped by 10 percent to N17.9 billion from N16.3 billion in Q1 2017, largely due to regulatory levies from the NDIC and AMCON.
However, the gross loans went down by 12 percent to N495.5 billion from N560.7 billion as at December 2017 as a result of collection efforts and the write-off of some non-performing loans.
During the period under review, the customer deposits of Union Bank went down by 5 percent to N759.1 billion from N802.4 billion in December 2017 as the lender optimised the deposit book towards lower-cost deposits.
It was observed that there was a 68 percent increase in new-to-bank accounts when compared with Q1 2017, highlighting customer acceptance of new products and increasing brand penetration.
There was also a 90 percent increase in volume of funds transfer transactions on Union Bank’s alternate channels, highlighting efficiencies gained from technology investments, which are driving increased customer adoption.
Commenting on the results, the chief executive of Union Bank, Mr Emeka Emuwa, stated that, “In 2018, we renewed our focus on driving efficiency and productivity across the entire organization.
“The objective is to ensure we fully leverage our resources including human, technology and new capital in order to maximize our bottom line.
“While we are just in the early stages of this drive, we are already starting to see positive results. In the first quarter, our Profit Before Tax grew by 16 percent compared to the same quarter in 2017. Gross earnings, bolstered by improved asset yields, strong treasury trading and revenue from our alternate channels, which is steadily seeing increasing customer adoption, are also up by 15 percent to N39.5 billion against N34.3 billion Q1 2017.
“Our Group Non-Performing Loan Ratio is down to 14.9 percent from 19.8 percent at the end of 2017.
“We continue to maintain aggressive focus on our impaired loans and we expect to resolve some large exposures in the course of the year, which will further drive down the ratio. We are pushing strongly on debt recovery efforts across board including initiating or continuing legal action where necessary.
“For the first half of the year, we will continue to hone initiatives around our productivity drive, focusing our people on targeted opportunities across regions and optimising our technology and digital platforms to deliver operational efficiency and improved customer service.
Also speaking on the Q1 2018 numbers, Chief Financial Officer of the bank, Oyinkan Adewale said, “The first quarter numbers reflect the adoption of International Financial Reporting Standards (IFRS) 9, which came into effect at the start of 2018. We are pleased that the Bank’s regulatory risk reserve was adequate to absorb the impact of the new accounting rules.
“Our Capital Adequacy Ratio (CAR) remains robust at 17.9 percent in spite of the impact of IFRS 9 on impairments. Liquidity ratio is at 39.4 percent, well above the minimum requirement, while Net Interest Margin improved to 8.73 percent from 7.14 percent in Q1 2017.
“Profit After Tax (PAT) rose 17 percent to N5.3 billion compared to N4.5 billion recorded in Q1 2017. Notwithstanding a 19 percent and 27 percent increase in our AMCON levy and NDIC premium respectively, our operating expenses increased by only 10 percent given the continued focus on optimising operating costs.
“We continue to proactively in managing the risks in our business as we pursue targeted opportunities identified for growth.”
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange extended its gains by 0.91 per cent on Wednesday, June 3, spurred by three price gainers led by FrieslandCampina Wamco Nigeria Plc, which rose by N13.90 to sell N210.41 per share versus the previous day’s N196.51 per share. MRS Oil appreciated by N10 to N190.00 per unit from N180.00 per unit, and Food Concepts Plc added 5 Kobo to sell at N3.00 per share versus N2.95 per share.
As a result, the market capitalisation increased by N23.91 billion to N2.660 trillion from N2.636 trillion, and the NASD Unlisted Security Index (NSI) gained 39.97 points to finish at 4,446.27 points, in contrast to Tuesday’s 4,406.30 points.
The NASD exchange witnessed three price losers at midweek, led by Nipco Plc, which shrank by N21.30 to close at N325.97 per unit compared with the previous session’s N347.27 per unit, Nitrox Industrial Gases Plc went down by N1.20 to quote at N24.30 per share versus the preceding session’s N25.50 per share, and Central Securities Clearing System (CSCS) Plc weakened to by 69 Kobo to N75.41 per unit from N76.10 per unit.
The volume of trades yesterday significantly improved by 71.5 per cent to 527,221 units from Tuesday’s 307,363 units, as the value of transactions soared by 49.9 per cent to N64.2 million from the preceding session’s N49.9 million, and the number of deals surged by 9.5 per cent to 46 deals from 42 deals.
When trading activities ended for the day, Great Nigeria Insurance (GNI) Plc remained the most active stock by value on a year-to-date basis with 3.4 billion units valued at N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units worth N6.5 billion, and CSCS Plc with 64.6 million units exchanged for N4.4 billion.
GNI Plc also ended the session as the most traded stock by volume on a year-to-date basis with 3.4 billion units sold for N8.4 billion, followed by Infracredit Plc with 2.3 billion units traded for N6.5 billion, and Resourcery Plc with 1.1 billion units transacted for N415.7 million.
By Adedapo Adesanya
The positive run of the Naira against the US Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) continued on Wednesday, June 3, with the former chalking up N3.79 or 0.28 per cent against the latter, closing at N1,357.26, in contrast to the preceding session’s N1,361.05/$1.
Similarly, the Nigerian currency gained N10.52 against the Pound Sterling in the official market during the session to close at N1,822.67/£1 compared with the previous rate of N1,833.19/£1, and appreciated against the Euro by N9.56 to N1,574.83/€1 from N1,584.39/€1.
Further, at the black market, the Naira improved its value against the greenback at midweek by N5 to trade at N1,375/$1 compared with the N1,380/$1 it was traded a day earlier, and at the GTBank FX counter, it gained N6 to sell for N1,372/$1 versus N1,378/$1.
The boost came as the country’s external reserves continued to gain momentum. A look at the updated data from the Central Bank of Nigeria (CBN) showed that foreign reserves continue to increase with two consecutive inflows in June 2026, settling at $49.876 billion as of Tuesday.
Foreign portfolio investors, exporters and non-bank corporates continue to keep the supply side strong, with the less aggressive FX interventions by the CBN at the official window in recent times helping to ease worries about capital flight.
The apex bank reported that interbank FX turnover declined to $133.731 million across 136 deals, from $169.822 million the previous day.
Meanwhile, the cryptocurrency market remained bearish due to sell-offs triggered by geopolitical uncertainties and the US stock market rally.
Cardano (ADA) dipped by 5.5 per cent to $0.2046, Binance Coin (BNB) slumped by 4.8 per cent to $627.56, Solana (SOL) shrank by 3.9 per cent to $72.99, Ethereum (ETH) depreciated by 2.9 per cent to $1,844.53, and Bitcoin (BTC) slipped by 2.7 per cent to $65,675.87.
Further, Dogecoin (DOGE) depleted by 1.4 per cent to $0.0928, Ripple (XRP) declined by 0.7 per cent to $1.21, and TRON (TRX) lost 0.4 per cent to sell at $0.3336, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) gained 0.01 each to settle at $0.9986 and $0.9997, respectively.
By Dipo Olowookere
Nigeria’s stock market further depleted by 1.44 per cent on Wednesday following panic sell-offs by investors, who are cutting down their exposure to local equities.
Business Post observed that profit-taking dominated Customs Street at midweek, with all the key sectors of the Nigerian Exchange (NGX) Limited closing in red.
The insurance space shed 2.76 per cent, the industrial goods index lost 1.55 per cent, the banking counter declined by 1.53 per cent, the consumer goods segment shrank by 0.28 per cent, and the energy sector weakened by 0.05 per cent.
As a result, the All-Share Index (ASI) contracted by 3,554.05 points to 243,132.61 points from 246,686.66 points, and the market capitalisation moderated by N2.279 trillion to N155.940 trillion from N158.219 trillion.
Lafarge Africa led the losers’ chart yesterday after it gave up 9.97 per cent to trade at N307.90, Zichis lost 9.82 per cent to close at N29.20, Learn Africa depreciated by 9.80 per cent to N11.50, John Holt crashed by 9.80 per cent to N13.80, and Consolidated Hallmark dipped by 8.84 per cent to N6.19.
On the flip side, Abbey Mortgage Bank topped the gainers’ log after it grew by 9.93 per cent to N7.75, International Energy Insurance appreciated by 9.89 per cent to N6.00, Tripple G gained 9.80 per cent to sell for N4.37, Universal Insurance expanded by 8.91 per cent to N1.10, and Royal Exchange improved by 7.14 per cent to N1.50.
A total of 17 stocks gained weight yesterday, while 43 stocks lost weight, indicating a negative market breadth index and weak investor sentiment. This has been the mood of the market since the beginning of this week.
Market participants transacted 923.0 million shares worth N42.3 billion in 69,332 deals on Wednesday, in contrast to the 718.8 million shares valued at N29.3 billion traded in 71,683 deals on Tuesday, representing a drop in the number of deals by 3.28 per cent, and a rise in the trading volume and value by 28.41 per cent and 44.37 per cent, respectively.
Sterling Holdings led the activity chart with 264.6 million units valued at N2.1 billion, Access Holdings traded 76.7 million units worth N1.8 billion, Linkage Assurance exchanged 55.1 million units for N99.2 million, VFD Group sold 35.5 million units worth N378.8 million, and Ellah Lakes transacted 33.1 million units valued at N334.3 million.
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