The board of Union Bank of Nigeria Plc, on Thursday released its financials for the full-year ended December 31, 2017, well beyond the March 31, 2018 filing deadline, with the figures indicating a marginal slide in net profit, despite the 26% rise in earnings, as operating costs ballooned comparatively.
Even so, total non-performing loans for the period soared from N37.26bn in December 2016 to N110.911bn, following which non-performing loans ratio jumped to 19.78%, up from just 6.91% in the prior year.
Specifically, the result showed that gross earnings of Union Bank rose by 26.42% from N129.606bn in 2016, to N163.844bn; with interest income contributing N125.549bn, as against the N99.721bn in previous year, representing 24.9% rise. The bulk of revenue came from the Treasury and Investment Banking business which contributed N45.658bn, followed closely by the N45.384bn from retail banking. Corporate banking added N42.216bn to the pool; while commercial banking attracted N30.585bn.
The group could not contain the interest expenses, as it grew 66.89% from N34.682bn to N57.88bn; mainly also from the N25.284bn reported in the Treasury and investment banking segment; ahead of the N14.095bn by corporate banking; N13.766bn in the retail banking; and N4.095bn from commercial banking. This left a net interest income of N66.669bn, just 2.51% better than the N65.039bn.
Net impairment charge for credit losses for the period worsened by 43.24% from N17.879bn to N25.609bn; leaving net interest income after impairment charges for credit losses of N41.06bn, a 12.93% drop when compared to the N47.16bn of prior year.
Net fee and commission income for the period slowed down to N10.207bn from N10.577bn; the impact of which was further mitigated by the 79.39% climb in net trading income from N5.089bn in 2016FY to N9.129bn.
Net income from other financial instruments at fair value through profit or loss dropped by 85.93% to N362m, compared to N2.572bn in 2016; other operating income stood at N19.597bn from N11.647bn, representing a 68.26% rise; just as non-interest income improved by 31.49% from N29.885bn to N39.295bn.
Net impairment write-back on other financial assets dropped by 57.86% from N693m to N292m; net operating income after net impairment write-back and other financial assets stood at N80.647bn from N77.738bn; while personnel expenses dropped 5.37% to N29.557bn from N31.234bn.
Depreciation and amortization rose 20.13% to N4.572bn from N3.806bn; amortization of intangible assets rose to N1.466bn from N1.1bn’ and other operating expenses from N25.86bn in 2016 to N29.533bn, representing a 14.2% growth; bringing total expenses to N65.128bn from N62bn.
Union Bank therefore posted a profit before tax from continuing operations of N15.519bn, down from N15.738bn in 2016, driven by the N15.928bn from treasury and investment banking; followed by N4.655bn from corporate banking and N799m from commercial banking. Retail banking was therefore the laggard, as it recorded a N5.863bn loss before tax. A 162.54% rise in income tax expense at N911m, up from N347m in prior year, left profit after tax at N14.608bn, down from the previous N15.391bn, translating to earnings per share of 81 kobo, down from 92 kobo in 2016
Union Bank however grew total assets for the period by 16.2% to N1.455tr from N1.252tr, with customer loans and advances rising marginally from N507.19bn to N517.103bn. Total liabilities rose 14.14% from N981.012bn to N1.109tr, lifted expectedly by customer deposits of N802.384bn, an improvement over the N658.444bn reported in prior full-year. Shareholders’ fund therefore improved by 27.27% from N271.67bn in 2016 to N345.741bn.
