The Chief Executive of Union Bank of Nigeria Plc, Emeka Emuwa, says the current Coronavirus (COVID-19) pandemic poses daunting challenges for the global and Nigerian economies, as well as the bank’s business.
This, he said, is why Union Bank of Nigeria will focus in the short term on ensuring business continuity through its strong operational risk framework, following which it is poised to support customers through the crisis.
In a statement that followed the submission of its unaudited financials for the 2020 first-quarter, the bank noted the reinforcement of its “digital platforms to continue delivering value and convenience to our customers while aligning our focus areas to where opportunities emerge during and post COVID-19.”
This, Emuwa continued, is while ensuring “the health and well-being of employees by adopting stringent health and safety protocols at our operating branches and offices. We will continue to support the government, private entities, and our communities in the fight against COVID-19.”
Commenting on the results, Emuwa, said “coming off a strong 2019, we maintained a focus on executing our strategic priorities in Q1 2020, delivering double-digit growth across all our major income lines.
According to the result, gross earnings rose by 18% to ₦42.6bn from the previous ₦36.1bn in Q1 2019; driven by what the bank said is an increase in earning assets, including the 18% growth in interest income to ₦29.7bn, as against the ₦25.2bn reported in 2019Q1.
Net interest income before impairment improved by 38% to ₦14.8bn from ₦10.8bn in Q1 2019); driven by the growth in treasury assets; just as non-interest income improved also by 18% to ₦12.9bn from ₦10.9bn in Q1 2019. This, it noted, was driven by robust trading income, and growth in e-business and revaluation gains.
Net operating income rose by 7% to ₦24.2bn from ₦22.7bn in Q1 2019; just as Operating expenses rose by a marginal 3% from ₦17.1bn in Q1 2019 to ₦18.0bn.
Profit Before Tax (PBT) for the period grew by 19% to ₦6.2bn from ₦5.2bn in Q1 2019.
Also commenting on the Q1 2020 numbers, Chief Financial Officer, Joe Mbulu said “headline numbers delivered 19% growth in Profit Before Tax to ₦6.2bn compared to ₦5.2bn in Q1 2019. The 18% YoY growth in Non-Interest Income was driven by the stronger trading income of ₦5bn compared to ₦2.2bn in Q1 2019, e-business income of ₦2.1bn compared to ₦1.2bn in Q1 2019 and revaluation gains of ₦2.7bn compared to ₦0.1bn in the same period last year.
“Our operational efficiency also improved with Cost-Income Ratio declining YoY to 74.3% from 76.9% in Q1 2019 as our cost optimization programme continues to yield results. We have also kept Non-Performing Loan ratios flat currently at 5.9% compared to 5.8% as of December 2019.
“While the current COVID-19 pandemic has dimmed the global economic outlook for the year, we will leverage our strong capital position with Capital Adequacy Ratio (CAR) at 19.9% and our solid risk management framework towards the delivery of our 2020 objectives,” he added.