Union Bank Posts Unaudited Q3 Results

Union Bank's Gross Earnings Hits N208.2bn

Union Bank, one of Nigeria’s long-standing and most respected financial institutions, has announced its unaudited results for the nine months ended 30th September 2016.

According to the bank’s financial highlights, Profit before tax is ₦13.2bn (₦13.2bn in 9M 2015); excluding gain on sale of subsidiaries*, increased by 27% to ₦12.4bn (₦9.8bn in 9M 2015).

The report revealed Gross earnings as up by 7% to ₦91.4bn (₦85.4bn in 9M 2015); excluding gain on sale of subsidiaries*, increased by 11% to ₦90.6bn (₦82.0bn in 9M 2015).

Also, Interest income is up by 6% to ₦69.2bn (₦65.3bn in 9M 2015) driven by improved asset yields from 14.2% in 9M 2015 to 16.1% in 9M 2016.

Interest expense went down by 14% to ₦22.8bn (₦26.5bn in 9M 2015) driven by lower funding costs. Primary cost of funds declined to 5.27% in 9M 2016 from 6.58% in 9M 2015.

Commenting on the Bank’s results for the nine month period, Chief Executive Officer, Emeka Emuwa said: “Our core pre-tax profits are up 27% to ₦12.4bn from N9.8bn during the same period in 2015, fuelled largely by interest income and our thriving retail business. We are encouraged by this performance which comes in the face of a recessionary environment, increased impairments and headwinds in our trade business due to scarcity of foreign exchange.


“Our steady effort to build a low cost, customer centric retail business over the past 18 months is demonstrating results and continues to win us a new, growing retail customer base, as well as industry recognition with our recent Business Day Award for the Most Improved Retail Bank in Nigeria.”


“While the operating environment remains a challenge, we will continue to focus on executing our strategy, defending our loan book and adhering to prudent risk management principles,” he stated.


Speaking further on the Bank’s numbers, Chief Financial Officer, Oyinkan Adewale said:Our revenues are up across board and the Bank’s asset yields improved from 14.2 to 16.1% when compared to same period in 2015. Our non-interest revenue is up 27%, excluding one-time gains, on the back of treasury and channel banking revenues in the retail business.

We continue to manage our cost of funds, resulting in 14% reduction in interest expenses year-on-year, notwithstanding a 9% growth in customer deposits and 25% increase in medium term borrowings.

Our cost optimisation initiatives continue to yield good results; cost-to-income ratio has improved to 62% from 70% in the previous year. Cost-to-income is buoyed by income and operating expenses in line with expectations in spite of inflationary and devaluation pressures. We will continue to implement our cost discipline initiatives across the Bank to stay within our cost targets,” the CFO concluded.

Other details from the results shows:

Net revenue before impairment: up 20% to ₦46.4bn (₦38.8bn in 9M 2015) as a result of 6% interest income growth and 14% interest expense growth. Our Net interest margin grew from 8.76% to 9.97%

Impairment: up ₦8.4bn to ₦12.8bn (₦4.4bn in 9M 2015) with NPL Ratio increasing to

9.4% (7.0% in Dec 2015).

Non-interest revenue: up 10% to ₦22.1bn (₦20.1bn in 9M 2015); excluding gain on sale of subsidiaries*, revenues are up 28% to ₦21.4bn (₦16.7bn in 9M 2015) led by revaluation gains and e-business fees.

Operating expenses: at ₦42.7bn (₦41.3bn in 9M 2015) in spite of current inflationary pressures and consistent with investments in technology and network infrastructure.

Gross loans: up 39% to ₦515.4bn (₦370.9.0bn in Dec 2015); driven by 13% local currency loan growth and 26% impact of the revaluation of foreign currency loans.

Customer deposits: up 9% to ₦618.30bn (₦569.1bn in Dec 2015); customer deposits continue to grow led by our financial inclusion initiatives, enhanced customer experience and new/improved product offerings.


Bank Nine Months 2016 Financial Summary


Balance Sheet (in billions of Naira)

Total Assets

Sep 2016


Dec 2015




Gross Loans & Advances515.4370.939%
Customer Deposits618.3569.19%
Shareholders’ Funds236.7230.73%
Coverage Ratio (incl. regulatory risk reserves)136%177%(41%)
Liquidity Ratio (regulatory minimum – 30%)42%43%(1%)
Loan to Deposit Ratio83%65%18%
Non-Performing Loan Ratio9.4%7.0%2.4%



Income Statement (in billions of Naira)

Gross Earnings

9M 2016


9M 2015




Gross Earnings**90.682.011%
Net Interest Income46.438.820%
Non-Interest Income22.120.110%
Non-Interest Income**21.416.728%
Gain on sale of subsidiaries0.83.4(76%)
Credit Impairment12.84.4>100%
Operating Expenses42.741.33%
Profit Before Tax13.213.20%
Profit Before Tax**12.49.827%
Profit After Tax13.113.10%
Profit After Tax**12.39.727%




Net Interest Margin10.0%8.8%1.24%
Cost to Income Ratio62%70%(8%)
Return on Equity7.5%8.2%(0.7%)
Return on Equity**7.0%6.1%0.9%
Return on Assets1.7%1.8%(0.1%)
Return on Assets**1.6%1.5%0.1%
Net Asset Value per share

Earnings Per Share






Earnings Per Share**73k57k16k



Group Nine Months 2016 Financial Summary


Balance Sheet (in billions of Naira)                       Sep 2016          Dec. 2015      Change

Total Assets1,219.61,046.917%
Gross Loans & Advances534.4388.837%
Customer Deposits631.9570.611%
Shareholders’ Funds253.1238.66%
Coverage Ratio (incl. regulatory risk reserves)136%177%(41%)
Loan to Deposit Ratio85%68%17%
Non-Performing Loan Ratio9.0%6.7%2.3%


Income Statement (in billions of Naira)

Gross Earnings

9M 2016


9M 2015




Gross Earnings**93.184.211%
Net Interest Income48.140.319%
Non-Interest Income22.516.735%
Non-Interest Income**22.217.229%
Gain/(loss) on sale of subsidiaries0.3(0.5)>100%
Credit Impairment12.94.5>100%
Operating Expenses44.643.04%
Profit Before Tax13.39.639%
Profit Before Tax**13.010.129%
Profit After Tax13.09.339%
Profit After Tax**12.79.829%
Net Interest Margin8.8%8.1%0.7%
Cost to Income Ratio63%76%(13%)
Return on Equity6.9%5.5%1.4%
Return on Assets1.6%1.2%0.4%
Net Asset Value per share₦14.95₦13.77₦1.18
Earnings Per Share76k55k21k
Earnings Per Share**74k58k16k

*Gain on sale of subsidiaries represents one-time gains realised on the sale of the bank’s subsidiaries in compliance with the Central Bank of Nigeria’s Regulation 3

**Excludes gain on sale of subsidiaries



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