LAGOS (Sundiata Post) – Union Bank of Nigeria Plc has declared a profit before tax (PBT) of N4.7 billion excluding gain on sale of subsidiaries in its unaudited results for the quarter ended 31st March 2016, according to information available to Sundiata Post.
While its PBT increased by 85% to ₦4.7bn in the first quarter (Q1) of 2016 as against N2.5billion in Q1 2015), the bank’s financial highlights for Q1 2016 reveal that gross earnings is at part with Q! 2015 which is put at ₦26.6billion, excluding gain on sale of subsidiaries. Interest income rose up 5% to ₦21bn (₦20bn in Q1 2015) as a result of improvement in asset yield from 14.36% in Q1 2015 to 15.65% in Q1 2016.
Interest expense went down by 16% to ₦6.6bn (₦7.9bn in Q1 2015) driven by a deliberate effort to manage funding costs, resulting in a reduction in primary cost of funds from 6.07% in Q1 2015 to 4.73% in Q1 2016. Operating expenses increased by 3% to ₦14.2bn (₦13.7bn in Q1 2015) in the wake of budgeted investments in technology and network infrastructure.
Customer deposits went up 9% to ₦587.2bn (₦539.4bn Mar 2015) on the back of growing customer confidence in service and product offers (riding on the back of a re-energised brand identity. Gross loans went up 2% to ₦383.6bn (₦375.6bn Mar 2015), reflecting cautious loan growth in targeted sectors of the economy.
Commenting on the bank’s first quarter results, Emeka Emuwa, Chief Executive Officer said “Our first quarter results reflect steady progress on the execution of our strategic priorities. The bank’s core PBT in Q1 2016 is up significantly by 85% to ₦4.7bn compared to ₦2.5bn in the same quarter last year. With the sale of non-banking subsidiaries near completion, the Bank is now focused on growing and delivering results through its core banking business.
“Our priorities to sustain growth in 2016 remain focused on growing our deposit base and new customer acquisitions, as well as driving gains in transactional income. We will continue leveraging the technology and operational platform we have invested in whilst proactively managing our risks and operational costs.”
Chief Financial Officer of the bank, Oyinkan Adewale said that the bank delivered strong results this first quarter with focus on customer deposit growth which led to 16% interest expense reduction “as we rely more on low cost deposits to fund the bank. This trend is expected to continue and should moderate funding costs and improve net interest margins for 2016.”
“Non-interest revenue continues to grow, driven by securities trading, e-business and other transactional fees. Excluding 2015 one-off gains, we were able to grow core revenues by 9%. Given our continuing investment in technology and network infrastructure, we have seen a slight increase of 3% in operating expenses this quarter compared to Q1 2015. This short term increase is expected to normalise over the course of the year,” he concluded.
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