Union Bank of Nigeria (UBN) Plc recorded modest growth in the top-line in 2021, showing steady revenue growth and strong business momentum driven by non-interest income.
Key extracts of the audited report and accounts of UBN for the year ended December 31, 2021 released yesterday at the Nigerian Exchange (NGX) showed that the bank continued grow its top-line despite macroeconomic headwinds.
Gross earnings rose by 8.9 per cent to N175 billion in 2021 as against N160.7 billion recorded in 2020. The top-line growth was driven by strong non-interest income, which rose by 26.7 per cent from N44 billion in 2020 to N55.7 billion in 2021. The growth in non-interest income was also driven by significant increases in debt recoveries. Net operating income after impairments slipped by 3.6 per cent to N99.7 billion as against N103.4 billion. Profit before tax followed the downtrend with a drop of 19.3 per cent from N25.4 billion in 2020 to N20.5 billion in 2021.
Further analysis showed that operating expenses grew marginally by 1.5 per cent to N79.1 billion in 2021 as against N78 billion in 2020, reflecting tight cost control despite inflationary pressures. Gross loans rose by 22 per cent to N899.1 billion in 2021 as against N736.7 billion in 2020, underlining the expansion of lending to key economic sectors of opportunity. Customer deposits also grew by 20.4 per cent from N1.1 trillion to N1.4 trillion, reflecting the improvement in the bank’s product base and digital channels.
Chief Executive Officer, Union Bank of Nigeria (UBN) Plc, Emeka Okonkwo said the bank has sustained steady performance as a result of increased customer engagement from an enhanced operating and go-to-market model and gains derived from its digital penetration strategy.
According to him, following an enhancement to its operating and go-to-market model to deliver better performance and efficiency leveraging network across the regions, the bank is increasing its customer engagement and product penetration which is translating into higher customer revenues across geographies.
He said the bank has continued to record headline growth by diversifying its income streams and accelerating its recoveries programme.
He outlined that the bank continued its strong growth in non-interest income through a combination of aggressive recoveries, which grew 119 per cent in the period, from N7.2 billion to N15.9 billion and further growth in fee and commission income by 33 per cent and e-business by 26 per cent.
He noted that the growths were delivered on the back of sustained multi-channel growth in users, volume and value across the bank’s digital and agent channels. Total active UnionMobile users now stands at 3.3 million, up 20 per cent while Union360 customer base grew by 22 per cent to 26,400.
“In 2022, the bank will continue to focus on broadening and deepening the strong foundations we have built, while enhancing our digital delivery platforms and service propositions to customers. We remain deeply thankful to our erstwhile core investors, Union Global Partners and Atlas Mara who have been instrumental to our journey since 2012. Their invaluable support and expertise helped steer the Bank through turbulent waters and into an era of growth and stability.
“As we turn a new chapter for our Bank with a new core investor expected to come on board, we are proud of the solid foundation built over the last ten years and look forward to a seamless transition and continued successes in the future, “ Okonkwo said.
Management report indicated that active users across mobile and digital platforms grew by 23 per cent as the bank delivered a range of upgrades across its channels including account opening and account blocking as well as features like QR payments and HMO payments.
In retail and digital offerings the bank’s expanded retail and digital portfolio enabled growth across its business segments with the retail deposit and loan books growing by 10 per cent respectively while SME loan book grew by 233 per cent, a trend expected to continue across all business segments.
“We introduced new group loans and asset financing solutions for small businesses making it easier for collectives to access credit and simplified loan products and payment solutions for retail customers.
“ We launched the ‘’Save & Win Palli Promo,” a nationwide campaign to generate low cost deposits while rewarding new and existing customers for higher savings as well as deposits in current accounts. The success of the promo was key to the 20 per cent incremental growth in customer deposits in 2021.