Finance

Union Bank Plc reports profit before tax of N30.2 billion in 2022.

Union Bank’s Transformation To Titan Trust Bank Inching Closer
  • Net Interest Income rose by 33% to N59.1 billion from N44.3 billion in 2021.
  • Net Operating Income after impairments was up 10% to N110 billion from N99.7 billion in 2021.
  • Operating Expenses marginally grew by 0.4% to N79.4 billion from N79.2 billion in 2021.

Union Bank of Nigeria Plc has released its audited financial statements for the year ended 31st December 2022, revealing strong financial performance despite macroeconomic headwinds.  

The bank’s profit before tax grew by 47% to N30.2 billion as against N20.5 billion posted in 2021.  

Gross earnings went up 19% to N208.2 billion from N175.0 billion posted in 2021, driven by strong growth in Net Interest Income.  

According to the bank in a statement, Net Interest Income rose by 33% to N59.1 billion from N44.3 billion in 2021 driven by growth in earning assets while Net Operating Income after impairments was up 10% to N110 billion from N99.7 billion in 2021.  

This is on the back of increasing inflation which the economy continues to struggle with. The headline inflation rate rose to 22.04% in March, a 0.13% increase from the 21.91% rate recorded in February, according to the latest report published by the Nigerian Bureau of Statistics (NBS) on Friday. 

The report said the increase was buoyed by the jump in prices of food, housing, fuel and gas, among others. The figure shows a consistent increase in the inflation rate for the last two years. 

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On a year-on-year basis, the headline inflation rate was 6.13% points higher compared to the rate recorded in March 2022 which was 15.92%. 

Union Bank noted that Operating Expenses marginally grew by 0.4% to N79.4 billion from N79.2 billion in 2021, reflecting tight cost control despite inflationary pressures.  

See more highlights from the financial report below.

Gross earnings    

  •  2022 FY: N208.2 billion  
  •  2021 FY: N175 billion  
  • Change: +19%  

Net interest income    

  •  2022 FY: N59.1 billion  
  • 2021 FY: N44.3 billion  
  • Change: +33%  

Operating Expenses    

  • 2022 FY:  N79.4 billion  
  • 2021 FY: N79.2 billion  
  • Change: +0.4%  

Pre-tax profit   

  • 2022 FY: N30.2 billion   
  • 2021 FY: N20.5 billion  
  • Change: +47%  

Net Profit after tax  

  • 2022 FY: N29 billion  
  • 2021 FY: N19.2 billion  
  • Change: +51.2%  

What the bank said

Commenting on the results, Mudassir Amray, MD/CEO, said that despite the macroeconomic headwinds of 2022, the bank recorded strong performance across key financial and operational indicators.  

  • “We were focused on our strategy of deepening our core business segments whilst enhancing our digital channels and service propositions to customers. On the back of this, we are increasing our customer acquisition and engagement, translating into higher revenues across our regions. The Bank’s gross earnings grew by 19% to N208.1 billion from N175 billion in 2021.  
  • “Whilst non-interest income declined marginally by 1.0%. Net interest income after impairment grew 26.1% to N55.8 billion from N44.2 billion in 2021 on the back of increasing responsible risk assets. Profit before tax closed at N30.2 billion, representing a growth of 47.1% from N20.5 billion recorded in 2021. In 2023, we will remain focused on executing our strategic initiatives, which are centred on pursuing additional opportunities to diversify our revenue sources while strengthening our core business. We also look forward to completing the merger of Union Bank of Nigeria and Titan Trust Bank, which began in 2022.  
  • “The transition has gone smoothly, and I am confident that the combination will make us more formidable and well-positioned to capitalise on market opportunities. As we progress into 2023, I have no doubts that we will scale through all the macroeconomic pressures and sustain this growth momentum with continued support from the new core investors and board and continued trust from our customers to serve them,” Amray noted.  
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Also speaking on the FY 2022 numbers, Chief Financial Officer Joe Mbulu said the financial performance is a testament to the disciplined execution of the bank’s plans for the year and resilience against all odds. He said:

  • “While pursuing liability generation and responsible risk assets, we maintained operational efficiency, managing cost drivers and avoiding wastage. Operating expenses increased marginally by 0.43% due to increased non-discretionary regulatory costs. Our cost-to-income ratio dropped to 72.5% from 79.4% in 2021 due to cost-control measures implemented during the year. The Bank’s balance sheet remains strong, with total assets increasing by 8.8% to N2.79 trillion due to growing loans and advances to customers. We expanded our net loan book by 11.5% from N868.8 billion in 2021 to N968.9 billion in 2022. In addition, customer deposits increased by 8.8% to N 1.48 trillion. While we seek to grow our risk assets, maintaining quality assets remains a key priority. As a result, our NPL ratio reduced from 4.3% to 4.0%, and the capital adequacy ratio remained within regulatory limits at 14.4%.”

Source: Nairametrics

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