Union Bank of Nigeria Plc on Friday announced a 2.8 percent rise in it profit before tax earning for 2020 financial year, from N24.7billion in 2019 to N25.4billion.
Highlights of financial performance for the year contained in its audited financial statements for the year ended December 31, 2020 filed with the Nigerian Stock Exchange (NSE) however showed gross earnings was down by 1.9 percent, from N159.9billion in 2019 to N156.9billion.
Also, the statement showed net operating income after deductions for impairments rose by 8.3 percent, from N95.5billion in the previous year to N103.4billion, while net interest income before impairment was up 10.1 percent to N56.9billion, from N51.7billion in 2019.
The Bank said the results for the period showed sustained growth in key income lines and significant improvement in fundamentals, despite the constraints in the operating environment largely due to the impact of the COVID-19 pandemic.
“Union Bank’s investments in technology and building a progressive work culture over the past eight years, enabled a swift response to the pandemic that allowed our workforce transition to remote working while maintaining the productivity required to deliver these strong set of results in 2020,” the Bank said.
The Bank said non-interest income for the year grew by about 1.6 percent from N43.3billion to N44billion, driven by growth in net trading income as well as revaluation gains.
As a result of an increase in regulatory and technology expenses, the Bank said its operating expenses increased by about 10 percent from N70.8billion in 2019 to N78billion, with gross loans exposure rising by 23.8 percent N595.3billion in 2019 to N736.7billion, driven by targeted lending to key sectors of the economy.
Besides, details of the statement showed that customer deposits was up by 27.6 percent from N886.3billion in 2019 to N1.13trillion.
The Bank attributed the rising level of customer deposits to its processes designed to help deliver a wide range of financial products to customers during the pandemic and increased deployment of digital channels.
Due to improved strategy in managing its loan portfolios driven by a disciplined recoveries strategy and key restructurings to support customers during the pandemic, the Bank said it was able to reduce its non-performing loans ratio to about 4 percent, from 5.8 percent in 2019, about N7.2billion in 2020
Apart from its active users channels growing by 1.3tines during the year, the Bank said it added new features such as end-to-end account opening and enhanced card services, including home delivery of cards boosting revenues from digital platforms increasing by one and a half times
Agent Network Expansion expanded the Bnak’s UnionDirect network to over 18,000, representing an increase by six times, with transaction volume and value growing by 10 and 12 times respectively, delivering 14 times revenue growth.
Enhanced Retail and Digital Offerings relaunched UnionVibe, UnionLegend and
UnionInfinity, a suite of products targeting the key youth and teen demographic; helping to disburse over N9.4billion loans with new credit propositions.
During the year, the Bank said it carried out systems upgrades on its core systems to support its growth aspirations, while strengthening the performance, reliability, security and processing capacity of its platforms.
With the upgrade, the Bank said it was positioned to process at least 10 times the volume of transactions for 2020.
On Funding, the Bank said it was able to secure both local and foreign currency funding to support growth across priority areas.
Apart from raising ₦35billion through commercial paper issuance, the Bank said it got $200million 10-year funding from U.S International Development Finance
Corporation (DFC) and another $75million Pandemic Trade Mitigation funding from AFREXIM Bank and $30million as working capital funding from the International Finance Corporation (IFC).
In response to the impact of COVID-19, the Bank said it constituted a CEO-led task force in February and adopted a proactive approach to ensure the health and safety of key stakeholders and to mitigate negative impact on our business.
Despite the difficulties, the Bank declared 25 kobo dividend per 50 kobo share to it customers.