Union Bank of Nigeria Plc posted a profit before tax of N11.7bn for the first half of the year, up from N9.5bn in the same period of 2017.
The bank, which announced its unaudited financial statements for the period ended June 30 2018 on Wednesday, said its gross earnings rose by 16 per cent to N83.3bn from N72.1bn in H1 2017, driven by a 10 per cent increase in interest income and 37 per cent increase in non-interest income.
Its interest income grew to N62.2bn in the first half of 2018 from N56.6bn in H1 2017, while net interest income before impairment was up by 14 per cent to N34.4bn, driven by an improvement in net interest margins from 7.9 per cent to 8.2 per cent on the back of lower cost of funds.
The lender said its non-interest income increased by 37 per cent to N21.1bn from N15.4bn in H1 2017, driven by enhanced treasury trading income, recoveries and 311 per cent growth in alternate channel revenues.
It added that the operating expenses rose by 21 per cent to N39.2bn from N32.4bn in H1 2017, largely due to a 25 per cent increase in regulatory levies from the Nigeria Deposit Insurance Corporation and the Asset Management Corporation of Nigeria as well as some one-off items.
The bank reported gross loans of N508.5bn, down from N560.7bn as of December 2017 due to successful recovery/collection efforts and the write-off of some fully provisioned non-performing loans.
Customer deposits was up by three per cent to N826.7bn from N802.4bn as of December 2017, reflecting a 66 per cent increase in foreign currency deposits and the optimisation of local currency deposit book towards low-cost deposits.
Commenting on the results, the Chief Executive Officer, Union Bank, Emeka Emuwa, said, “In the first half of the year, we have continued to see positive results from our efficiency and productivity drive. Across all our business lines, we witnessed strong underlying performance, translating into improved earnings.
He said in the second half of the year, the group would continue to focus on productivity, leveraging enhanced platform to deliver best-in-class services to its customers and taking advantage of targeted opportunities across business lines and geographies.
Speaking on the H1 2018 numbers, the Chief Financial Officer, Oyinkan Adewale said, “With low-cost deposits now accounting for 70 per cent of total deposits, up from 67 per cent as at December 2017, our cost of funds fell in H1 2018. Consequently, the group NIM has improved from 7.9 per cent in H1 2017 to 8.2 per cent in the period. Our foreign currency deposits are up 66 per cent, compared with December 2017; and up 40 per cent compared with March 2018, as we continued to optimise our balance sheet.”