Union Bank pays first dividend in 11 years

0 331

Union Bank of Nigeria (UBN) Plc on Thursday announced a dividend recommendation of about N7.3 billion for the 2019 business year, its first dividend payment in 11 years. Shareholders will receive a dividend per share of 25 kobo.

The dividend was a major highlight of considerable improvements in the commercial bank’s top-line and bottom-line. Key extracts of the audited report  and accounts of UBN for the year ended December 31, 2019 released yesterday at the Nigerian Stock Exchange (NSE) indicated that gross earnings grew by 14 per cent from N140.1 billion in 2018 to N159.9 billion in 2019. Interest income had grown by 11 per cent from N104.8 billion to N116.5 billion. Non-interest income also rose by 23 per cent from N35.3 billion to N43.3 billion.

The report further showed that operating expenses declined marginally from N71 billion to N70.8 billion. Net operating income increased from N89.7 billion to N95.5 billion. Profit before tax grew by 33 per cent from N18.7 billion to N24.7 billion. Profit after tax also rose by 32 per cent from N18.4 billion to N24.4 billion.

The balance sheet also emerged stronger. Gross loans rose by 20 per cent from N496.8 billion in 2018 to N595.3 billion. Customer deposits increased by 5.0 per cent to N886.3 billion in 2019 as against N844.4 billion in 2018.

Chief Executive Officer, Union Bank of Nigeria (UBN) Plc, Mr. Emeka Emuwa, said the bank’s strong overall performance has paved the way for a critical milestone with the declaration of its first dividend in more than a decade.

He noted that the returning value to shareholders has been at the core of Union Bank’s transformation and continuous drive to become a leading financial institution in Nigeria.

He pointed out that the 2019 performance reflected strong growth in the bank’s underlying business operations and enhanced profitability while it also demonstrated the impact of some of the key operational and cost saving initiatives that have been implemented to accelerate growth and profitability.

He explained that the important part of the bank’s earnings has been the conscientious growth of its loan book noting that the bank booked N98 billion in new loan assets in the course of the year reflecting a 20 per cent growth to close at N595.3 billion in gross loans.

He outlined that in line with the bank’s vision to be Nigeria’s most reliable and trusted banking partner, it is optimising its business model to focus solely on Nigeria where it continues to invest and thrive. As such, the bank has made the strategic decision to divest from its UK subsidiary, Union Bank UK which will enable it focus on the distinct long-term opportunities in the Nigerian market. The divestment is expected to conclude in 2020 subject to regulatory approvals in Nigeria and the UK.

“In 2020, we will continue to focus on bottom-line initiatives that will build on our success in 2019. We are promoting synergy across our businesses and functions to ensure alignment with and on our strategic objectives,” Emuwa said.

Chief Financial Officer, Union Bank of Nigeria (UBN) Plc, Joe Mbulu said the group numbers reflected the classification of its UK subsidiary as a discontinued operation in line with IFRS 5, which is reflected in both 2018 and 2019 numbers.

“We are proud of the top-line and bottom-line numbers the bank delivered in 2019, owing largely to operational efficiencies and a laser focus on key deliverables. Through our LEAP initiative, our focus on discretionary cost discipline led to a reduction of N2.4 billion on related cost lines driving overall expenses down. Consequently, our cost-income ratio declined to 74.1 per cent from 79.2 per cent in 2018. Our total customer deposits grew by 5.9 per cent to N886.3 billion from N844.4 billion as at December 2018 with low-cost deposits up by 7.7 per cent and now accounting for 74 per cent of total customer deposits compared to 71 per cent in 2018,” Mbulu said.

Leave A Reply