By Yakubu LAAH InvestAdvocate
Lagos ( INVESTADVOCATE)- Union Bank of Nigeria Plc (UBN) Wednesday said its profit for the year ended December 31, 2013 climbed 223 percent (223%) from N1.187 billion in 2012 to N3.836 billion in 2013.
Similarly, pretax profit grew 31.2% from N2.872 billion in 2012 end to N3.769 billion in the review period of 2013.
However, gross earnings increased slightly 3.6% from N117.2 billion in 2012 to N121.3 billion in 2013.
The bank in a statement made available to InvestAdvocate quoted Emeka Emuwa, its group managing director/chief executive officer (GMD/CEO) as saying that, “in 2013 we focused on two key priorities – first, immediately improving the bank’s operations by addressing critical challenges in service delivery to our clients; and second, developing a roadmap to establish Union Bank firmly as a leading player within the Nigerian banking industry. We are pleased to have a clearly defined strategy to guide our growth over the next five years.”
“To realise our first priority of immediate improvements, as well as implement the foundation of our strategy, we pushed forward on a number of critical internal and external restructuring initiatives, in respect of which we charged approximately N11 billion. I am pleased to report that, notwithstanding these significant exceptional costs, Union Bank remained profitable. This signals to us that our transformation programme put the bank on the right trajectory,” Emuwa said.
On her part, Oyinkan Adewale, executive director and chief financial officer (ED/CFO) of Union Bank said in 2013, the bank focused on improving its efficiency. ‘’ We identified key areas where we could rationalise and optimise cost and we launched several initiatives. In the coming years, we expect these initiatives to translate into significant gains for the bank,’’ Adewale said.
In addition, by divesting profitably from our non-bank subsidiaries, we will significantly improve the Bank’s capital adequacy ratio and the Group’s risk profile, while focusing on our core banking business. Having cleaned up the legacy risk assets portfolio, we expect significantly reduced impairment going forward,” she affirmed.
Emuwa while speaking on the outlook of the bank said looking ahead to 2014; its focus will be on executing key elements of the bank’s strategy which they believe will yield immediate results. ‘’We are repositioning our business to reflect a more balanced retail, commercial and corporate banking model with a view to making significant contributions to financial inclusion in Nigeria. We have begun our Branch Optimisation work and expect that by the end of 2014, more than 60 branches, in prioritised locations, will be either re-fit, relocated or upgraded to serve our customers adequately in those areas,’’ he said.
The Union Bank chief said as the bank looks to expand its customer base; it will continue to roll out its bank of the future branches, which will rely on technology and innovation to simplify the banking experience for its customers. ‘’We plan to double our ATM footprint and enhance our mobile banking platforms, while significantly upgrading our use of technology to enhance our customer experience at all touch points,” Emuwa said.
“Our brand is a critical pillar of our strategy going forward, and we have commenced work to update the brand identity and reposition the bank’s image to compete in today’s market and for the future,” he said.
“Finally and as previously indicated, we are on track with the divestment of our investment, associate and subsidiary companies (“Portfolio Companies”). We plan to divest of the entire bank’s portfolio companies, retaining only our investment in Union Bank (UK) Plc.
The conclusion of the divestments will bring us into compliance with the Central Bank of Nigeria’s the Regulation on the Scope of Banking Activities & Ancillary Matters, No. 3, 2010 and is in line with the Bank’s strategic focus on its core commercial banking business.
As at today, preferred bidders have been identified for the acquisition of Union Bank’s interests in Union Homes Savings and Loans, Union Registrars Limited, Union Assurance Company Limited and Union Capital Markets Limited. It is expected that these transactions will be concluded after the requisite regulatory approvals have been received,” the Union Bank chief affirmed.
The bank as at December 31, 2013 was in the process of divesting its investments in its non-bank subsidiaries. It said the implication of this in its group 2013 financial statements, is that 2013 balance sheet figures of these subsidiaries have not been consolidated line by line in the 2013 group balance sheet; 2012 balance sheet numbers of these subsidiaries are reflected line by line in the 2012 group numbers.
While its 2013 and 2012 income statement, figures of the subsidiaries have not been consolidated line by line in the 2013 and 2012 group income statement; but have been brought into the accounts as discontinuing operations.
