By Peter OBIORA InvestAdvocate
Lagos (INVESTADVOCATE)- Union Bank of Nigeria Plc (UBN) on Wednesday said its 2014 pretax profit for the twelve month period ended December 31, 2014 climbed up 406.1 percent to N26.9 billion from N5.32 billion recorded a year earlier.
Similarly, profit after tax (PAT) increased 324.2 percent to N26.5 billion from N6.26 billion reported in the same period of 2013.
Gross earnings grew from N121.39 billion to N135.89 billion in the review period of 2014; indicating a growth of 11.9 percent, the lender said in a filing with the Nigerian Stock Exchange (NSE).
Emeka Emuwa, managing director/CEO of the bank commenting on the result said: “2014 was focused on implementing the foundational pillars of our transformation strategy with a vision to rebuild Union Bank into a highly respected provider of financial services in Nigeria. We optimised our talent base, making significant hires into key roles and ensuring we have the right people in the right functions, and aligned our staff compensation and overall costs to be competitive within the industry.”
Emuwa affirmed that the lender also overhauled operations and processes in order to consistently deliver quality service to its customers, and established a Central Processing Center to provide streamlined, cost efficient, and consistent processing of branch operations.
“Notwithstanding the significant investments in these initiatives, we stabilised our cost line and kept expenses flat. The Bank also recorded significant growth in net operating income, and the disposal of five of our non-banking subsidiaries, in compliance with CBN’s Regulation 3 requirement, added a substantial boost to our bottom line in 2014,” the Union Bank CEO added.
According to him, going into 2015, key financial indicators for the bank have been normalised and growth trajectory remains positive. “As we continue to execute strategic transformation initiatives, we expect to see continued improvement in both our financial and operational performance as we roll out a new core banking platform which will markedly transform our customer service and product delivery capabilities,” Emuwa concluded.
“Having substantially cleaned up our loan book in 2013, we were able to reduce net impairment charge by 75% and improve NPL ratio from 6% in 2013 to 5.1% in 2014. We have better leveraged our capital base, with a 44% growth in the loan book, and growth in loan to deposit ratio from 48% in December 2013 to 64% at the end of 2014,” Oyinkan Adewale, chief financial officer (CFO) of the bank affirmed.
She further affirmed that while undergoing significant spending on the bank’s transformation initiatives, it has kept operating expenses (net of restructuring costs) flat.
“We are on course to drive down our cost to income ratio towards our target of 60 percent, with 68 percent in 2014, down from 74 percent in 2013.
In line with our strategy of refocusing the bank on its core activities of commercial and retail banking, we continued the disposal of non-core subsidiaries, recording net disposal profits of N6.3 billion in 2014,” Adewale noted.
At the close of business on the Nigerian bourse, share price of Union Bank increased 6.93 percent to N10.80 from N10.10 traded the previous session gaining 0.10 kobo.
