The customer deposits of Union Bank of Nigeria Plc rose to N1.131 trillion from N886.3 billion, representing a growth of 27.1 percent, according to its 2020 Audited report.
The bank’s digital adoption also appreciated by 38 percent year on year, with UnionMobile channel with total active users now at 2.9 million.
These figures are contained in the Union bank’s financial statements for the year ended 31st December 2020.
The bank’s results for the period show sustained growth in key income lines and significantly improved fundamentals, notwithstanding a constrained 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 to transition to remote working while maintaining the productivity required to deliver this strong set of results in 2020.
Speaking on the results, Emeka Emuwa, CEO said: “The Bank has delivered a strong set of results notwithstanding the impact of COVID-19 on our operations and the wider economy, enabling the Board of Directors to continue to return value to shareholders with a proposed dividend payment for the second year in a row.
This demonstrates the strong foundations we have built, as we continue to deliver against our target of becoming a leading financial institution in Nigeria.
“For the full year, we grew across key income lines. Net income after impairments grew 8.3 percent from N95.5bn to N103.4bn and translated into 2.8 percent growth in Profit Before Tax to N25.4bn from N24.7bn.
The core of this performance is driven by the growth in our loan book, with 23.8 percent increase in gross loans, to N736.7bn from N595.3bn in 2019.
“The pandemic accelerated trends in customer behaviour and we have seen rapid increase in digital adoption with a 38 percent YOY increase in active users on our UnionMobile channel with total active users now at 2.9 million.
Our UnionOne and Union360 platforms for businesses grew by 11 percent from 25,000 users to 27,700 users. 94 percent of transactions in the Bank are now done digitally, up from 89 percent in 2019.
“We also aggressively grew UnionDirect (our agent network) by 6 times from 3,100 to 18,100 in line with our focus on our retail business.
With our investments yielding positive results, we are well-positioned as a strong leader in the retail and digital space.”
He added that in 2021, the Bank will focus on enhancing revenues and shareholder value by revving up customer acquisition, engagement and transactions through seamless customer journeys and an optimized service delivery platform.
” As I retire following eight years of rebuilding and repositioning this storied institution, I am convinced that with the excellent management team and a clear strategy in place, Union Bank is well positioned to continue to compete and deliver value to its shareholders.
Also Speaking on the FY 2020 numbers, Chief Financial Officer, Joe Mbulu said: “We are pleased with both our top and bottom-line performance in 2020, in light of the impact of the pandemic and economic challenges.
Significant inflationary pressures and the translation of currency depreciation drove growth in our cost base, however we maintained strong control, limiting operating expense increase to 10 percent (N77.9bn from N70.8bn), well below the rate of inflation. Consequently, we saw marginal increase in our cost to income ratio to 75.4 percent from 74.1 percent.
“Our customer deposits hit a milestone during the year, crossing the N1tr mark to N1.131 trillion from N886.3bn in FY 2019, an increase of 27.1 percent . Low cost deposits were up by 17 percent, constituting 68 percent of total deposits helping to push cost of funds down by 1.4 percent
“We continued to proactively manage our growing risk asset portfolio and recorded better asset quality, with our NPL ratio improving from 5.8 percent to 4.0 percent . This achievement, combined with a solid capital adequacy at 17.5 percent and continued top-line growth, provides the platform for strong growth going forward.
“We will continue to grow our loan portfolio in 2021, which we expect to be a significant driver of growth, combined with our value chain synergies across our business which will drive customer and transaction growth during the year and beyond.
” Our UBUK subsidiary remains classified as “Available for Sale” as the sale process continues albeit delayed due to the pandemic-induced lockdowns,” he added.
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