Union Bank of Nigeria post 54.1% growth in Profit after tax in 2022

Union Bank of Nigeria Plc (NGX: UBN) has announced a double digit growth in profit for the 2022 financial year ended 31st December, 2022.

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A review of the group audited financials statements for the year shows that UBN reported a profit after tax of N39.2bn, a 54.1% increase on the N16.9bn reported in 2021.

The Directors of the bank have not proposed any dividend for the 2022 financial year. No dividend was proposed or paid for the 2021 financial year as well.

Review of the Financial Statements

Income Statement:

Gross Earnings: The bank’s gross earnings grew by 18.0%, from N177.3bn to N209.10bn. The bulk of the banks earnings came from Interest income, which accounted for N147.71bn (2021: N114.04bn), while non-interest income contributed N61.40bn (2021: N61.20bn). Interest income came mostly from loans and advances to customers (N110.74bn), investment securities (N20.80bn) and cash and cash equivalents (N16.16bn).
Fee and commission income dropped marginally from N18.93bn to N18.13bn. The biggest component of this income came from E-business fee income (N7.97bn, which was a drop from N8.87bn earned in 2021) and credit-related fees and commission income which was N3.18bn (2021: N5.01bn). UBN earned N2.84bn on account maintenance, marginally higher than N2.40bn earned in 2021.
Net trading and foreign exchange income: The bank earned N23.57bn as net trading income (2021: N8.62bn). The jump in this income was as a result of the N22.65bn booked under net fair value losses on financial assets held for trading (2021: minus N1.05bn). UBN booked a loss of N1.79bn on disposal of fixed securities, it earned N3.84bn in 2021 doing the same. In 2021, UBN earned N5.83bn from foreign exchange gain in trading, while it earned N2.71bn in 2022.
Personal expenses dropped to N26.72 billion from N30.89 billion spent in 2021. Most of the expenses was spent on wages and salaries; N26.57bn (2021: N30.03bn).
Other operating expenses dropped from N40.32bn in 2021 to N45.43bn in 2022.
Profit Before Income Tax: N40.8 billion, compared to N18.2 billion in 2021.
Profit After Tax: N39.2 billion, compared to N16.9 billion in 2021.
Earnings Per Share: N1.00, compared to N0.65 in 2021.

Balance Sheet:

Total Assets: N2.79 trillion, compared to N2.59 trillion as at 31st December 2022. Loans and advances to customer of N968.88bn (2021: N868bn) was the highest component of the group’s asset, followed by Investment securities of N535.10bn (2021: N387.50bn) was the second highest component of the assets. Cash and cash equivalents of N365.40bn were reported on the books of the banking group.
Total Liabilities: N2.49 trillion, compared to N2.32 trillion as at 31st December 2021. Deposits from customers accounted for most of the liabilities with N1.47 trillion.
Shareholders’ Fund: stood at N297.02 billion, compared to N266.86 billion as at 31st December 2021.
Retained earnings: N44.26 billion, against N13.72bn as at 31st Dec. 2021.

Cashflow:

Operating activities: net cash of N69.32bn was generated from operating activities, against N250.08bn generated in preceding period.
Investing activities: net cash of N130.53 billion was used in investing activities, against N47.33 billion used in preceding period.
Financing activities: net cash of N30.27 billion was used in financing activities, against N25.86 billion used in preceding period.
Cash and cash equivalents at the end of the period was N365.44 billion.

About the Company

Union Bank was established in 1917 and is one of Nigeria’s longest-standing and most respected financial institutions. We offer a portfolio of banking services to individual, SME, public, commercial, and corporate clients, and our vision is to be Nigeria’s most reliable and trusted partner.

Our offerings include savings and deposit account services, funds transfer, foreign currency domiciliation, loans, overdrafts, equipment leasing and trade finance. These services are provided through our digital channels, including online banking, mobile banking, debit cards and point-of-sale terminals, and an extensive network of over 281 sales and service centres and 823 automated teller machines spread across Nigeria.

Following receipt of all regulatory approvals in June 2022, a consortium of the majority shareholders of Union Bank led by Atlas Mara Limited divested their stake (an aggregate of 93.42% of the issued share capital of Union Bank) to Titan Trust Bank (TTB). TTB is majority owned by TGI Group, a Nigerian conglomerate.