Union Bank of Nigeria has reported a strong financial performance for the first half of 2024, with a 20% increase in profit before tax (PBT), amounting to N79.8 billion, compared to N66.5 billion in the corresponding period of 2023. This impressive result comes despite the challenging economic environment following the Central Bank of Nigeria’s (CBN) intervention in January 2024, which sparked widespread customer concerns.
The bank also recorded a significant 58% growth in gross earnings, rising to N333 billion from N210.5 billion in H1 2023. Union Bank attributed this growth to a strategic focus on stability, digital innovation, and a robust operational framework.
Commenting on the financial results, Yetunde B. Oni, Managing Director and Chief Executive Officer of Union Bank, expressed satisfaction with the bank’s performance. “I am pleased that Union Bank of Nigeria has delivered a progressive financial performance in the first half of the year, with a significant boost in Net Interest Income, Net Operating Income, and Net Trading Income,” Oni said. She highlighted the bank’s efforts to maintain momentum and stability following the CBN’s intervention, emphasizing a focus on digital expansion, optimizing the wholesale bank structure, and enhancing recoveries of past-due obligations.
Union Bank’s digital lending platform, UnionKash, launched in the first quarter of 2024, has already seen over 14,000 customers accessing loans through the platform’s USSD code *826*41#. This initiative is part of the bank’s broader strategy to scale its digital offerings and drive growth in targeted sectors.
Despite the challenging operating environment, which included inflationary pressures, exchange rate volatility, and increased operational costs, the bank managed to grow its net operating income after impairments by 32% to N143.6 billion from N108.5 billion in H1 2023. However, non-interest income saw a slight decline of 3% to N108.3 billion, primarily due to foreign exchange revaluation losses.
Operating expenses rose by 52% to N63.8 billion from N42 billion in the previous year, driven by inflation, increased power costs, and higher non-discretionary regulatory expenses. Nevertheless, Union Bank maintained a cost-to-income ratio of 44%, up from 39% in H1 2023, underscoring the effectiveness of its cost-efficiency initiatives.
The bank’s gross loans grew by 24% to N1.93 trillion from N1.55 trillion in December 2023, while customer deposits increased marginally by 1% to N2.36 trillion from N2.34 trillion, reflecting the impact of socio-economic pressures on its operations.
Oluwagbenga Adeoye, Acting Chief Financial Officer, highlighted the resilience of the bank’s performance amidst these challenges. He noted that Union Bank remains focused on improving efficiency and driving non-interest income in the second half of the year, with the goal of sustaining strong returns on equity and assets.
As part of its long-term strategy, Union Bank has initiated a recapitalization process in line with the CBN’s Banking Sector Recapitalisation Program, which mandates banks to increase their minimum paid-in common equity capital by April 2026. This move is aimed at enhancing the bank’s financial stability and positioning it to take advantage of emerging market opportunities.
Union Bank, established in 1917 and listed on the Nigerian Stock Exchange in 1971, remains one of Nigeria’s most respected financial institutions, offering a wide range of services to both individual and corporate clients across its extensive network of over 300 branches nationwide.