LAGOS, NIGERIA – March 5, 2020 - Union Bank, one of Nigeria’s longest standing and most respected financial institutions, announces its audited financial statements for the year ended 31st December 2019 which reflect strong growth in the Bank’s underlying business operations and enhanced profitability. The performance also demonstrates the impact of some of the key operational and cost saving initiatives that have been implemented to accelerate growth and profitability.

Bank Financial Highlights:
• Profit before tax: up 33% to ₦24.7bn (₦18.7bn in FY 2018)
• Gross earnings: grew 14% to ₦159.9bn (₦140.1bn in FY 2018), driven by an increase in earning assets
• Interest income: up 11% to ₦116.5bn (₦104.8bn in FY 2018)
• Net interest income before impairment: up 1% to ₦51.7bn (₦50.9bn in FY 2018)
• Non-interest income: up 23% to ₦43.3bn (₦35.3bn in FY 2018); driven by growth in fees and commission income as well as recoveries
• Net operating income: up 6% to ₦95.5bn (₦89.7bn in FY 2018)
• Operating expenses: down 0.4% at ₦70.8bn (₦71bn in FY 2018); driven by our cost optimization programme
• Gross loans: up 20% to ₦595.3bn (₦496.8bn in December 2018) in line with our drive to create quality risk assets across key economic segments of opportunity
• Customer deposits: up 5% to ₦886.3bn (₦844.4bn in December 2018); reflecting the strength of the brand in a very competitive environment for deposits

Key Operational Highlights:
Profitability
• Steady focus on bottom-line initiatives including recoveries, lending and cost discipline delivered significant results across key income lines boosting PBT by 33%, notwithstanding a tough operating environment.
• Subject to shareholders’ approval, a dividend of 25 kobo per 50 kobo share is being proposed.
Operations, Product & Service Innovation
• Long Term Efficiency Acceleration (LEAP) Programme: Project LEAP was introduced in March 2019 to drive cost optimization and ensure optimal operational efficiency. The programme saved the Bank N2.4bn in recurring expenses helping drive overall cost down notwithstanding double-digit inflation and an increase in non-discretionary cost. This program continues in 2020.
• Digitization: We expanded our Robotic Process Automation (RPA) to include reconciliations, refunds and term deposit booking. In addition, we launched our digital loan offering in April 2019 enabling customers accept pre-approved loans via our mobile app.
• Channels: Active users on our enhanced mobile and online banking platforms are up by 60% and 42% - 2.1 million and 1.3 million users respectively. Coupled with increasing efficiency and growth of our traditional channels (e.g. ATM, POS), our e-business income grew by 64% to ₦7.7bn in 2019 from ₦4.7bn in 2018.
• Lekki Flagship Branch: A state of the art branch in Lagos’ new commercial nerve center, Lekki Phase 1 was opened in November 2019. The solar-powered branch boasts the first ever Drive-Through ATM in Nigeria, which allows customers transact at the ATM from the convenience of their car.

Brand & Citizenship
• edu360 2019: The Bank hosted the second edition of edu360, now the foremost education conference in Nigeria. The event attracted nearly 7000 attendees over three days with over 200 teachers were trained and participation from 40 schools across Nigeria. edu360 is driving Union Bank’s engagement and penetration in education sector.
• Employee Volunteer Day (EV Day): Through our UnionCares initiative, we launched our first ever UBN Employee Volunteer Day which held in 15 locations across 9 states in Nigeria. Over 1500 people volunteered to clean up their local communities during the EV Day exercise which will now become an annual event. UnionCares was created to have direct impact on communities and deepen stakeholder engagement in the communities where we do business.
• Strategic Partnerships on Women Entrepreneurship: Union Bank empowered 60 women to launch small scale businesses in partnership with the Mamamoni Innovation Center which was fully funded by the Bank. In addition, we partnered with Leading Ladies Africa to run the Enterprise and Leadership Programme (ELP) for 40 women entrepreneurs and continued our support of the globally recognized Girls Coding Summer Camp for young girls organised by Pearls Africa. About 80 girls learnt coding and other ICT skills through the programme. Union Bank remains committed to supporting women through these initiatives and our αlpher proposition which is focused on supporting women-owned and led businesses.
Capital & Funding
• N30bn Bond Issuance: Union Bank raised the largest 10-year bond ever issued by a corporate institution in Nigeria demonstrating the strong confidence in the local capital market for the bank. The N30bn Tier 2 bond was fully subscribed from the Nigerian Capital Market.
• $200m OPIC funding: Union Bank working in partnership with Atlas Mara, secured $200 million in funding from the US Development Finance Corporation (DFC) previously called
OPIC, for investments over the next ten years in digitization, on-lending to SMEs and funding for αlpher, our women banking proposition. This is one of the largest investments made by the DFC in a financial institution in Nigeria and sub Saharan Africa to date.

Awards & Recognition
• Best Branch Digitisation Initiative in Africa – Asian Banker West Africa Awards (Joint award with Newgen Software).
• Excellence in Internet Banking – 2019 Finnovex Awards (West Africa)
• Best Company in Environmental Excellence – 2019 Sustainability, Enterprise and Responsibility Awards (SERAs)
• 2019 Advertiser of the Year – Pitcher Awards Creativity Week.
• Outstanding Film in Banking and Investment & Corporate Image – 2019 Lagos Advertising and Ideas Festival (LAIF) Awards

Commenting on the results, Emeka Emuwa, CEO said:
“The Bank’s strong overall performance has paved the way for a critical milestone. With the approval of the Central Bank of Nigeria, the Board of Directors will recommend a dividend payment to shareholders for the first time in over a decade. Returning value to our shareholders has been at the core of Union Bank’s transformation and continuous drive to become a leading financial institution in Nigeria.
The Bank delivered a solid set of results for full year (FY) 2019, recording growth across the major income lines. The top-line revenue at ₦159.9bn is up 14% from ₦140bn in 2018. Profit Before Tax (PBT) increased by 33% from ₦18.6bn in 2018 to ₦24.7bn for the year.
Core to our earnings has been the conscientious growth of our loan book. The Bank booked ₦98bn in new loan assets in the course of the year reflecting a 20% growth to close at ₦595.3bn in Gross Loans.
As a result of our larger loan book and intensified recovery efforts, Non-Interest Income grew by 23% from ₦35.3bn to ₦43.3bn in the period with recoveries accounting for ₦8.8bn of the total amount.
Consistent with our vision to be Nigeria’s ‘most reliable and trusted banking partner,’ we are optimizing our business model to focus solely on Nigeria where we continue to invest and thrive. Consequently, we have made the strategic decision to divest of our UK subsidiary, Union Bank UK which will enable us focus on the distinct long-term opportunities in the Nigerian market. The divestment is expected to conclude in 2020 subject to regulatory approvals in Nigeria and the UK.
In 2020, we will continue to focus on bottom-line initiatives that will build on our success in 2019. We are promoting synergy across our businesses and functions to ensure alignment with and on our strategic objectives.
Speaking on the FY 2019 numbers, Chief Financial Officer, Joe Mbulu said:
“Our Group numbers reflect the classification of our UK subsidiary as a discontinued operation in line with IFRS 5. This is reflected in both 2018 and 2019 numbers.
We are proud of the top-line and bottom-line numbers the Bank delivered in 2019, owing largely to operational efficiencies and a laser focus on key deliverables.
Through our LEAP initiative, our focus on discretionary cost discipline led to a reduction of N2.4 billion on related cost lines driving overall expenses down. Consequently, our Cost-Income Ratio declined to 74.1% from 79.2% in 2018. Our Total Customer Deposits grew by 5% to ₦886.3bn from ₦844.4bn as at December 2018 with low-cost deposits up by 7.7% and now accounting for 74% of total customer deposits compared to 71% in 2018.
With our sustained and aggressive focus on recoveries to improve asset quality, we have brought the Bank’s NPL ratio down to 5.8% from 7.8% as at December 2018, in line with our 2019 guidance. Capital Adequacy Ratio (CAR) remains well above the regulatory threshold at 19.7%.
We will leverage our improved risk asset and capital base as we continue to rebuild our loan portfolio which we expect to be a significant driver of growth in 2020.”