Union Bank Declares 25 Kobo Dividend For 2020 On Strong Business Fundamentals Despite Impact Of COVID-19 - News at its peak

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Union Bank Declares 25 Kobo Dividend For 2020 On Strong Business Fundamentals Despite Impact Of COVID-19

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The Union Bank has released its audited 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 thepast   eight years,  enabled  a   swift  response  to  the  pandemic  that  allowed  our  workforcetransition  to   remote   working   while  maintaining  the   productivity   required  to   deliver   thesestrong set of results in 2020. 

Commenting on the results, Emeka Emuwa, CEO said:“The Bank has delivered a strong set of results notwithstanding the impact of COVID-19 onour operations and the wider economy, enabling the Board of Directors to continue to returnvalue 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 ourtarget 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%from ₦95.5bn to ₦103.4bn and translated into 2.8% growth in Profit Before Tax to ₦25.4bnfrom ₦24.7bn.The core of this performance is driven by the growth in our loan book, with 23.8% increase ingross loans, to ₦736.7bn from ₦595.3bn in 2019. 

The pandemic accelerated trends in customer behaviour and we have seen rapid increase indigital adoption with a 38% YOY increase in active users on our UnionMobile channel withtotal active users now at 2.9 million. Our UnionOne and Union360 platforms for businessesgrew by 11% from 25,000 users to 27,700 users. 94% of transactions in the Bank are nowdone digitally, up from 89% in 2019.We also aggressively grew UnionDirect (our agent network) by 6x from 3,100 to 18,100 inline with our focus on our retail business. With our investments yielding positive results, weare well positioned as a strong leader in the retail and digital space.In 2021, the Bank will focus on enhancing revenues and shareholder value by revving upcustomer  acquisition,  engagement and transactions through  seamless customer journeysand an optimized service delivery platform.

As I retire following eight years of rebuilding and repositioning this storied institution, I amconvinced that with the excellent management team and a clear strategy in place, UnionBank is well positioned to continue to compete and deliver value to its shareholders. 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  theimpact of the pandemic and economic challenges. Significant inflationary pressures and thetranslation of currency depreciation drove growth in our cost base, however we maintainedstrong control, limiting operating expense increase to 10% (₦77.9bn from  ₦70.8bn), wellbelow the rate of inflation. Consequently, we saw marginal increase in our cost to income ratio to 75.4% from 74.1%.Our customer deposits hit a milestone during the year, crossing the ₦1tr mark to ₦1,131.1bn from  ₦886.3bn in FY 2019, an increase of 27.1%.   Low  cost deposits  were up   by  17%,constituting 68% of total deposits helping to push cost of funds down by 1.4%. We continued to proactively manage our growing risk asset portfolio and recorded betterasset quality, with our NPL ratio improving from 5.8% to 4.0%. 

This achievement, combinedwith a solid capital adequacy at 17.5% and continued top-line growth, provides the platformfor strong growth going forward. 

We will continue to grow our loan portfolio in 2021, which we expect to be a significant driverof growth, combined with our value chain synergies across our business which will drivecustomer and transaction growth during the year and beyond.Our   UBUK   subsidiary   remains   classified   as   “Available   for   Sale”   as   the   sale   processcontinues albeit delayed due to the pandemic-induced lockdowns

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