Union Bank reports 20 per cent growth in H1 2024 profit despite CBN intervention

Union Bank of Nigeria has reported a 20% increase in profit before tax (PBT) for the first half of 2024, achieving N79.8 billion in PBT on gross earnings of N333 billion.

This growth comes despite challenges following the Central Bank of Nigeria’s (CBN) intervention in January, which raised customer concerns. The bank’s profit marks an improvement from the N66.5 billion reported in the same period of 2023.

The Union Bank report attributed its strong performance to strategic initiatives focused on digital expansion, targeted sector growth, and cost-efficiency measures.

The bank’s gross earnings rose by 58% compared to the first half of 2023, driven by net interest, operating, and trading income increases.

Despite external pressures such as inflation, exchange rate volatility, and increased operational costs, Union Bank reported a 32% growth in net operating income after impairments, reaching N143.6 billion.

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However, non-interest income saw a slight decline of 3%, due to foreign exchange revaluation losses. Operating expenses increased by 52%, reflecting the high inflationary environment and rising power and regulatory costs.

Union Bank reports also include a 24% growth in its loan portfolio, which reached N1.93 trillion, while customer deposits grew marginally by 1% to N2.36 trillion. The bank’s cost-to-income ratio stood at 44%, an increase from 39% in the previous year.

Looking ahead, Union Bank plans to focus on enhancing efficiency and driving non-interest income to sustain its positive momentum through the second half of the year.

The bank’s leadership expressed confidence in its ability to continue delivering strong returns on equity and assets, which stood at 40.6% and 3.68%, respectively, in H1 2024.

The Union Bank reports also highlighted its recent launch of the UnionKash digital lending platform, which has already facilitated over 14,000 soft loans. As part of its broader strategic vision, Union Bank has initiated a recapitalization process to align with the CBN’s Banking Sector Recapitalization Program, aimed at increasing financial stability and seizing emerging market opportunities.