Union Bank of Nigeria Plc reported a solid 8.9 percent increase in gross earnings for the financial year ending December 31, 2021, reaching N175 billion compared to N160.7 billion in 2020. The results, released on the Nigerian Exchange Limited (NGX) in April 2022, highlight the bank’s resilience amid economic challenges, driven by strong growth in non-interest income and expanded lending activities.
Financial Performance Highlights
The bank’s financial statement revealed significant growth in non-interest income, which surged by 26.7 percent to N55.7 billion in 2021, up from N44 billion in 2020. This increase was largely fueled by robust debt recoveries, showcasing the bank’s effective recovery strategies. However, net operating income after impairments declined by 3.6 percent to N99.7 billion from N103.4 billion in 2020, reflecting some challenges in the operating environment. Similarly, profit before tax dropped by 19.3 percent to N20.5 billion from N25.4 billion in the previous year.
Despite inflationary pressures, Union Bank maintained tight control over costs, with operating expenses rising marginally by 1.5 percent to N79.1 billion from N78 billion in 2020. This disciplined approach to cost management underscores the bank’s operational efficiency.
Growth in Loans and Deposits
Union Bank significantly expanded its lending portfolio, with gross loans increasing by 22 percent to N899.1 billion in 2021 from N736.7 billion in 2020. This growth reflects the bank’s strategic focus on supporting key economic sectors with high growth potential. Similarly, customer deposits grew by 20.4 percent to N1.4 trillion from N1.1 trillion in 2020, driven by an expanded product base and enhanced digital channels that attracted more customers.
These achievements highlight Union Bank’s ability to deepen customer engagement and capitalize on opportunities within Nigeria’s evolving financial landscape.
Strategic Enhancements Drive Results
Commenting on the results, Emeka Okonkwo, Chief Executive Officer of Union Bank, attributed the bank’s performance to an improved operating and go-to-market model. “We have enhanced our approach to deliver better performance and efficiency, leveraging our extensive network across regions,” Okonkwo stated. He emphasized that increased customer engagement and product penetration have translated into higher revenues across various geographies.
Okonkwo also highlighted the bank’s efforts to diversify income streams and accelerate its recoveries program, which have been pivotal in sustaining headline growth. These strategies have positioned Union Bank to navigate economic challenges while expanding its market presence.
Looking Ahead
The 2021 results reflect Union Bank’s commitment to strengthening its financial position through diversified revenue sources and prudent cost management. The significant growth in loans and deposits signals strong customer trust and the bank’s ability to meet the financing needs of key sectors. As Union Bank continues to leverage digital platforms and broaden its product offerings, it is well-positioned to sustain its growth trajectory in Nigeria’s competitive banking sector.
The bank’s focus on operational efficiency and strategic lending underscores its role in supporting Nigeria’s economic recovery and development in 2021 and beyond.
