Union Bank To Raise N50bn Right Issue In Q2
Following approvals from shareholders, Union Bank Nigeria Plc would launch a rights issue in the second quarter of 2017 to raise up to N50 billion in Tier 1 capital.
The chairman of the bank, Cyril Odu made this known at the 48th Annual General Meeting held Wednesday in Lagos.
The additional funding, according to Odu will accelerate business growth and position as a leading commercial bank in Nigeria and will also allow the bank to maintain compliance with regulatory capital requirements.
The chairman said the bank has reported a profit after tax (PAT) of N15.4 billion on gross earnings of N126.6 billion for the financial year ended December 31, 2016 compared with a PAT of N14.3 billion on gross earnings of N117.2 billion in the corresponding period of 2015, this represents a growth of eight percent in net profit and in earnings respectively.
Other highlights of the bank’s financial performance in 2016 show that interest income grew by eight percent to N98 billion from N90.9 billion in 2015, as a result of growth in the loan book and improved asset yields while non-interest revenue also moved up by nine percent to N28.6 billion from N26.2 billion in 2015 owing to income from e-business channels.
Operating expenses (OPEX) increased by seven percent to N62 billion from N57.9 billion in 2015 due to inflationary and devaluation pressures and ongoing investments in the bank’s technology and network infrastructure while gross loans grew by 38 percent to N535.8 billion compared to N388.8 billion in 2015.
Customer deposits rose by 15 percent to N658.4 billion as a result of new product offerings, increased market penetration and improved customer off take.
Speaking on the group’s results for the year, the group managing director/chief executive, Emeka Emuwa said, “In 2016, we focused on executing our priorities across all our business segments, especially in the retail space, with an aggressive strategy to increase adoption of our alternate channels. Our success in this area, along with improved core interest earnings, contributed to pre-tax profit growth of six per cent compared to 2015.
According to him, our research-led, customer-centred product development strategy, coupled with an up skilled sales force and targeted marketing campaigns boosted our customer deposit base by 15 per cent compared to 2015, and led to a 73 per cent increase in new-to-bank customers.
“While the operating environment remains a challenge, we are focused on our 2017 priorities which include raising Tier 1 capital to execute our growth agenda across our retail, commercial and corporate businesses, particularly transaction banking and value chain.”
