Union Bank to float additional N50bn rights, records 6% increase in profits

By Odunewu Segun

Union Bank Plc has completed arrangements to float additional capital of up to N50 billion in Tier 1 capital by the second quarter of 2017. The fund raising is by way of rights to existing shareholders.

According to the bank, the additional fund would enable it maintain compliance with regulatory capital requirements, and also help accelerate business growth, and position it as one of the leading commercial banks in Nigeria.

According to the Chief Executive Officer, Emeka Emuwa, the group posted a Profit before tax of ₦15.7 billion, which represents six per cent rise compared to ₦14.9 billion posted in the corresponding period of 2015.

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Similarly, the profit after tax (PAT) rose to N15.4 billion, up from N14.3 billion recorded in 2016. The bank’s gross earnings also rose 8 per cent to ₦126.6 billion, from ₦117.2 billion in 2015, while Interest income stood at ₦98.0 billion from ₦90.9 billion achieved in the previous year.

He explained further that the improved performance was driven by loan book growth and improved bank asset yields, just as interest expense went down by six per cent to ₦33.0 billion, from 35.2 billion in 2015.

“We had improved customer funding base; less reliance on expensive interbank funding, leading to drop in core cost of funds to 5.23 per cent in 2016 from 6.64 per cent in 2015,” he added.

The net revenue before impairment of the bank also grew by 14 per cent, from N81.9 billion in 2015 to ₦93.6 billion during the year under review.