One of the operational highlights of Union Bank of Nigeria Plc, one of Nigeria’s long standing financial institutions in 2015, was its focus on low-cost retail model, which translated to significant revenue gains and customer acquisitions across electronic banking channels.
This could be seen as the bank last week announced its audited results for the financial year ended 31st December 2015, posting profit before tax of N14.6 billion from N14.4 billion in 2014, excluding gain on sale of subsidiaries.
Other operational highlights include 20 percent reduction in transaction processing times, following the up-grade of the core banking platform and state of the art data centre.
The bank last year launched new identity, re-energised the Union Bank brand and renewed customer interest. It expanded retail product portfolio with the successful introduction of UnionKorrect, a tiered savings product and UnionGoal, a goal-oriented savings product.
The bank enhanced customer service, affirmed through customer responses and improved ranking on independent industry surveys. There was also a significant progress made in branch network transformation with 110 projects, including refurbishments, new builds, relocations and closures, which were completed in 2015.
Meanwhile, the bank recorded gross earnings of N118.4 billion for the financial year ended December 31, 2015 compared to N109.8 billion declared in 2014, representing an increase of eight percent.
The finance result of the bank revealed that net interest income grew by six percent to 53.8 billion in December 31, 2015 from 50.6 billion in December 31, 2014, while asset yield stood at 16.4 per cent compared with 14.9 percent in 2014.
Emeka Emuwa, Chief Executive Officer, who commented on the result said: “2015 was a challenging year across board, with significant operational and economic headwinds. Notwithstanding the difficult operating environment, Union Bank maintained its focus on business and transformation initiatives, which yielded desired results. Our gross earnings, excluding one-time gain on sale of subsidiaries, are up by 11 percent compared to 2014. With the launch of a re-energised brand identity and a retail model focused on customer needs, we increased our customer deposits by12 percent year-on-year.
Our simpler and smarter banking solutions have enabled us make strides in customer service delivery, which has reflected in independent industry surveys. We continue to strengthen our e-banking platforms, as we acquire new customers and migrate existing ones to these platforms, realizing increased gains in revenues and reducing service costs.
Looking ahead, with the operating environment expected to remain challenging, Union Bank remains focused on delivering quality financial services to our customers and value to all stakeholders. We believe we are well positioned to take advantage of opportunities in emerging sectors of the economy as well as deepen our strong hold in key geographies around the country.”
Also commenting, Oyinkan Adewale, chief financial officer, said, “the 2015 numbers reinforce the success of the Bank’s transformation. We are particularly pleased with the improvement in asset yield from14.9 percent to16.4 percent, and our success in holding operating costs down for the fourth successive year, while making investments in technology, people and processes. We continued to deliver more value from our assets; interest income grew by 19 percent compared to an eight percent growth in total assets.
Core performance of our Group is up by 24 percent. With the sale of our non-banking subsidiaries largely concluded in 2014, gross earnings at the group level is expectedly lower in 2015 without the one-off gains from the profitable sales of subsidiaries in the previous year. We are now a leaner and more efficient group; focused on core commercial banking.
We have taken a prudent approach to our loan impairment provisions, due to a worsening operating environment and believe that there is an opportunity for recoveries as the economy improves.”