Union Bank’s stock led the charge in financial stocks yesterday, as investors bid up the counter by limit up 9.96 percent.
Analysts say the stock which is up 26 percent in May alone is rallying on the back of investors’ confidence in the lender’s recently unveiled brand identity that was orchestrated with a view to maximize the value of owners.
The bank’s share price increased 9.96 percent to N5.63 2:30 pm on the Nigerian Stock Exchange (NSE) while market capitalization was N90.45 billion.
The impressive run validates the assertion by experts that a well developed product brand enhances product recognition, and help build a solid brand equity.
The Nigerian lender’s new brand identity not only moved the markets, it also bagged awards for improved customer service.
“Our award winning reflects our new proposition to make banking simpler and smarter for our customer’s,” said Emeka Emuwa, the bank’s Chief Executive Officer (CEO).
“Following the brand launch, Union Bank has introduced two innovative savings products- UnionKorrect and UnionGoal to the Nigerian market. We have rolled out identity the new identity in 80 branches across the country, ensuring that our customers are able to bank in modern and professional environment,” said Emuwa.
Union Bank has remained profitable while maintaining a solid risk management strategy amid a tough and unpredictable macroeconomic environment and exposure to the oil and gas.
For the first three months through March 2016, bank posted a profit after tax (PAT) of N4.61 billion while interest income stood at N21.02 billion.
Loans and deposits to customers increased by 3 percent to N358.47 billion in 2016 from N348 billion as at December 2015. Deposits from customers were up by 3 percent to 569.11 billion in the period under review as against N487.23 billion the previous year.
Analysts attribute the increase in deposits base to increased customer confidence in service and product the lender offers as well as its re-energized identity.
The economy of Africa’s largest economy has been battered since mid last year when a sudden fall in oil prices by more than 60 percent to $42 depleted reserves and forced the central bank to impose currency restrictions.
Banks are hard hit as the capital controls caused liquidity squeeze and squeezed profits.
The recent figures released by the National Bureau of Statistics (NBS) showed gross domestic product (GDP) contracted by 0.36 percent, the worse figure since 2004.
Despite the economic slowdown, Union Bank is poised to use its state of the act technology in reducing costs and maximizing profit.
“To be recognized at the Transform Awards and competing premiere brands across Middle East and Africa is truly a reflection a fantastic validation of the hard work that went into the development and execution of our new identity,” said Ogochukwu Ekezien Ekaidem, head of corporate communication, of the bank.
Union Bank won the award for the Best Brand Development to Reflect Changed Mission/Vision/Positioning, beating Abu Dhabi Sports Council, Bank Al Bilad, Gulf Finance, VOX, Bahrian Finance Company and Commercial bank of Dubai.
