E-Financial
Union Bank reports 20% growth in PBT H1, 2024, despite CBN’s intervention
Despite the challenging environment following the Central Bank of Nigeria’s intervention in January 2024, which led to heightened customer concerns, Union Bank of Nigeria has reported a profit before tax of N79.8 billion on gross earnings of N333 billion during the half year ended June 30, 2024 compared with a profit before tax of N66.5 billion on gross earnings of N210.5 billion during the corresponding period of 2023, representing a growth of 20 percent in profit before tax and 58 percent in gross earnings.
The Bank said in a statement that,”This accomplishment demonstrates the bank’s resilience and commitment to delivering results in uncertain times.”
Commenting on the results, Yetunde B. Oni, Managing Director and Chief Executive Officer of the Bank ,said: “I am pleased that Union Bank of Nigeria has delivered a progressive financial performance in the first half of the year, with a significant boost in Net Interest Income, Net Operating Income, and Net Trading Income.
“At the beginning of the year, our top priority was to keep the momentum going with a strong focus on stability following the intervention of the Central Bank of Nigeria. We also continued with the planned strategic priorities, which are centred around scaling our digital play, driving hypergrowth in target sectors, optimising our wholesale bank structure, aggressively ensuring recoveries of past-due obligations, and orchestrating a robust ecosystem play through existing and new partnerships.
“So far, we are seeing the direct impact of our strategy on our financial performance. We achieved a substantial increase in Gross Earnings by 58% to ₦333bn compared to ₦210.5bn in H1 2023. Net Operating Income after Impairments increased by 32% to ₦143.6bn from ₦108.5bn in H1 2023, attributed to enhanced interest income, fees, commissions, and margin expansion. Similarly, we achieved Profit Before Tax (PBT) of ₦79.8bn, representing 20% growth compared to ₦66.5bn in H1 2023.
“In pursuit of our strategic priority to scale our digital play, Union Bank successfully launched its digital lending platform, UnionKash. This platform enables existing and new-to-bank customers to access soft loans easily. Since its launch in the first quarter of the year, over 14,000 customers have successfully accessed soft loans through the USSD code *826*41#.
“These achievements reflect the remarkable resilience and dedication of our staff, who have been instrumental in navigating the challenges of a demanding operating environment. Despite the pressures of inflation, exchange rate volatility, and increased operational costs, our team has remained steadfast and committed to delivering excellence. I extend my sincere appreciation to all our employees for their hard work and unwavering dedication, which have been critical to our success in the first half of 2024.
“I also want to express our deep gratitude to our customers, whose loyalty to the Union Bank brand has been unwavering. Their trust and continued patronage have been vital to our success, and we remain committed to serving them with excellence. Additionally, we acknowledge the invaluable support from our regulators as we navigated the complexities of our operating environment.
“In line with the realities of our environment, the bank has initiated the process of recapitalisation. The Banking Sector Recapitalisation Program, introduced by the Central Bank of Nigeria (CBN), mandates banks to increase their minimum paid-in common equity capital to a specified amount by April 2026, per their license category and authorisation. This strategic initiative is not only aimed at aligning our capital adequacy with regulatory standards but also at surpassing them, thereby fortifying our financial stability and positioning us to capitalise on emerging market opportunities.
“As we move forward, our focus remains on building a controlled, compliant, and profitable organisation. We are committed to maintaining strong governance frameworks, ensuring regulatory compliance, and driving sustainable profitability. These pillars will not only fortify our financial stability but also position us to capitalise on emerging opportunities in the market. I am confident that with our continued focus on these priorities, we will sustain our positive momentum and deliver long-term value to our stakeholders.”
Speaking on the H1 2024 numbers, Acting Chief Financial Officer Oluwagbenga Adeoye said:
“Our H1 2024 financial performance is a testament to the Bank’s resilience because it came on the backdrop of a slow start, occasioned by the high inflationary environment, exchange rate volatility, increased power costs and other factors.
“Nevertheless, we were not entirely insulated from these shocks as Non-Interest Income reduced marginally in H1 2024 by 3% to ₦108.3bn from ₦112.1bn in H1 2023 due to foreign exchange revaluation loss. Operating Expenses increased by 52% to ₦63.8bn against ₦42bn in H1 2023, majorly due to the high inflationary environment, increased power cost and increased non-discretionary regulatory cost. Notwithstanding, our Cost to Income Ratio remains below 50% at 44% compared to 39% recorded in H1 2023 on the back of implementing planned cost-efficiency initiatives.
“The Bank continued to grow its loan book cautiously, with gross loans increasing by 24 percent to ₦1.93 trillion compared to ₦1.55 trillion in December 2023, customer deposits grew marginally by one percent to ₦2.36 trillion from ₦2.34 trillion in December 2023, reflecting the impact of socio-economic pressures on our operating environment.
“In the second half of the year, we will focus on improving efficiency and driving our non-interest income. We are confident that we will finish the year strong and sustain the returns on equity and returns on assets, which stood at 40.6% and 3.68%, respectively.”
Further analysis of the Bank’s performance during the reviewed period showed that its net operating income after impairments rose to N143.6 billion from N108.5 billion in 2023, representing a growth of 32 percent, non-interest income reduced marginally by three percent to ₦108.3 billion from N112.1 billion during the corresponding period of 2023 due to foreign exchange revaluation loss.
Operating expenses moved up remarkably by 52 percent to ₦63.8 billion from N42 billion in the corresponding period of 2023, resulting from the inflationary environment,increase in power costs and increase in non-discretionary
regulatory costs.
In the same vein, gross loans increased by 24 percent to ₦1.93trn from N1.55trn in December 2023 while customer deposits went up marginally by one percent to ₦2.36 trillion from N2.34 trillion in Dec 2023, reflecting the impact of the challenges posed by the socio-economic environment on its operations.
E-Financial
Court Freezes N548.6m of Nigerian Crypto Users over Naira Fluctuation
Federal High Court has ordered that the bank accounts of suspected cryptocurrency users on ByBit, KuCoin, and other platforms have N548.6 million frozen by the Economic and Financial Crimes Commission (EFCC), because of their alleged involvement in naira fluctuations.
The court froze the cash based on September 3, 2024, request that accused two prominent foreign cryptocurrency sites, ByBit and KuCoin, of contributing to the depreciation of the Nigerian Naira, according to Nairametrics.
This development is part of a larger legal and prosecutorial effort by federal government authorities to deal with claims that international cryptocurrency platforms are evading taxes and violating foreign exchange laws.
Remember that in February 2024, two executives of the cryptocurrency platform Binance were detained by Nigeria’s security agency on the basis of information provided by the National Security Adviser.
The information claimed to have involved money laundering and financing of terrorism on specific cryptocurrency exchange platforms. ]
According to Nairametrics, the EFCC has already filed a lawsuit against Binance and Tigran Gambaryan for $35.4 million worth of money laundering offenses.
ByBit, KuCoin, and several other anonymous cryptocurrency platforms are accused in this most recent motion of facilitating the “price discovery, confirmation, and market manipulation” that led to “distortions in the market, resulting in the naira losing its value against other currencies” by their Nigerian users.
In his affidavit, which Nairametrics exclusively obtained,Okoro Philip, EFCC investigator, claimed that Nigeria has made significant progress in recent months towards currency stabilization measures by the Federal Government, as demonstrated by the dollar’s trade on the illicit market at N980 to $1.
He continued by saying that these gains were quickly undone on Thursday, April 18, 2024, when the dollar quickly rose on the black market from N1,250 to $1.
“These fluctuations were primarily driven by activities on platforms such as ByBit, KuCoin, and other similar cryptocurrency platforms,” he stated, citing more intelligence and research.
According to him, the 22 bank accounts listed in the motion and located in different Nigerian banks are owned by eager sellers of USDT who give their naira accounts in exchange for the transfer of the USDT’s naira equivalent.
The argued that the people whose accounts were found are users of ByBit, KuCoin, and other international cryptocurrency platforms.
These people are not allowed to trade in foreign currencies, advertise, bargain, or exchange cryptocurrency for naira at rates that are harmful to Nigeria’s financial system.
The prosecution levied charges against the cryptocurrency platforms, alleging that they wilfully disregarded Nigeria’s anti-money laundering rules and regulations, allowing their users to conduct business secretly.
“ByBit is a cryptocurrency platform that allows users to swap USDT (a digital dollar) for other currencies such as the naira. One USDT is approximately equal to one US dollar. The exchange rates determined by users of these cryptocurrencies adversely affect the value of the naira by artificially lowering its value.”
In the case identified as FHC/ABJ/CS/543/2024, the official stated, “The proceeds of this manipulation go into the account of the willing seller.”
E-Financial
UBA Appoints Nweke, Deputy Managing Director
United Bank for Africa (UBA) has named Chukwuma Nweke as its deputy managing director.
Nweke’s appointment that previously held roles of chief operating officer and executive director, retail & payments “underlines once again, UBA’s commitment to upholding the highest governance and operational leadership,” according to Tony Elumelu, chairman, UBA.
The new deputy managing director will start his new position on 1 October, the financial institution disclosed in a statement on Wednesday.
The statement signed Ramon Olanrewaju, UBA’s group head, media and external relation, said that Nweke is the deputy managing director “in charge of IT and operations”.
Muyiwa Akinyemi, who has been the bank’s deputy managing director since August 2022, is now “the deputy managing director in charge of southern operations,” the spokesperson further said.
A graduate of Accountancy, from University of Nsukka, Enugu State, Nweke also holds a Master’s of Business Administration at the university.
He is a Fellow of the Institute of Chartered Accountants of Nigeria as well as an honorary member of the Chartered Institute of Bankers of Nigeria (CIBN).
His over 30 years of experience in the banking industry encompasses audit, retail banking, banking operations, strategy, technology and finance.
Elumelu, chairman of UBA was quoted as saying that “His deep industry expertise and proven track record make him an invaluable asset to our board, and we are confident that his contributions will further strengthen the group’s growth and success.”
In the same statement, the pan-African bank, which has footprints in 20 markets on the continent, announced exit of Kayode Fasola, a non-executive director, who has retired from the directors’ board.
Mr Fasola joined the lender in August 2018 and once served as the chair of its Finance & General Purpose Committee as well as a member of the Board Audit & Governance, Credit and Statutory Audit committees.
His areas of expertise includes performance management, risk management, banking operations, asset management, business strategy, banking operations, credit/financial analysis, insurance among others.
E-Financial
AFC Leads Nigeria’s Inaugural Domestic Dollar Bond, Raising over $900m
Africa Finance Corporation (AFC), the continent’s leading infrastructure solutions provider, today announced the issuance of an inaugural domestic dollar bond from the Federal Government of Nigeria (FGN), raising US$900 million and marking a significant milestone in the country’s economic development.
AFC acted as Global Coordinator on the first-of-its-kind issuance for Nigeria’s capital market. The bond which was issued at par has a tenor of five years and carries an annual coupon of 9.75%.
The issue closed with a 180% oversubscription, underscoring strong domestic investor confidence in Nigeria’s economic stability and growth potential, and the effectiveness of AFC’s strategic capital markets leadership.
As a domestic issue, the investor base comprised Nigerians and non-Nigerians resident in Nigeria, Nigerians in the Diaspora, and institutional investors. The bond will be listed and available for trading on the Nigerian Exchange Limited (“NGX”) and FMDQ Securities Exchange Limited (“FMDQ Exchange”).
The successful issuance demonstrates AFC’s pivotal role in supporting the Nigerian government’s commitment to deepening domestic capital markets, promoting financial inclusion and diversifying funding sources. It marks the first issuance under the FGN’s Domestic US Dollar Bond Programme. Proceeds of the bond issue will be invested in critical sectors of the Nigerian economy approved by the President on the recommendation of the Minister of Finance, subject to appropriation by the National Assembly.
“This inaugural domestic US dollar bond issuance is a significant achievement for Nigeria and marks a new chapter in the development of the country’s capital markets,” said Banji Fehintola, Executive Director and Head of Financial Services, Africa Finance Corporation.
“We are honoured to have played a leading role in this landmark transaction as the Global Coordinator, which aligns with AFC’s mission to develop domestic capital markets in Africa by providing innovative financing solutions that meet the continent’s unique needs and also leveraging our deep capital market expertise to serve and deliver value to our clients.
!This successful issuance not only showcases Nigeria’s economic potential but also reinforces the benefits of African nations looking inward to tap the deep pool of domestic capital on the continent and taking the lead in financing their own development.”
AFC has a solid track record in capital markets with a well-established diverse investor engagement program that included issuance of a US$1.16 Billion global syndicated loan earlier this year.
The Corporation was recently bestowed with “The Most Innovative Bond” award at the EMEA Finance Achievement Awards for its pioneering JPY 75 billion Samurai Bond Guarantee to the Arab Republic of Egypt and the “Best Supranational Syndicated Loan” award for securing a US$625 million syndicated loan last year, welcoming new lenders from the Middle East and Asia.
Alongside AFC’s role as Global Coordinator for the domestic bond issuance, United Capital Plc acted as Lead Issuing House/Coordinator; Meristem Capital Limited, Stanbic IBTC Capital Limited and Vetiva Advisory Services Limited acted as Issuing Houses; Constant Capital Markets & Securities Limited and Iron Global Markets Limited acted as Financial Advisers; Olaniwun Ajayi LP and G. Elias acted as Solicitors; and Greenwich Trustees Limited acted as Trustee.
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