• Login
  • Register
Nairametrics
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
    • Economy
    • Nairalytics
  • Markets
    • Currencies
    • Cryptos
    • Commodities
    • Equities
      • Company Results
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Sectors
    • Agriculture
    • Aviation
    • Company News
    • Consumer Goods
    • Corporate Updates
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Health
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Renewables & Sustainability
    • Tech News
  • Business News
    • Budget
    • Public Debt
    • Funds Management
    • Tax
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
    • Research Analysis
  • Recapitalization
    • Access Holdings Offer
    • Fidelity Bank Offer
    • GTCO Offer
    • Zenith Bank Offer
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
    • Economy
    • Nairalytics
  • Markets
    • Currencies
    • Cryptos
    • Commodities
    • Equities
      • Company Results
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Sectors
    • Agriculture
    • Aviation
    • Company News
    • Consumer Goods
    • Corporate Updates
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Health
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Renewables & Sustainability
    • Tech News
  • Business News
    • Budget
    • Public Debt
    • Funds Management
    • Tax
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
    • Research Analysis
  • Recapitalization
    • Access Holdings Offer
    • Fidelity Bank Offer
    • GTCO Offer
    • Zenith Bank Offer
Nairametrics
No Result
View All Result
Home Opinions Blurb

EARNINGS REVIEW: UNION BANK PLC, ONCE BIG, ONCE STRONG, ONCE UNRELIABLE..?

Ugodre Obi-chukwu by Ugodre Obi-chukwu
September 30, 2012
in Blurb
Share on FacebookShare on TwitterShare on Linkedin

Union Bank Released its half year earnings last week about 3months after the end of the period or just at the close of business for the third quarter of 2012 financial year. Nevertheless, the bank released its half year results showing a return to profitability after a period of unsustainable losses. According to the Group Managing Director, Funke Osibodu, “The performance is attributed to full re-capitalisation, injection of new capital; support from AMCON with the clean- up of bad loans; faster service delivery to customers and other growth spurring polices of the Osibodu led management”. But could this be the reason why?

Revenue

The Bank posted Gross Earnings of N58billion for the first half of this year as against N67.8billion when compared to the same period last year. Net Interest income however rose marginally by 2.2% to N34.7b when compared to the same period last year despite a drop in gross interest income. This was achieved through an impressive 42% drop in interest expense during the period. This delivered an interest margin of 78% for the period better, a margin that is probably only bettered by their old foe, First Bank. Loan Impairment also dropped to N1.2billion as against N45billion in the same period last year, bringing their’s below industry trends. First Bank, GTB, Access Bank and Stanbic had impaired loans of N9b, N2.4b, N1.8b, N1.2b, respectively in the same period.

 

 

Operating Profit

The Bank posted an operating profit of N12.4billion for the first half of this year signifying a return into profitability after posting a loss of N61.5b in the same period last year. Much of the bank’s profits is as a result of a near 75% cut in operating expenses (excluding personnel and depreciation cost) dropping from N47b in H1 2011 to N12b H1 2012.

Bottom Line

In as much as it is important to hail the bank’s return to profitability, its also important to note that the bank’s return to profitability was driven by cut back in bad loans (as a result of AMCON cleaning up) rather than any form of increase in revenue. In fact, without the huge losses precipitated by written down loans in 2011, this H1 result may well have been a disappointing result when compared to last year’s result. Interest Income for example dropped 12% this period when compared to last. Operating income (without providing for loss on loans) dropped 5% from N51billion in H1 2011 to N48billion H1 2012. All of this in a period where the bank’s balance sheet has seen improved stability and its peers in the industry revel in the windfall that is high interest rate on government securities. Much of this though, may point to the seeming inactivity in the banks core operations. For example, loans and advances to customers remained flat with just a modest growth of 0.7%. Customer deposits also only just increased 10% to N555b in an industry with the big five posting well over one trillion naira in deposits (first bank had over N2tr) at the end of June 2012. Still a lot of catching up to do if they are to remain competitive going forward.

Apart from the satisfaction of finally attaining profitability another consolation may well be the fact that when it comes to returns on asset, the bank is well within industry trends. Despite not growing its loan portfolio it is still able to generate returns in line with its assets just as many in the industry does. There is significant room for improvement in Union Bank and a potential to beat expectations by a wider margin. As for shareholders who have been comatose by losses in recent times a respite seems near and may now begin to believe in a bank that was once reputed to be big strong, strong and more recently unreliable. Share price closed at N7.51 representing a weekly drop of 17.74%.

RelatedStories

Why the Market Is Betting on the Naira, Crypto’s Decline & GDP’s Hidden Story | Drinks & Mics

Why the Market Is Betting on the Naira, Crypto’s Decline & GDP’s Hidden Story | Drinks & Mics

March 1, 2025
Insurance Sector: Nigeria’s galloping inflation to drive claim costs 

Analysts predict inflation fall in second half, reveals expected rate for December 2025; boom in stocks 

February 17, 2025

UPDATED – 1/10/2012 (Share price has declined rather than increased)

Tags: ANALYSISCOMPANY RESULTSEARNINGS REPORTRESULTSSTOCKS
Ugodre Obi-chukwu

Ugodre Obi-chukwu

Ugo Obi-Chukwu "Ugodre" is the Founder, Publisher, and Chief Analyst of Nairametrics, a leading business and financial news online platform in Nigeria. Ugo is also the Chief Editor of the Nairametrics “Blurb” Opinion pages. Follow Ugodre on Twitter @ugodre and Instagram @ugodre Email: ugodre@nairametrics.com

Related Posts

Why the Market Is Betting on the Naira, Crypto’s Decline & GDP’s Hidden Story | Drinks & Mics
Digital Media

Why the Market Is Betting on the Naira, Crypto’s Decline & GDP’s Hidden Story | Drinks & Mics

March 1, 2025
Insurance Sector: Nigeria’s galloping inflation to drive claim costs 
Economy

Analysts predict inflation fall in second half, reveals expected rate for December 2025; boom in stocks 

February 17, 2025
NGX
Equities

NGX must hold stocks with double digit upside for the year

January 23, 2025
Why The Naira Is Gaining Against The Dollar.
Digital Media

Where to invest in Nigeria in 2025!

January 8, 2025
Follow the money
Digital Media

Insurance Stocks To Buy

November 29, 2024
John Holt PLC rises over 70% month-to-date amid market activity spike 
Equities

John Holt PLC rises over 70% month-to-date amid market activity spike 

November 11, 2024
Next Post

How To Look Expensive On A Cheap Date

Comments 2

  1. resourcedat says:
    September 30, 2012 at 5:56 pm

    EARNINGS REVIEW: UNION BANK PLC, ONCE BIG, ONCE STRONG, ONCE UNRELIABLE..? https://t.co/af0OUjUB

    Reply
  2. ugodre says:
    September 30, 2012 at 5:56 pm

    EARNINGS REVIEW: UNION BANK PLC, ONCE BIG, ONCE STRONG, ONCE UNRELIABLE..? https://t.co/8Ksds3nk

    Reply

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Emple
nlng
first bank
Zenth Bank








DUNS

Recent News

  • SOFTSWISS offers the key to responsible gambling as Nigeria’s digital betting market surges 
  • Denmark raises citizenship fee by 50%, introduces €402 reapplication charge 
  • ECOWAS MP flags West Africa’s youth unemployment as among world’s highest at 24.95%

Follow us on social media:

Recent News

SOFTSWISS offers the key to responsible gambling as Nigeria’s digital betting market surges 

SOFTSWISS offers the key to responsible gambling as Nigeria’s digital betting market surges 

June 20, 2025
Denmark

Denmark raises citizenship fee by 50%, introduces €402 reapplication charge 

June 20, 2025
  • iOS App
  • Android App
  • Contact Us
  • Home
  • Markets
  • Sectors
  • Economy
  • Business News
  • Financial Literacy
  • Disclaimer
  • Ads Disclaimer
  • Copyright Infringement

© 2025 Nairametrics

Welcome Back!

Login to your account below

Forgotten Password? Sign Up

Create New Account!

Fill the forms below to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In
Social Media Auto Publish Powered By : XYZScripts.com
No Result
View All Result
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
    • Economy
    • Nairalytics
  • Markets
    • Currencies
    • Cryptos
    • Commodities
    • Equities
      • Company Results
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Sectors
    • Agriculture
    • Aviation
    • Company News
    • Consumer Goods
    • Corporate Updates
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Health
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Renewables & Sustainability
    • Tech News
  • Business News
    • Budget
    • Public Debt
    • Funds Management
    • Tax
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
    • Research Analysis
  • Recapitalization
    • Access Holdings Offer
    • Fidelity Bank Offer
    • GTCO Offer
    • Zenith Bank Offer
  • Login
  • Sign Up

© 2025 Nairametrics