Union Bank of Nigeria Plc has grown its group's net profit by 69 per cent to N8 billion in the first quarter of 2012 compared to 2011.
Interim report and accounts of the Bank for the year ended March 31, 2012, presented in compliance with the International Financial Reporting Standard (IFRS), showed that group bottom-line performance was driven by significant improvement in the profitability of the bank as net profit rose by 127.2 per cent to N6.32 billion in 2012 as against N2.78 billion in 2011. Group net profit thus spiraled upward to N7.62 billion compared to N4.51 billion in corresponding period.
Earnings analysis showed a bright outlook for the bank with basic earnings per share of N1.17 in first quarter 2012 compared to 18 kobo posted in comparable period of 2011 and a loss per share of N14.06 recorded for the full-year ended December 31, 2011.
With the first quarter net earnings indicating earnings yield of more than 26 per cent at current share price on the secondary market, the report showed impressive investment outlook for the bank. Annualised, the first quarter earnings implied probable basic earnings per share of N4.68 for the full year ending December 31, 2012, showing greater prospects with earnings yield of some 106 per cent at current market consideration.
The report showed that Union Bank continued to improve on the efficiency and profitability of its core banking operations as net interest margin improved from 72.9 per cent to 74 per cent. Interest income stood at N20.8 billion, while net interest income was N15.33 billion. Net fee and commission income rose from N3.33 billion to N6.63 billion, representing an increase of 99 per cent.
Shareholders' funds stood at N193.84 billion in 2012 compared to deficit of N123.7 billion in first quarter of 2011. The first quarter performance also showed appreciable accretion above shareholders' funds of N186.99 billion recorded at the end of 2011. Total assets stood at N1.1 trillion with deposit of N565.34 billion in 2012.
Commenting on the results, Group Managing Director, Union Bank of Nigeria (UBN) Plc, Mrs Funke Osibodu, said the first quarter report was indicative of the efforts by the board and management to return the bank to its place of pride as a foremost financial institution that consistently creates value for all stakeholders.
She assured that with the continuing intensive restructuring being undertaken by the management, the bank has returned from the abyss of a bailed out bank with negative capital to one of the most promising financial institutions in Nigeria.
According to her, the spirit of the new Union Bank was seen in its ultra-modern remodeled branches, courteous and efficient service delivery, vast technology and increased attention to customer-centric products and services that treat each customer as a most valuable one.
Osibodu said the performance of the bank has vindicated the management, commending the board, staff and all stakeholders that supported the management through the recapitalization exercise against all odds.
Meanwhile, analysts have said the first quarter report has rekindled the growth prospect of Union Bank, which had projected that it might pool as much as N66 billion in pre-tax profit in the course of three business years between 2012 and 2014.
In a three-year forecast earlier made available to shareholders, the bank said it expected that shareholders would have as much as N47 billion in net earnings, which the board and shareholders could decide on at general meetings.
Profit after tax, otherwise known as net earnings after tax or post-tax earnings, exclusively belongs to shareholders who may decide to wholly or partly distribute the sum in cash payouts or bonus shares or plough back such into the business.
According to the forecasts, profit before tax is expected to be about N66 billion for the three-year period between 2012 and 2014.
Profit before tax is expected to be N13.1 billion in 2012 and thereafter to N24.6 billion and N27.7 billion in 2013 and 2014 respectively.
Net earnings distributable to shareholders is expected to be N9.16 billion in 2012 and subsequently rise to N17.9 billion and N19.4 billion in 2013 and 2014 respectively.
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