Union Bank has released its audited financialstatements for the year ended 31st December 2020. The bank’s results for the period showsustained at in key income lines and significantly improved fundamentals,notwithstanding a constrained operating environment largely due to the impact of the Covid-19 pandemic.

Union Bank’s investments in technology and building a progressive work culture over thepast eight years, enabled a swift response to the pandemic that allowed our workforcetransition to remote working while maintaining the productivity required to deliver thesestrong set of results in 2020. Commenting on the results, Emeka Emuwa, CEO said:“The Bank has delivered a strong set of results notwithstanding the impact of COVID-19 onour operations and the wider economy, enabling the Board of Directors to continue to returnvalue to shareholders with a proposed dividend payment for the second year in a row.

This demonstrates the strong foundations we have built, as we continue to deliver against ourtarget of becoming a leading financial institution in Nigeria.

For the full year, we grew across key income lines. Net income after impairments grew 8.3%from ₦95.5bn to ₦103.4bn and translated into 2.8% growth in Profit Before Tax to ₦25.4bnfrom ₦24.7bn.The core of this performance is driven by the growth in our loan book, with 23.8% increase ingross loans, to ₦736.7bn from ₦595.3bn in 2019.

The pandemic accelerated trends in customer behaviour and we have seen rapid increase indigital adoption with a 38% YOY increase in active users on our UnionMobile channel withtotal active users now at 2.9 million. Our UnionOne and Union360 platforms for businessesgrew by 11% from 25,000 users to 27,700 users. 94% of transactions in the Bank are nowdone digitally, up from 89% in 2019.We also aggressively grew UnionDirect (our agent network) by 6x from 3,100 to 18,100 inline with our focus on our retail business.

With our investments yielding positive results, weare well positioned as a strong leader in the retail and digital space.In 2021, the Bank will focus on enhancing revenues and shareholder value by revving upcustomer acquisition, engagement and transactions through seamless customer journeysand an optimized service delivery platform.As I retire following eight years of rebuilding and repositioning this storied institution, I amconvinced that with the excellent management team and a clear strategy in place, UnionBank is well positioned to continue to compete and deliver value to its shareholders. Speaking on the FY 2020 numbers, Chief Financial Officer, Joe Mbulu said:“We are pleased with both our top and bottom-line performance in 2020, in light of theimpact of the pandemic and economic challenges.

Significant inflationary pressures and thetranslation of currency depreciation drove growth in our cost base, however we maintainedstrong control, limiting operating expense increase to 10% (₦77.9bn from ₦70.8bn), wellbelow the rate of inflation. Consequently, we saw marginal increase in our cost to income ratio to 75.4% from 74.1%.Our customer deposits hit a milestone during the year, crossing the ₦1tr mark to ₦1,131.1bnfrom ₦886.3bn in FY 2019, an increase of 27.1%. Low cost deposits were up by 17%,constituting 68% of total deposits helping to push cost of funds down by 1.4%.We continued to proactively manage our growing risk asset portfolio and recorded betterasset quality, with our NPL ratio improving from 5.8% to 4.0%. This achievement, combinedwith a solid capital adequacy at 17.5% and continued top-line growth, provides the platformfor strong growth going forward.

We will continue to grow our loan portfolio in 2021, which we expect to be a significant driverof growth, combined with our value chain synergies across our business which will drivecustomer and transaction growth during the year and beyond.Our UBUK subsidiary remains classified as “Available for Sale” as the sale processcontinues albeit delayed due to the pandemic-induced lockdowns