The Union Bank of Nigeria has reported a drop in 2020 profit by N1.203 billion, following a sharp drop in economic activities due to COVID-19 pandemic.
According to the audited financials of the lender published by the Nigerian Stock Exchange on Thursday, the bank’s gross earnings declined 3.75 per cent to N160.292 billion from N166.545 billion a year earlier.
There was, however, a surge in total expenses by 10.5 per cent from N71.017 billion to N78.467 billion hurt earnings.
Profit before income tax climbed 4.5 per cent from N24.844 billion to N25.974 billion. But a sharp rise in Union Bank’s loss from discontinued operations net of tax as well as income tax spend contracted its full year profit.
The loss resulted from the tier 2 lender discontinued operations of ‘subsidiaries held for sale in line with the bank’s divestment plan.’ Union Bank is about consummating sale of Union Bank UK and is currently awaiting regulatory approval.
Profit after tax shrank by 6.1 per cent from N19.875 billion to N18.672 billion.
Shareholders fund edged up by 4.7 per cent from N252.342 billion to N264.318 billion.
“The core of this performance is driven by the growth in our loan book, with 23.8% increase in gross loans, to ₦736.7bn from ₦595.3bn in 2019,” said CEO Emeka Emuwa
“The pandemic accelerated trends in customer behaviour and we have seen rapid increase in digital adoption with a 38% YOY increase in active users on our UnionMobile channel with total active users now at 2.9 million.’
Meanwhile, the bank’s board of directors is proposing a dividend of N0.25 per share for the 2020 financial year, the same amount it declared for the preceding year.
Investors whose names appear on the company’s register of members by March 31 will be eligible for the dividend payout, the lender said in a separate note.
Union Bank’s shares were trading at 13:18 West African Time in Lagos on Friday at N5.05 per share, recording no movement.