Union Bank, Nigeria’s second oldest financial institution, reached a revenue milestone in 2021, with gross earnings for the year reaching an all-time high of N177.3 billion, according to audited financials obtained from the Nigerian Exchange on Wednesday.
The achievement was based on a more-than-doubling increase in cash from recovered debt totaling up to N15.9 billion.
However, earnings growth was insufficient to protect the bottom line from pressure from interest paid on securities, including bonds, as well as deposits from customers and other lenders, causing profit to fall below the previous year’s level.
The lender spent N13.8 billion more on interest expenses in fiscal year 2021 than it did in fiscal year 2021.
Union Bank stated in a separate document providing key financial highlights that turnover increased by 8% from N164.1 billion a year ago, aided largely by non-interest income, which increased by 26.7 percent.
Following an improvement to our operating and go-to-market model to deliver better performance and efficiency by leveraging our network across the regions, we are increasing customer engagement and product penetration, which is translating into higher customer revenues across geographies,” said CEO Emeka Okonkwo.
Pre-tax profit fell by more than one-fifth to N20.7 billion, while after-tax profit was N16.9 billion, 9.4% lower than the previous year.
This resulted in a profit margin of 9.54 percent, which measures how much of revenue has been converted to profit.
Titan Trust Bank, controlled by Tropical General Investment, an international investment firm focused on emerging markets, received approval-in-principle in December to acquire an 89.4 percent stake in Union Bank, and will look to replicate its success in digital banking to drive growth in the latter once the acquisition is completed.