Union Bank of Nigeria plc got the approval of its shareholders to raise additional share capital up to the sum of N50 billion by way of rights issue to its existing shareholders.
The N50 billion rights issue, subject to the company obtaining all required regulatory approvals, was part of the ordinary resolutions at the company’s Extraordinary General Meeting (EGM) held Wednesday in Lagos.
The bank also sought and received the approval of its shareholders as part of its special resolutions to increase the bank’s authorised share capital from N9.511 billion to N17.5 billion.
The bank’s share price steadied at N4.47kobo at the Nigerian Stock Exchange Wednesday. Its trading information at the local bourse showed the bank’s market capitalisation at N75.703 billion, while shares outstanding were 16.935 billion units.
In attendance at the EGM were the bank’s board of directors led by its chairman Cyril Odu, and representatives from Atlas Mara, which owns at least 21 percent stake in Union Bank Nigeria plc.
Odu recalled that at the bank’s 47th annual general meeting, the bank assured shareholders of the board and management commitment to delivering consistent growth in earnings.
At the EGM, the shareholders authorised that the board of directors should approve, sign and/or execute all documents, appoint such professional parties and advisers, perform all such other acts and do all such other things as may be necessary to give effect to the above resolutions, including without limitation, complying with the directives of any regulatory authority.
In the third quarter (Q3) to September 30, 2015, the bank reported profit before tax (PBT) of N13.2 billion (N13.2bn in 9-month 2015), excluding gain on sale of subsidiaries, it increased by 27 percent to N12.4 billion (N9.8bn in 9-month 2015).
Gross earnings increased by 7% to N91.4billion (N85.4billion in 9 month 2015); excluding gain on sale of subsidiaries, it increased by 11% to N90.6billion (N2.0bn in 9 month 2015).
The bank’s interest income according to the unaudited results for the nine months period ended September 30, 2016 rose by 6% to N69.2billion (N65.3billion in 9month 2015) driven by improved asset yields from 14.2% in 9month 2015 to 16.1% in 9month 2016.
Interest expense declined by 14% to N22.8billion (N26.5billion in 9month 2015), driven by lower funding costs. Primary cost of funds declined to 5.27% in 9month 2016 from 6.58% in 9 month 2015.
Net revenue before impairment increased by 20% to N46.4billion (N38.8billion in 9month 2015), as a result of 6% interest income growth and 14% interest expense growth. The bank’s net interest margin grew from 8.76% to 9.97%
Impairment was also up N8.4billion to N12.8billion (N4.4billion in 9 month 2015) with non performing loan (NPL) ratio increasing to 9.4% (7% in December 2015).
Non-interest revenue increased 10% to N22.1billion (N20.1billion in 9month 2015); excluding gain on sale of subsidiaries, revenues are up 28% to N21.4billion (N16.7billion in 9month 2015) led by revaluation gains and e-business fees.
Operating expenses stood at N42.7billion (N41.3billion in 9month 2015) in spite of current inflationary pressures and consistent with investments in technology and network infrastructure.
Gross loans rose by 39% to N515.4billion (N370.9billion in December 2015); driven by 13% local currency loan growth and 26% impact of the revaluation of foreign currency loans. The bank’s customer deposits increased by 9 percent to N618.30 billion as against N569.1billion in the year ended December 2015.
Union Bank aims to leverage and foster innovation to drive long-term value creation for the bank and shareholders.
