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Union Bank returns to profitability, posts N3bn Q1 profit

By Peter Egwuatu & Providence Obuh
Union Bank Nigeria Plc has bounced back to profitability, announcing a profit after tax of N3.33 billion in its first quarter ended, 2010 financial year.

The bank had declared a loss after tax of N281.2 billion in its 2009 financial year. This was in line with its resolve to clean up its books, following the intervention of the Central Bank of Nigeria (CBN) last August.

According to the results, released to the Nigerian Stock Exchange (NSE), Monday, the bank recorded gross earnings of N34.24 billion as against N51.26 billion for the three months ended March 30, 2009.

The bank posted profit before tax of N3.56 billion in the first quarter of 2010 compared with a loss of N90.273 billion in 2009, which was before the intervention of the banking watchdog. In the same vein, profit after tax stood at N3.33 billion as against a profit of N97.8 billion in the corresponding period of 2009.

Market analysts hailed the performance of the bank, saying it is a reflection of the efforts the new management has put into reviving the financial conglomerate.

According to them, considering the image battering Union Bank and the other banks rescued by the CBN went through, the performance is highly commendable and showed the high level of customer loyalty the bank still enjoys.
Responding to the performance of the bank, President, Association for the Advancement of the Rights of Nigerian Shareholders (AARNS) Dr. Faruk Umar, said it is very encouraging and it shows that the Central Bank of Nigeria (CBN) is succeeding in reviving the rescued banks.

“It is a good development and it shows   that the apex bank is succeeding in the task of reviving the banks. My advice is that the management of the banks should not derail and should remain determined to putting the banks back on their feet and put smiles on the faces of shareholders,” he said.

Speaking in the same vein, the Chairman, Ibadan Zone Shareholders Association, Chief Oluremi Oyepeju, said the results showed that Nigerians are capable of managing the banks and make profit. He therefore, called on the CBN not to bring in any foreign investors.

“I am one of the people who has been calling for the rescued banks to publish their results and the result of Union Bank is encouraging. It has proved that Nigerian managers and investors are capable of resuscitating these  banks.

“There is therefore, no need for the CBN to sell the banks to any foreign investor. The CBN should allow the existing shareholders to recapitalise the banks, ” he said.

The Group Managing Director/Chief Executive, Mrs. Funke Osibodu, recently expressed optimism that Union Bank would regain its rightful position in the banking industry now that its books have been cleaned up.

She said that the bank is poised to exploit the business opportunities arising from the gradual recovery in the global economy, stressing the need for the esteemed customers to remain steadfast with the bank and increase their patronage.

When the new management assumed office last year, Osibodu said the focus would be specifically on risk management/control, marketing and business development.

Going by the profit before tax of 12 banks based on their 2010 first quarter results (First Bank – N15.42billion, Zenith Bank – N13.2billion, GTBank N13.01billion, ETI – N8billion, Access Bank – N5.29billion, Syke Bank – N3.17billion, Stanbic IBTC –N2.47billion, Diamond Bank – N2.06billion, Sterling Bank – N1.4billion, Ecobank Nigeria – N1.21billion, Finbank – N1.165billion and Wema Bank – N764million), Union Bank emerged the sixth with a profit before tax of N3.56billion.


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