Union Bank of Nigeria on 30th of march 2017 announced its intention to that launch a N50 billion rights issue in the second quarter of 2017 to maintain compliance with regulatory capital requirements. The bank announcement is coming after the shareholders approved the issue in December 2016.
The statement by the bank reads in part “Following approvals from our shareholders, Union Bank will launch a rights issue in the second quarter of 2017 to raise up to N50 billion in Tier 1 capital as it looks to accelerate business growth and position as a leading commercial bank in Nigeria,”
The bank announcement came after it released its results for 2016 financial year, where it reported that its gross earnings rose from N117.2 billion in 2015 to N126.6 billion in 2016 financial year. A growth of 8% in 2016. In the same pattern, after-tax profit also rose 8% to N15.4 billion compared with N14.3 billion in 2015. The growth in gross earning was driven by strong growth in interest income while the profit growth was supported by increase in foreign revaluation gains. The bank said.
The bank mentioned that its total assets rose by 19% to N1.25 trillion as against N1.05 trillion in the previous year. The growth in assets was caused mainly by the impact of the devaluation of the naira on foreign currency loan assets.
The bank credit impairment charges rose 67% to N16.6 billion; non-performing loan ration rose marginally to 6.91% compared to 6.67% in 2015.
For the year under review, Union Bank basic earnings per share rose to 20 kobo per share as against 11.81 kobo per share in 2015. No dividend has been announced for the 2016 financial year.
Emeka Emuwa, Union Bank’s Chief Executive Officer said “In 2016, we focused on executing our priorities across the different business segments, especially in the retail space, with an aggressive strategy to increase adoption of our alternate channels, Our success in this area, along with improved core interest earnings, contributed to pre-tax profit growth of 6 per cent, compared to 2015.”
“While the operating environment remains a challenge, we are focused on our 2017 priorities which include raising Tier 1 capital to execute our growth agenda across our retail, commercial and corporate businesses, particularly transaction banking and value chain,”.