… Upgrades to PCIDSS v4.0 Certification
Despite the challenging environment following the Central Bank of Nigeria’s intervention in January 2024, which led to heightened customer concerns, Union Bank of Nigeria has reported a profit before tax of N79.8 billion on gross earnings of N333 billion during the half year ended June 30, 2024 compared with a profit before tax of N66.5 billion on gross earnings of N210.5 billion during the corresponding period of 2023, representing a growth of 20 percent in profit before tax and 58 percent in gross earnings.
The Bank said in a statement that, ”This accomplishment demonstrates the bank’s resilience and commitment to delivering results in uncertain times.”
Commenting on the results, Yetunde B. Oni, Managing Director and Chief Executive Officer of the Bank , said: “I am pleased that Union Bank of Nigeria has delivered a progressive financial performance in the first half of the year, with a significant boost in Net Interest Income, Net Operating Income, and Net Trading Income.
“At the beginning of the year, our top priority was to keep the momentum going with a strong focus on stability following the intervention of the Central Bank of Nigeria. We also continued with the planned strategic priorities, which are centred around scaling our digital play, driving hypergrowth in target sectors, optimising our wholesale bank structure, aggressively ensuring recoveries of past-due obligations, and orchestrating a robust ecosystem play through existing and new partnerships.
“So far, we are seeing the direct impact of our strategy on our financial performance. We achieved a substantial increase in Gross Earnings by 58% to ₦333bn compared to ₦210.5bn in H1 2023. Net Operating Income after Impairments increased by 32% to ₦143.6bn from ₦108.5bn in H1 2023, attributed to enhanced interest income, fees, commissions, and margin expansion. Similarly, we achieved Profit Before Tax (PBT) of ₦79.8bn, representing 20% growth compared to ₦66.5bn in H1 2023.
“In pursuit of our strategic priority to scale our digital play, Union Bank successfully launched its digital lending platform, UnionKash. This platform enables existing and new-to-bank customers to access soft loans easily. Since its launch in the first quarter of the year, over 14,000 customers have successfully accessed soft loans through the USSD code *826*41#.
“These achievements reflect the remarkable resilience and dedication of our staff, who have been instrumental in navigating the challenges of a demanding operating environment. Despite the pressures of inflation, exchange rate volatility, and increased operational costs, our team has remained steadfast and committed to delivering excellence. I extend my sincere appreciation to all our employees for their hard work and unwavering dedication, which have been critical to our success in the first half of 2024.
“I also want to express our deep gratitude to our customers, whose loyalty to the Union Bank brand has been unwavering. Their trust and continued patronage have been vital to our success, and we remain committed to serving them with excellence. Additionally, we acknowledge the invaluable support from our regulators as we navigated the complexities of our operating environment.
“In line with the realities of our environment, the bank has initiated the process of recapitalisation. The Banking Sector Recapitalisation Program, introduced by the Central Bank of Nigeria (CBN), mandates banks to increase their minimum paid-in common equity capital to a specified amount by April 2026, per their license category and authorisation. This strategic initiative is not only aimed at aligning our capital adequacy with regulatory standards but also at surpassing them, thereby fortifying our financial stability and positioning us to capitalise on emerging market opportunities.
“As we move forward, our focus remains on building a controlled, compliant, and profitable organisation. We are committed to maintaining strong governance frameworks, ensuring regulatory compliance, and driving sustainable profitability. These pillars will not only fortify our financial stability but also position us to capitalise on emerging opportunities in the market. I am confident that with our continued focus on these priorities, we will sustain our positive momentum and deliver long-term value to our stakeholders.”
Speaking on the H1 2024 numbers, Acting Chief Financial Officer Oluwagbenga Adeoye said:
“Our H1 2024 financial performance is a testament to the Bank’s resilience because it came on the backdrop of a slow start, occasioned by the high inflationary environment, exchange rate volatility, increased power costs and other factors.
“Nevertheless, we were not entirely insulated from these shocks as Non-Interest Income reduced marginally in H1 2024 by 3% to ₦108.3bn from ₦112.1bn in H1 2023 due to foreign exchange revaluation loss. Operating Expenses increased by 52% to ₦63.8bn against ₦42bn in H1 2023, majorly due to the high inflationary environment, increased power cost and increased non-discretionary regulatory cost. Notwithstanding, our Cost to Income Ratio remains below 50% at 44% compared to 39% recorded in H1 2023 on the back of implementing planned cost-efficiency initiatives.
“The Bank continued to grow its loan book cautiously, with gross loans increasing by 24 percent to ₦1.93 trillion compared to ₦1.55 trillion in December 2023, customer deposits grew marginally by one percent to ₦2.36 trillion from ₦2.34 trillion in December 2023, reflecting the impact of socio-economic pressures on our operating environment.
“In the second half of the year, we will focus on improving efficiency and driving our non-interest income. We are confident that we will finish the year strong and sustain the returns on equity and returns on assets, which stood at 40.6% and 3.68%, respectively.”
Further analysis of the Bank’s performance during the reviewed period showed that its net operating income after impairments rose to N143.6 billion from N108.5 billion in 2023, representing a growth of 32 percent, non-interest income reduced marginally by three percent to ₦108.3 billion from N112.1 billion during the corresponding period of 2023 due to foreign exchange revaluation loss.
Operating expenses moved up remarkably by 52 percent to ₦63.8 billion from N42 billion in the corresponding period of 2023, resulting from the inflationary environment, increase in power costs and increase in non-discretionary regulatory costs.
In the same vein, gross loans increased by 24 percent to ₦1.93trn from N1.55trn in December 2023 while customer deposits went up marginally by one percent to ₦2.36 trillion from N2.34 trillion in Dec 2023, reflecting the impact of the challenges posed by the socio-economic environment on its operations.
Meanwhile, the bank has received another significant recognition with its recent attainment of the Payment Card Industry Data Security Standard (PCIDSS) version 4.0 certification.
This notable achievement, which is an upgrade from the previously awarded Payment Card Industry Data Security Standard (PCIDSS) version 3.2, recognises the Bank’s adherence to the highest data security standards and diligent compliance with industry guidelines regarding payment card fraud prevention and reduction in unauthorised card usage.
The PCI-DSS is the premier Information Security standard for payment cards. It aims to improve the controls of cardholder data and related payment systems to reduce unauthorised use and fraud.
Commenting on the Bank’s latest attainment, Chief Information Security Officer at Union Bank, Francis Mojoyinola, said:
“Union Bank is delighted that we have again been acknowledged for the considerable work we have put into attaining better controls and card payment standards. This certification once again demonstrates our ability to provide top-of-the-line cybersecurity standards and solutions that help us manage and reduce risk exposure. All of this could not have been achieved without the Bank’s collaborative, dedicated, and competent team of IT and data security experts.
Our esteemed customers will continue to be our focus as we strive to build a secure data security structure that enables safe, simpler, and straightforward innovative banking services.”
Union Bank was given this certification by CyberCube Services Pvt. Ltd., a leading technology firm that specialises in providing cutting-edge cybersecurity solutions to businesses across various industries.
Their extensive work in cybersecurity services, including cybersecurity compliance management and vulnerability management, has distinguished them as a leading cybersecurity firm serving clients across multiple industries.
The company’s commitment to innovation and excellence has earned it a reputation as a trusted partner in the fight against cybercrime.
This, along with other of the Bank’s certifications, like the MSECB information security management systems ISO/IEC 27001:2022, ISO 22301:2019, ISO/IEC 20000-1:2018, and the International Organisation for Standardisation ISO/IEC 27001:2013, reiterates Union Bank’s commitment to upholding data and cyber security standards and maintaining its reputation as one of Nigeria’s most trustworthy financial institutions.
