Nigeria’s Union Bank, the country’s second oldest financial institution, posted a substantial increase in net profit for 2022, driven primarily by robust net trading income, according to its recently published audited financial report. Net trading income, which constitutes earnings from financial instrument transactions, soared by 173.3% to NGN 23.6 billion. This growth outpaced that of interest income, typically the primary revenue source for banks, which saw an increase of 29.5% during the same period.
In contrast, many banks in the region bolstered their profits by raising lending rates, enabling them to charge higher fees for loans. Union Bank’s gross earnings climbed by 18% to NGN 209.1 billion, with non-interest income contributing two-fifths of the total.
The bank’s impairment charge, which represents provisions for potential borrower defaults, amounted to NGN 3.2 billion, in comparison to a net impairment reversal of NGN 34 million the previous year. Net fees and commissions experienced a slight decrease of 6.6% due to a decline in credit-related fees and commissions.
Mudassir Amray, Union Bank’s managing director, stated in a separate document, “In 2023, we will continue to focus on executing our strategic initiatives, which are aimed at exploring further opportunities to diversify our revenue sources while reinforcing our core business.” He added, “We also anticipate completing the merger of Union Bank of Nigeria and Titan Trust Bank, which commenced in 2022.”
The merger between the two financial institutions is expected to be finalized this year, following Titan Trust’s 2021 announcement of its intention to acquire Union Bank. A Union Bank board member, who requested anonymity, informed PREMIUM TIMES that the “Union Bank” corporate name would be retained after the merger.
Titan Trust Bank, a TGI Group conglomerate subsidiary backed by Dutch-Nigerian magnate Cornelius G. Vink, holds a 94.1% ownership stake in Union Bank. The bank’s after-tax profit for the period jumped by 131.6% to NGN 39.2 billion, up from NGN 16.9 billion a year earlier.
As indicated in its annual report, Union Bank will not pay dividends for 2022, similar to its decision in 2021.