DGAP-News: ADC's banking investment, Union Bank of Nigeria (UBN), reports half-year 2014 results ++ 55% year-on-year loan book growth in core bank ++ Transfo...

ADC's banking investment, Union Bank of Nigeria (UBN), reports half-year 2014 results ++ 55% year-on-year loan book growth in core bank ++ Transformation on track delivering improvement in bank performance

DGAP-News: ADC African Development Corporation AG / Schlagwort(e):

Halbjahresergebnis

ADC's banking investment, Union Bank of Nigeria (UBN), reports

half-year 2014 results ++ 55% year-on-year loan book growth in core

bank ++ Transformation on track delivering improvement in bank

performance

07.08.2014 / 15:34

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Union Bank of Nigeria (UBN) released its half-year 2014 financial results,

achieving continued profitability reflecting the positive effects of

restructuring activities over the last 18 months despite challenging

regulatory changes. Gross earnings at core bank level were down 5% from the

same period last year reflecting a lower net interest but higher

non-interest income, while profit before tax came in at NGN 6.6 billion

(EUR 29.7 million) down 43% year-on-year.

Net interest income at all banks in Nigeria was put under pressure during

the first half of the year due to declining treasury yields, which have

fallen 162bps since June 2013, due in part to a greater foreign demand for

treasury bills. UBN's asset base, at the beginning of 2014, has a

relatively high weighting in investment securities, which has gradually

been converted into new loan growth over the course of the year.

Furthermore, the cash reserve requirement (CRR) for public sector deposits

raised twice by the Central Bank of Nigeria since July 2013 from 12% to 75%

as of January 2014. CRR on private sector deposits also increased from 12%

to 15% effective April 2014, contracting net interest income further and

skewing year-on-year comparisons.

As a result, UBN's net interest income totaled NGN 24.5 billion (EUR 109.9

million) at core bank, a decline of 15% year-on-year, while non-interest

income increased to NGN 9.9 billion (EUR 44.6 million), up 26% from the

same period last year.

Net loans were up 55% to NGN 239.3 billion (EUR 1.1 billion) at core bank

level. Quarter-on-quarter loan volumes were also up with a Q2 2014 growth

of 18% compared to Q1 2014 as the bank shifted more of its assets from

treasuries into loans. On the liability side, deposits were down 2% at core

bank level, ending the half-year at NGN 472.4 billion (EUR 2.1 billion).

Deposit mobilization is a key priority of UBN's transformation efforts and

improved service delivery, channel management combined with optimization of

the bank's branch network should start to deliver expected deposit growth

in the coming quarters.

Operating expenses were up by only 2% at core bank level to NGN 28.1

billion (EUR 126.0 million) versus prior year figures. Cost-to-income ratio

ended the half-year at 81.6%, up from 75.2% at the same period last year.

The non-performing loan (NPL) ratio remained stable, increasing from 7.2%

in the first quarter to 7.3% at the end of the second quarter. Asset

recoveries improved significantly with NGN 3.5 billion (EUR 15.7 million)

recovered in H1 2014 compared to NGN 1.5 billion for H1 2013, which has

significantly reduced net impairments and should lead to lower NPLs in the

coming quarters.

The bank remains very liquid, with a gross loan-to-deposit ratio of 56% at

core bank level and a liquidity ratio of 48.2%, 18% above the CBN statutory

minimum of 30%. UBN finished the half-year with a Capital Adequacy Ratio

(CAR) of 20%, well above the regulatory requirement of 15%.

Karima Ola, Member of the Management Board of ADC commented: "UBN

transformation is gaining momentum and the benefits of significant

investments in talent management, operational processes and technology

infrastructure are increasingly being reflected in financial performance

with particularly strong performance on loan growth and asset recoveries.

UBN has made considerable progress on the disposal of non-core subsidiaries

and is implementing changes to its operating model to enable continued

focus on core banking notwithstanding the increasingly challenging

regulatory environment for Nigerian financial institutions. Management

remains focused on continued execution of transformation initiatives in

order to create underlying conditions for sustainable profitability at

UBN."

The UBN results publication will be made available for download via the

following link on the ADC website:

www.african-development.com/en/operations/banking-operations/union-bank-of

-nigeria-ubn/

About ADC

ADC African Development Corporation AG (ADC) (ISIN: DE000A1E8NW9;

Bloomberg: AZC.GR, www.african-development.com), is a German listed,

emerging pan-African banking group. ADC has a strong footprint in Southern

Africa via BancABC, a regional commercial banking platform operating in

Botswana, Mozambique, Tanzania, Zambia and Zimbabwe as well as exposure to

West Africa via Union Bank of Nigeria. In addition to its banking

operations, ADC has a private equity portfolio active in growth markets

across sub-Saharan Africa. ADC follows an active management approach with a

team of experts that comprise operational banking management, investment

banking and merchant banking expertise.

Kontakt:

Investor Relations

investor-relations@african-development.com

T +49 69 719 12 80 119

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07.08.2014 Veröffentlichung einer Corporate News/Finanznachricht,

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Sprache: Deutsch

Unternehmen: ADC African Development Corporation AG

Grüneburgweg 18

60322 Frankfurt/Main

Deutschland

Telefon: +49 69 719 12 80 119

Fax: +49 69 719 12 80 115

E-Mail: info@african-development.com

Internet: www.african-development.com

ISIN: DE000A1E8NW9

WKN: A1E8NW

Börsen: Freiverkehr in Berlin, Düsseldorf; Frankfurt in Open

Market (Entry Standard)

Ende der Mitteilung DGAP News-Service

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