Yetunde Oni, the Managing Director and Chief Executive Officer of Union Bank of Nigeria, announced that the bank has begun a recapitalisation process.
This was revealed as the bank published its half-year financial results, which showed a 58.19% increase in gross earnings, reaching N333 billion, compared to N210.5 billion in the same period in 2023. Additionally, profit before tax rose to N79.8 billion from N66.5 billion the previous year.
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In late March, the Central Bank of Nigeria (CBN) directed banks operating within the country to raise their capital base to support President Bola Tinubu’s $1 trillion economic projection.
The CBN mandated commercial banks with international authorization to increase their capital base to N500 billion, national banks to N200 billion, and banks with regional authorization to reach a N50 billion capital floor.
At the start of the year, the CBN dissolved Union Bank’s board and appointed a new Managing Director and Executive Director for the bank.
Oni stated, “In response to the current economic environment, the bank has initiated a recapitalisation process. The CBN’s banking sector recapitalisation program requires banks to increase their minimum paid-in common equity capital by April 2026, according to their license category and authorization.
This strategic move not only aims to meet regulatory capital adequacy standards but also to exceed them, thereby strengthening our financial stability and positioning us to take advantage of emerging market opportunities.”
She added, “Our focus remains on building a controlled, compliant, and profitable organization. We are committed to maintaining robust governance frameworks, ensuring regulatory compliance, and driving sustainable profitability.
These foundations will not only enhance our financial stability but also position us to seize new market opportunities. I am confident that by continuing to focus on these priorities, we will maintain our positive momentum and deliver long-term value to our stakeholders.”
Regarding the bank’s financial performance, Oni expressed satisfaction with the progress made in the first half of the year, despite challenges stemming from the CBN’s intervention.
She highlighted the bank’s strategic priorities, which include scaling digital services, driving growth in key sectors, optimizing wholesale banking, aggressively recovering past-due obligations, and developing a robust ecosystem through partnerships.
Union Bank’s acting Chief Financial Officer, Oluwagbenga Adeoye, emphasized that the H1 2024 financial performance demonstrates the bank’s resilience, despite starting slowly due to a high inflationary environment, exchange rate volatility, increased power costs, and other factors.
Although non-interest income decreased slightly by 3% to N108.3 billion from N112.1 billion in H1 2023 due to foreign exchange revaluation losses, operating expenses increased by 52% to N63.8 billion from N42 billion in H1 2023, driven mainly by inflation, higher power costs, and increased non-discretionary regulatory costs.
Despite these challenges, the bank’s cost-to-income ratio remained below 50%, standing at 44% compared to 39% in H1 2023, thanks to the implementation of cost-efficiency initiatives.
The bank also saw cautious growth in its loan book, with gross loans increasing by 24% to N1.93 trillion compared to N1.55 trillion in December 2023.
Customer deposits grew marginally by 1% to N2.36 trillion from N2.34 trillion in December 2023, reflecting the impact of socio-economic pressures on the operating environment.
