DGAP-News: ADC's banking investment, Union Bank of Nigeria

DGAP-News: ADC African Development Corporation AG / Key word(s): Quarter Results ADC's banking investment, Union Bank of Nigeria (UBN), reports continued profitability in Q1 2014 ++ Core banking activity emphasized with divestment of four non-core subsidiaries 07.05.2014 / 16:12 --------------------------------------------------------------------- ADC's banking investment, Union Bank of Nigeria (UBN) released its Q1 2014 financial results, delivering gross earnings of NGN 26.0 billion (EUR 116.7 million) at group level, down 11% year-on-year, and NGN 24.7 billion (EUR 110.9 million) at core bank level, slightly down compared to prior year period. Profit before tax came in at NGN 5.0 billion (EUR 22.5 million) at group level, down 35% year-on-year. At core bank level, profit before tax was NGN 4.4 billion (EUR 19.9 million), down 4% from prior year results. Group net interest income at the end of March 2014, totaled NGN 13.0 billion (EUR 58.2 million), a decline of 12% compared with Q1 2013, while core bank net interest income of NGN 12.6 billion (EUR 56.5 million) declined 8%. The reduction in net interest largely reflects declines in Nigerian treasury yields, since 64% of UBN's interest earning assets at the end of Q1 are held in either investment securities or interest earning cash. Group and core bank non-interest income increased to NGN 6.6 billion (EUR 29.5 million) and NGN 6.3 billion (EUR 28.1 million) respectively, boosted by disposals. UBN divested four of its non-core subsidiaries during the quarter, regulatory approval of these sales are expected during the course of the year. Net loans were down 4% to NGN 220.5 billion (EUR 972.8 million) at group level compared to year-end 2013 financial results and down 3% to NGN 203.1 billion (EUR 896.0 million) at core bank level. Deposits decreased by 3% at group level from year-end and by 5% at core bank level, ending the quarter at NGN 457.7 billion (EUR 2.0 billion). The cash reserve requirement on public sector funds increased to 75% in January 2014; reducing the bank's yield on public sector deposits. Operating expenses were down by 2% at core bank level to NGN 13.7 billion (EUR 61.6 million) versus prior year figures. The cost-to-income ratio ended the quarter at 76.0%, up from 75.3% in the same period of last year. Gross loan-to-deposit ratio was 52% at group level and 49% at core bank level. UBN's liquidity ratio remains strong, with a liquidity ratio of 63%. The bank's capital base remains strong, notwithstanding the growth in risk weighted assets that started in 2013, resulting in a Capital Adequacy Ratio (CAR) of 24%, well above the regulatory requirement of 15%. Karima Ola, member of the Management Board of ADC commented, "UBN's Q1 2014 results show the group maintaining its profitability while delivering on some key operational metrics that support the bank's transformation and new strategy. UBN's rollout of its branch optimization program is on-track, with a total of 66 branches expected to be remodeled by the end of this year; completed branches to date are yielding positive financial results, outperforming the rest of the branch network. UBN expects 30% loan growth throughout the year, as well as remaining on track for delivery of key transformation and profitability goals. We expect Nigeria's robust 2014 economic fundamentals to support loan and deposit growth and improve the outlook for impairments for the sector, which should also partially offset pressure on income from regulatory change to date." 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. Contact: Investor Relations investor-relations@african-development.com T +49 69 719 12 80 119 End of Corporate News --------------------------------------------------------------------- 07.05.2014 Dissemination of a Corporate News, transmitted by DGAP - a company of EQS Group AG. The issuer is solely responsible for the content of this announcement. DGAP's Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Media archive at www.dgap-medientreff.de and www.dgap.de --------------------------------------------------------------------- Language: English Company: ADC African Development Corporation AG Grüneburgweg 18 60322 Frankfurt/Main Germany Phone: +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 Listed: Freiverkehr in Berlin, Düsseldorf; Frankfurt in Open Market (Entry Standard) End of News DGAP News-Service --------------------------------------------------------------------- 267004 07.05.2014