ADC's investment, Union Bank of Nigeria (UBN), announces positive first half year 2012 results
ADC increases its representation in UBN
UBN delivered H1 2012 results driven by growth in net fee income and lower operating costs. At the bank level, UBN reversed last year's loss of EUR 219.1 million (NGN 44.0 billion) coming in at H1 2012 net profit of EUR 67.5 million (NGN 13.6 billion), with a return on equity of 15.1% and 14.4% at group and bank level respectively.
Net interest income rose 1.9% for H1 2012 (EUR 155.5 million; NGN 31.2 billion) while net fee and commission income was up 24.3% (EUR 33.0 million; NGN 6.6 billion) year on year. Total operating expenses fell by 71.0% year on year to EUR 157.8 million (NGN 31.7 billion), with UBN's cost to income ratio improving significantly to 68.0% in H1 2012 from 141.0% in H1 2011, albeit partially due to a lower income base in 2011.
UBN's customer deposit base grew to EUR 2.2 billion (NGN 441.3 billion) on bank level, which shows an increase of 10.4% between year-end 2011 and reporting date. The loan book came in at EUR 664.8 million (NGN 133.5 billion) at the end of H1 2012. The net interest margins showed an increase of 120 basis points from 12.4% in H1 2011 to 14.6% in H1 2012.
UBN's transformation is on track, driven by a fortified management team, who continue to upgrade staff quality, operating infrastructure, customer base and operational efficiency.
ADC initially invested USD 30 million into a consortium of investors which represents an indirect stake of 3.9% in UBN. This exposure has been increased via a call option and ADC (including co-investments that are managed by ADC) now represents a stake of 12.2% in UBN. This call option was structured through a USD 3 million equity investment of ADC and is effective until ADC exits its investment in UBN.
ADC African Development Corporation GmbH & Co. KGaA
ADC African Development Corporation ("ADC") (ISIN: DE000A1E8NW9; Bloomberg: AZC.GR, www.african-development.com), was established in September 2007 and is on its way to become one of the leading banking groups in sub-Saharan Africa, active in corporate and retail banking and proprietary investments. The company's success is primarily due to its local management team, which follows international best practice principles to further develop its operational companies, and implements international best practice processes to increase their profitability. ADC was amongst the first international emerging market investors to be integrated into the insurance solution offered by the Multilateral Investment Guarantee Agency ("MIGA"), a member of the World Bank Group, primarily due to its strong operational approach and adherence to the highest ethical standards. This insurance offers protection against a variety of political risks, in particular the risk of radical political change.