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 ++ Transformation on track delivering improvement in bank performance

| Source: EQS Group AG
DGAP-News: ADC African Development Corporation AG / Key word(s): Half
Year Results
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

07.08.2014 / 15:34


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

The UBN results publication will be made available for download via the
following link on the ADC website:

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.

Investor Relations
T +49 69 719 12 80 119


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Language:    English                                               
Company:     ADC African Development Corporation AG                
             Grüneburgweg 18                                       
             60322 Frankfurt/Main                                  
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)                               
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