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2020 Annual Report & Financial Statements

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2020 Annual Report & Financial Statements Annual Report & Financial Statements | 1 2 | Annual Report & Financial Statements 2020 ANNUAL REPORT & FINANCIAL STATEMENTS Annual Report & Financial Statements | 3 CONTENTS Notice of 52nd Annual General Meeting 5 Corporate Profile 6 Union Bank at a Glance 7 Board Chair’s Statement 8 Chief Executive Officer’s Statement 12 Corporate Information 16 Management Team 17 The Board 18 Corporate Governance Report 25 Directors’ Report 36 Statement of Directors’ Responsibilities 50 Report of the Statutory Audit Committee 51 Statement of Corporate Responsibility for the Financial Statements 52 Independent Auditor’s Report 54 2020 Financial Statements 59 Other National Disclosures 181 Sales and Service Locations 186 Proxy Form 191 E-Dividend Form 192 4 | Annual Report & Financial Statements UNION BANK OF NIGERIA PLC. NOTICE OF 52ND ANNUAL GENERAL MEETING NOTICE is hereby given that the 52nd Annual General Meeting of Union Bank of Nigeria Plc will be held in The Auditorium, Stallion Plaza (9th Floor), 36 Marina, Lagos on Tuesday 4th May 2021 at 11.00 a.m. to transact the following business: ORDINARY BUSINESS 1. To receive and adopt the Audited Group Financial Statements for the financial year ended 31st December 2020 together with the reports of the Directors, Auditor, Board Appraiser and Statutory Audit Committee thereon. 2. To declare a dividend for the financial year ended 31st December 2020. 3. To elect/re-elect Directors. 4. To authorise the Directors to fix the remuneration of the Auditor. 5. To disclose the remuneration of Managers of the Bank. 6. To elect/re-elect members of the Statutory Audit Committee. NOTES a) PROXY In compliance with the public safety directives of the Federal Government of Nigeria and the Lagos State Government on mass/public l Meetings of Public Companies using Proxies, attendance at this meeting shall be by way of proxy. Shareholders are advised that the meeting will be streamed live (vide a link to be circulated by the Registrars) and, voting at the meeting shall be through the proxies whose names are provided below: 1. Mrs. Beatrice Hamza Bassey - Board Chair 2. Mr. Emeka Okonkwo - Chief Executive Ocer 3. Mr. Eric Akinduro - Shareholder 4. Mrs. Bisi Bakare - Shareholder 5. Chief Innocent P. Nwokocha - Shareholder 6. Chief Joseph Okelana - Shareholder 7. Dr. Farouk Umar - Shareholder A member of the Company entitled to attend and vote at the meeting is entitled to appoint a proxy to attend and vote in its, his or her stead. A proxy need not be a member of the Company. A proxy form is supplied with this Notice. For completed proxy forms to be valid for the purpose of the meeting, they must be duly stamped by the Commissioner of Stamp Duties and deposited at the oce of the Company Registrar, CardinalStone Registrars Limited, 335/337 Herbert Macaulay Way, Yaba, Lagos or sent to [email protected] not less than forty-eight (48) hours before the meeting. The cost of stamping would be borne by the Bank. b) STATUTORY AUDIT COMMITTEE Any member may nominate a shareholder for election as a member of the Statutory Audit Committee by giving notice in writing of such nomination, attaching the curriculum vitae of the nominee to the Company Secretary at least twenty-one (21) days before the Annual General Meeting. Shareholders are enjoined to note that the Securities and Exchange Commission and the Financial Reporting Council of Nigeria require members of the Statutory Audit Committee to have basic financial literacy and an ability to read financial statements. c) CLOSURE OF REGISTER The Register of Members and Transfer Books of the Company closed from 1st April 2021 to 8th April 2021 (both days inclusive) for the purpose of preparing an updated Register of Members. d) PAYMENT OF DIVIDEND If the dividend of twenty-five (25) Kobo per N0.50 ordinary share recommended by the Board of Directors is approved by members at the Annual General Meeting, the dividend payments will be made on 4th May 2021 to members whose names appeared in the Register of Members at the close of business on 31st March 2021. e) RIGHT OF SHAREHOLDERS TO ASK QUESTIONS Pursuant to Rule 19.12 (c) of the Nigerian Stock Exchange’s Rulebook, kindly note that it is the right of every shareholder to ask questions at the Annual General Meeting and in writing prior to the meeting. We therefore urge that such questions be submitted to the Company Secretary not later than two (2) weeks before the date of the meeting. f) 2020 FINANCIAL STATEMENTS (WEB LINK) Shareholders can access the 2020 Financial Statements on the Bank’s website by using the following link: https://www.unionbankng.com/annualreport2020 BY ORDER OF THE BOARD Somuyiwa Adedeji Sonubi FRC/2013/NBA/00000002061 Company Secretary Union Bank of Nigeria Plc Stallion Plaza 36 Marina Lagos Dated this 23rd day of February 2021 Annual Report & Financial Statements | 5 CORPORATE PROFILE Union Bank was established in 1917 and is one of Nigeria’s longest standing and most respected financial institutions. We offer a portfolio of banking services to individual, SME, commercial and corporate clients, and our vision is to be Nigeria’s most reliable and trusted partner. Our offerings include savings and deposit account services, funds transfer, foreign currency domiciliation, loans, overdrafts, equipment leasing and trade finance, amongst others. These services are provided through our electronic channels, including online banking, mobile banking, debit cards and point-of-sale terminals, and an extensive network of over 270 sales and service centres and over 937 automated teller machines spread across Nigeria. Union Bank’s ownership structure comprises Union Global Partners Limited (UGPL), a consortium of strategically aligned investors with 65.10% shareholding, Atlas Mara Ltd with 25.58%, and a diverse group of shareholders that account for the remaining 9.32%. Union Bank employs all its resources in the achievement of its mission to make lives better by delivering the simplest, smartest solutions and guaranteeing the best experience every time, with a strategy focused on the right talent, optimised processes and platforms, robust technology and a re-energised brand. 6 | Annual Report & Financial Statements UNION BANK AT A GLANCE Our Vision N2.07 Trn N247.52 Bn We are Nigeria’s most reliable Total Assets Total Equity and trusted partner. Our Mission 6.6 m 2,342 We make lives better by Customers Employees delivering the simplest, smartest solutions and guaranteeing the best experience every time. Our MVPs Our Footprint (Most Valuable Players) 273 Customers… Sales & Service Centres We make your lives better – less banking, more living Communities….. We positively impact our society and build up our 937 people – sustainable future Active ATMs Stakeholders…. We deliver value – growth beyond expectations 6,052 Active POS Machines 2.9m Active Mobile Users 1.7m Active Online Users 14,232 Active Agents Annual Report & Financial Statements | 7 BOARD CHAIR’S STATEMENT Introduction Distinguished shareholders, ladies and gentlemen: On behalf of the Board of Union Bank of Nigeria (“Union Bank” or “The Bank”), it is my pleasure to welcome you all to this year’s Annual General Meeting which is taking place during the continuing challenging times brought upon us by the Coronavirus (COVID-19) pandemic. It is a great privilege to lead the Board and present the operating results and key achievements of our Bank for the financial year ended 31st December 2020. 2020 was an unprecedented year. The year started with the history-making no deal “Brexit” as the United Kingdom officially left the European Union, triggering an 11- month transition period. Around the same period, a new virus called COVID-19 was spreading across countries, and on 11th March, 2020, the World Health Organisation (“WHO”) declared it a pandemic, resulting in the shutdown of the global economy as countries scrambled to contain the spread of the virus. Still yet around the same period, Saudi Arabia triggered an oil price war with Russia as the two nations failed to reach a consensus on oil production levels which led to a crash in global oil prices. 2020 also saw the United States-China trade war slowing down trade activities between both superpowers with impact on global trade. These events impacted the operating environment globally and locally, and affected businesses big and small, and changed our way of life in fundamental ways. Even as I write this letter, the pandemic continues to take its toll across the globe. The Global Landscape The events of the year 2020 saw global GDP contract by an estimated 4.3% in 2020 compared to a growth of 2.9% in 2019, according to the World Bank. The global shutdown and travel restrictions triggered the grounding of the aviation, hospitality and tourism industries, thereby further compounding already depressed oil prices. The impact of the COVID-19 pandemic and associated lockdowns disrupted economic activity across each part of the globe. After a decade of expansion, the United States (US) economy, which is largely dependent on consumer spending, declined in 2020 by 3.5% (compared to 2.2% growth in 2019). Although economic growth in the United Kingdom had slowed since the 2016 Brexit referendum vote, the situation worsened in 2020 as GDP contracted by 9.8% according to the IMF, plunging the country to its deepest recession since World War II. In the emerging markets, the Chinese economy, which was one of the fastest growing GDPs in the world, saw a setback; its economic growth abruptly slowed down to 1.9% in 2020 compared to 6.1% in 2019. Sub-Saharan Africa GDP contracted by an estimated 3.7% in 2020, and as a result, per capita income shrank by 6.1% during the year. Hardest hit were the countries that recorded high infection rates including those heavily dependent on travel and tourism, and commodity exporters - particularly oil exporters.
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