Union Bank of Nigeria Plc IFRS FINANCIAL STATEMENTS 31 March ...

Union Bank of Nigeria Plc IFRS FINANCIAL STATEMENTS 31 March 2018

Union Bank of Nigeria Plc and Subsidiary Companies Consolidated and separate financial statements for the period ended 31 March 2018

Consolidated and Separate Statements of Profit or Loss and Other Comprehensive Income For the period ended 31 March 2018 Group Mar.2018 N million

Mar.2017 N million

Mar.2018 N million

Mar.2017 N million

39,466

34,309

37,735

33,022

1 1

31,674 (13,843)

27,698 (13,069)

30,334 (13,683)

26,621 (12,980)

5(a)

17,831 (2,349) 15,482

14,629 (320) 14,309

16,651 (2,136) 14,515

13,641 (316) 13,325

3,276 3,345 304 867

2,294 1,138 1,257 1,922

3,114 3,310 304 673

2,168 1,068 1,257 1,908

7,792 23,274

6,611 20,920

7,401 21,916

6,401 19,726

-

-

-

-

23,274 (7,926) (1,632) (8,309)

20,920 (7,853) (1,396) (7,010)

21,916 (7,404) (1,564) (7,899)

19,726 (7,393) (1,330) (6,792)

(17,867)

(16,259)

(16,867)

(15,515)

5,407

4,661

5,049

4,211

(119) 5,288

(142) 4,519

(50) 4,999

(42) 4,169

421 (1,603) (978) 4,310

230 621 851 5,370

(1,384) (1,180) 3,819

698 698 4,867

Notes Gross earnings Interest income Interest expense Net interest income (NRFF) Net impairment charge for credit losses Net interest income after impairment charge for credit losses Net fee and commission income Net trading income Cash recoveries Other operating income

2 3 4

Non interest income (NII) Operating income Net impairment write-back/(loss) on other financial assets Net operating income after net impairment write-back/(loss) on other financial assets Personnel expenses Depreciation and amortisation Other operating expenses

5(a)

6 7

Total expenses Profit before income tax Income tax expense Profit for the period

8

Foreign currency translation differences for foreign operations Fair value gains on property and equipment Fair value gains/(losses) on available-for-sale investments Other comprehensive income for the period Total comprehensive income for the period

2

Bank

Union Bank of Nigeria Plc and Subsidiary Companies Consolidated and separate financial statements for the period ended 31 March 2018 Group Notes Mar.2018 N million

Profit attributable to: Equity holders of the Bank Non-controlling interest Profit for the period

Bank

Mar.2017 N million

Mar.2018 N million

Mar.2017 N million

5,126 162 5,288

4,420 99 4,519

4,999 4,999

4,169 4,169

4,148 162 4,310

5,271 99 5,370

3,819 3,819

4,867 4,867

18

26

17

25

Total comprehensive income attributable to: Equity holders of the Bank Non-controlling interest Total comprehensive income for the period

Earnings per share for profit from total operations attributable to equity holders of Bank Basic and diluted (Kobo)

9

3

Union Bank of Nigeria Plc and Subsidiary Companies Consolidated and separate ﬁnancial statements for the period ended 31 March 2018

Consolidated and Separate Statements of Financial Position Group Notes ASSETS Cash and cash equivalents Financial assets at fair value through profit or loss Pledged assets Derivative assets held for risk management Loans and advances to customers at amortised cost Investments in equity accounted investee Investment securities Trading properties Investment properties Investment in subsidiaries Property and equipment Intangible assets Deferred tax assets Cash reserve requirement Other assets Defined benefit assets Assets classified as held for sale TOTAL ASSETS LIABILITIES Derivative liabilities held for risk management Deposits from banks Deposits from customers Current tax liabilities Deferred tax liabilities Other liabilities Employee benefit obligations Other borrowed funds

Liabilities classified as held for sale TOTAL LIABILITIES EQUITY Share capital and share premium Retained deficit Other reserves EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE BANK Non-controlling interest

10 11 12 13 14 15 16 17 18 19 20 21 22 23 23

30(b)

24 25 26 22 27 28 29

30(c)

31

32

TOTAL EQUITY TOTAL LIABILITIES AND EQUITY

31 March 2018 N million

Group 31 December 2017 N million

Bank 31 March 2018 N million

Bank 31 December 2017 N million

206,616 24,034 61,813 1,225 449,257 173,559 839 4,997 57,283 4,095 95,875 245,350 55,625 244 1,380,812 397 1,381,209

222,577 20,076 54,079 1,297 517,103 185,658 1,153 4,951 55,986 4,344 95,875 225,770 65,922 352 1,455,143 397 1,455,540

122,837 24,034 61,813 1,225 430,760 158,188 513 10,567 57,128 3,700 95,875 245,350 54,393 244 1,266,627 325 1,266,952

137,497 20,076 54,079 1,297 488,555 175,329 513 10,567 55,801 3,949 95,875 225,770 64,936 352 1,334,596 325 1,334,921

1,085 93,485 759,097 786 216 169,387 798 70,703 1,095,557

972 100,131 802,384 524 259 111,461 857 93,211 1,109,799

1,085 11,180 749,390 321 167,408 795 75,965 1,006,144

972 10,686 796,708 271 108,359 801 95,736 1,013,533

1,095,557

1,109,799

1,006,144

1,013,533

201,652 (16,710) 94,717

201,652 (14,384) 152,642

201,652 (21,571) 80,727

201,652 (19,118) 138,854

279,659

339,910

260,808

321,388

5,993 285,652

5,831 345,741

260,808

321,388

1,381,209

1,455,540

1,266,952

1,334,921

-

-

Signed on behalf of the Board of Directors on 02 May, 2018 by:

__________________________

________________________

Emeka Emuwa

Oyinkansade Adewale

Group Managing Director

Director/CFO

FRC/2013/CIBN/00000001774

FRC/2013/ICAN/00000001775

4


Consolidated and Separate Statements of Changes in Equity For the year ended 31 March 2018 Group Share capital N million

Share premium N million

Statutory reserve N million

Balance at 1 January 2018 Prior period adjustment

14,561 -

187,091 -

26,371 -

-

40,567 -

71,027 (59,691)

Restated balance at 1 January 2018

14,561

187,091

26,371

-

40,567

11,336

Total comprehensive income for the period Profit for the period Other comprehensive income, net of tax Foreign currency translation diferrence Fair value gains/(loss) on available-for-sale investment Appropriation: Transfer from regulatory reserves Transfer from other reserves Total comprehensive income for the period

Treasury shares N million

Fair value Regulatory risk Share based reserve reserve payment reserve N million N million N million

Noncontrolling interest N million

Other reserves N million

Retained deficit N million

Total N million

Total equity N million

193

14,484 -

(14,384) (4,708)

339,910 (64,399)

5,831 -

345,741 (64,399)

193

14,484

(19,092)

275,511

5,831

281,342

4,376

5,126

162

5,288

-

-

750

-

-

-

-

-

-

-

-

-

(1,603)

-

-

421 -

-

421 (1,603)

-

-

750

-

(1,603)

1,994 1,994

-

625

(1,994) 2,382

4,148

-

-

-

-

-

-

-

-

-

-

-

38,964

13,330

15,109

(16,710)



Total N million

12,340

(244,183)

266,559

5,111

271,670

720

14,608

162

421 (1,603) 4,310

Transactions with owners, recorded directly in equity Contributions by and distributions to owners Total contribution and (distributions) to owners Balance at 31 March 2018

14,561

187,091

27,121

Share capital N million



391,641

24,445

-

34,832

38,869

193

279,659

5,993

285,652

December 2017

Group

Balance at 1 January 2017 Total comprehensive income for the year Profit for the year Other comprehensive income, net of tax Remeasurement of defined benefit liability Foreign currency translation diferrence Fair value gains/(loss) on available-for-sale investment Appropriation: Transfer to regulatory reserves Transfer to/(from) other reserves Total comprehensive income for the year

8,468


Fair value Regulatory risk Share based reserve reserve payment reserve N million N million N million 147

Noncontrolling interest N million

Total equity N million

-

-

-

-

-

-

-

-

13,888

13,888

-

-

-

-

7,862

-

-

2,144 -

-

2,144 7,862

-

2,144 7,862

-

-

-

(247,868)

1,926

-

(2,127)

32,158 -

-

-

(32,158) 248,069

-

-

(247,868)

1,926

-

5,735

32,158

-

2,144

229,799

23,894

720

24,614

6,067 26 6,093

43,097 221 43,318

-

-

-

-

293 (247) 46

-

-

49,164 293 49,457

-

49,164 293 49,457

14,561

187,091

26,371

-

40,567

71,027

193

14,484

(14,384)

339,910

5,831

345,741

Transactions with owners, recorded directly in equity Contributions by and distributions to owners Shares issued during the year Equity-settled share-based payment Transfer from Share Based Payment Reserve Total contribution and distributions to owners Balance at 31 December 2017

5

Union Bank of Nigeria Plc and Subsidiary Companies Consolidated and separate financial statements for the period ended 31 March 2018 Consolidated and Separate Statements of Changes in Equity For the period ended 31 March 2018 Bank Share capital N million Balance at 1 January 2018 Prior period adjustment Restated balance at 1 January 2018

14,561 14,561




Fair value Regulatory risk reserves reserves N million N million

187,091 187,091

26,371 26,371

-

39,205 39,205

71,027 (59,691) 11,336

Share based payment reserve N million 193 193


Total N million

2,058 2,058

(19,118) (4,708) (23,826)

321,388 (64,399) 256,989


Total comprehensive income for the period Profit or loss Other comprehensive income

-

-

750

-

-

-

-

-

4,249

4,999

Fair value gains/(loss) on available-for-sale investment Transfer between reserves

-

-

-

-

(1,384) -

1,994

-

-

(1,994)

(1,384) -

Total comprehensive income for the period

-

-

750

-

(1,384)

1,994

-

204

2,255

3,819

187,091

27,121

-

37,821

13,330



391,641

24,445

-

33,579

38,869

Transactions with owners, recorded directly in equity Contributions by and distributions to owners Total contribution and (distributions) to owners

Balance at 31 March 2018

14,561

193

2,262

(21,571)

260,807


Total N million

2,058

(247,868)

251,339

December 2017

Share capital N million Balance at 1 January 2017 Total comprehensive income for the year Profit or loss Other comprehensive income, net of tax Fair value gains on available-for-sale investment Remeasurement of defined benefit liability

8,468


Fair value Regulatory risk reserves reserves N million N million

Share based payment reserve N million 147


-

-

-

-

-

-

-

-

12,839

12,839

-

-

-

-

7,753 -

-

-

-

-

7,753 -

Appropriation: Transfer to regulatory reserves Transfer to/(from) other reserves

-

(247,868)

1,926

-

(2,127)

32,158 -

-

-

(32,158) 248,069

-

Total comprehensive income for the year

-

(247,868)

1,926

-

5,626

32,158

-

-

228,750

20,592

6,067 26 6,093 14,561

43,097 221 43,318 187,091

26,371

-

39,205

71,027

2,058

(19,118)

49,164 293 49,457 321,388

Transactions with owners, recorded directly in equity Contributions by and distributions to owners Shares issued during the year Equity-settled share-based payment Transfer from Share Based Payment Reserve Total contribution and distributions to owners Balance at 31 December 2017

6

293 (247) 46 193


Consolidated and Separate Statements of Cash Flows For the period ended 31 March 2018

Group Notes Cash flows from operating activities Profit for the year Income tax expense Profit before tax

16

Adjustments for: Impairment losses on loans and advances Recoveries on loans and advances (Reversal of impairment)/impairment loss on loans and advances Impairment loss on equity accounted investee Reversal of impairment on other assets Write-off of intangible assets Write-off of property and equipment Revaluation gains on investment properties Allowances on other assets Gain on sale of property and equipment

29 28 28

Gain on disposal of available for sale - unquoted equity Gain on sale of trading properties Gain on sale/liquidation of subsidiaries Depreciation of property and equipment Amortisation of intangible assets Dividend income from equity investment Interest paid on borrowings Contributions to defined contribution plans Increase in liability for defined benefit plans

25

28 29

Change in non-pledged trading assets Change in pledged assets Change in loans and advances to customers Change in other assets Change in defined benefit assets Change in derivative financial instruments-assets Change in derivative financial instruments-liabilities Change in deposits from banks Change in deposits from customers Change in other liabilities Income tax paid Payment from defined contribution plan Payment from defined benefit plan Net cash provided by/(used in) operating activities

35 37(a)(i)

7

Group

Bank

Bank

31 March 31 December 31 March 31 December 2018 2018 2017 2017 N million N million N million N million 5,126 119 5,245

10,497 738 11,235

4,999 50 5,049

9,386 403 9,789

2,349 (304) (176)

26,820 (2,305) (3,597) (192) (604) (1,769)

2,136 (304) (7)

26,720 (2,305) (3,597) (192) (1,768)

1,230 401 2,038 143 2

4,572 1,466 (1,033) 12,528 611 199

1,226 339 2,038 143 2

175 4,498 1,280 (1,033) 12,528 611 199

10,928

47,931

10,622

46,905

(3,958) (7,734) 19,389 (9,293)

(11,764) (649) (18,320) (97,900) 1,643 1,450 959 9,865 143,940 (26,319) 50,836 (595) (639) 49,602

(3,958) (7,734) 9,550 (9,018)

(11,764) (649) (7,018) (98,869) 1,643 1,450 959 6,335 162,881 (29,112) 72,762 (243) (639) 71,880

72 113 (6,646) (43,287) 39,940 (476) 143 (152) (485)

72 113 494 (47,318) 41,265 (5,912) (152) (6,064)

Union Bank of Nigeria Plc and Subsidiary Companies Consolidated and separate financial statements for the period ended 31 March 2018 Cash flows from investing activities Disposal of investment properties Proceeds from sale of trading properties Proceeds from sale of property and equipment Proceed on disposal of subsidiaries Proceed/(acquisition) of investment securities Acquisition of trading properties Acquisition of property and equipment Acquisition of intangible assets Dividend income received

27

314 184 10,658 (2,564) 29 -

1,481 4,305 3,477 (11,674) (2,191) 1,033

15 15,757 (2,561) 2 -

786 4,303 (1,778) (11,653) (2,191) 1,033

Net cash generated from/(used in) investing activities

8,621

(3,569)

13,213

(9,500)

Cash flows from financing activities Net proceeds from shares issued during the year Inflow from other borrowings Repayment of borrowings Interest paid on borrowings Net cash generated from/(used in) financing activities

(22,508) (2,038) (24,546)

49,164 14,886 (11,189) (12,528) 40,333

(19,771) (2,038) (21,809)

49,164 14,886 (10,962) (12,528) 40,560

(16,410) 222,577 449 206,616

86,365 136,194 17 222,577

(14,660) 137,497 122,837

102,940 35,536 (979) 137,497

26 29 30 13

9

Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Effect of exchange rate fluctuations on cash held Cash and cash equivalents at end of period

19 19

8


1

Net interest income Group

Group

Bank

Bank

Mar.2018 N million

Mar.2017 N million

Mar.2018 N million

Mar.2017 N million

Interest income Cash and cash equivalents Loans and advances to customers Investment securities Total interest income

578 23,794 7,302 31,674

983 20,170 6,545 27,698

456 23,182 6,696 30,334

553 19,640 6,428 26,621

LCY FCY Total interest income

25,302 6,372 31,674

10,432 2,637 27,698

25,103 5,231 30,334

22,198 4,423 26,621

Interest expense Deposits from banks Deposits from customers Other borrowed funds Total interest expense

11,805 2,038 13,843

10,432 2,637 13,069

11,645 2,038 13,683

10,344 2,636 12,980

LCY FCY Total interest expense

11,518 2,325 13,843

10,414 2,191 13,069

11,517 2,166 13,683

10,413 2,250 12,980

Net interest income

17,831

14,629

16,651

13,641

9


2

Net Fees and commission income

Credit Related fees and commissions income Account Maintenance Fee E-business fee income (See note (a) ) Commission on LCs, Invisible Trades and Guarantees Other fees and commission

Group

Group

Bank

Bank

Mar.2018 N million

Mar.2017 N million

Mar.2018 N million

Mar.2017 N million

1,769 403 572 370 162 3,276

1,575 356 (10) 247 126 2,294

1,769 403 572 370 3,114

1,575 356 (10) 247 2,168

Group

Group

Bank

Bank

Mar.2018 N million 740 46 279 13 1,078 10 1,088

Mar.2017 N million 468 22 149 29 668 8 676

Mar.2018 N million 740 46 279 13 1,078 10 1,088

Mar.2017 N million 468 22 149 29 668 8 676

Group Mar.2018 N million 220 66 230 516

Group Mar.2017 N million 157 32 496 686

Bank Mar.2018 N million 220 66 230 516

Bank Mar.2017 N million 157 32 496 686

(a) E-business fee income

ATM on-us POS E-card maintenance Online transfer Card FX gain/(loss)

E-business fee charge

ATM on-us POS E-card maintenance Net E-business fee

572

10

(10)

572

(10)


3

Net trading income/(loss) Group

Group

Bank

Bank

Mar.2018 Mar.2018 Mar.2017 Mar.2017 N million N million N million N million Gain on disposal of fixed income securities 3,273 766 3,273 766 Mark to market gains on fixed income securities (123) 153 (123) 116 FX future trading income Foreign exchange gain on trading 195 219 160 186 3,345 1,138 3,310 1,068 Net trading (loss)/income includes the gains and losses arising both on the purchase and sale of trading instruments and from changes in fair value. 4

Other operating income

Dividends Gains on disposal of property and equipment Gains on disposal of trading properties Foreign exchange revaluation gain Rental income Sundry income (see note (a) below)

Group

Group

Bank

Bank

Mar.2018 N million 176 512 39 140 867

Mar.2017 N million 808 829 43 79 163 1,922

Mar.2018 N million 7 511 16 139 673

Mar.2017 N million 808 829 43 59 169 1,908

Group

Group

Bank

Bank

Mar.2018 N million 13 3 123 140

Mar.2017 N million 17 14 171 163

Mar.2018 N million 13 3 122 139

Mar.2017 N million 17 14 139 169

Group Mar.2018 N million


Bank Mar.2018 N million


(a) Sundry income

Cash handling fees Fraud recoveries Other income

5 Net Impairment loss on financial assets (a) Net impairment charge for credit losses

Net impairment charge for credit losses: Total impairment charge on loans and advances

(b) Net impairment loss on other financial assets: Allowance no longer required on other assets Total net impairment loss on financial assets

2,349

320

2,136

316

2,349

773

2,136

316

For the purpose of IFRS 9 adoption and inline with CBN guidance on IFRS 9, the bank elected to embrace the exception to retrospective application of IFRS 9 not to restate the comparative and thus the impairment amount for the two periods are not comparable.

11


6

Personnel expenses

Wages and salaries Contributions to defined contribution plans Interest and current service cost on defined benefit plans

7





7,781 143 2 7,926

7,680 150 23 7,853

7,259 143 2 7,404

7,220 150 23 7,393

Group Mar.2018 N million 39 954 240 266 155 580 476 362 291 1,071 33 2,098 76 1,668 8,309

Group Mar.2017 N million 39 754 259 198 141 430 284 304 257 912 19 1,935 76 1,402 7,010

Bank Mar.2018 N million 38 954 238 235 155 506 369 362 291 1,071 33 1,904 75 1,668 7,899

Bank Mar.2017 N million 38 754 259 179 141 374 239 304 257 912 19 1,839 75 1,402 6,792

Group

Group

Bank

Bank

Mar.2018 N million

Mar.2017 N million

Mar.2018 N million

Mar.2017 N million

73 344 121 72 499 144 4 326 42 26 16 20 85 325 2,098

75 314 51 116 598 66 254 11 23 56 34 100 237 1,935

73 344 121 72 499 144 4 326 42 26 16 20 85 131 1,904

75 314 51 116 598 66 254 11 23 56 34 100 141 1,839

Other operating expenses

Auditors' remuneration NDIC Premium Rents and Rates Accomodation and travels Fleet management and vehicle related expenses Repair and Maintenance Professional fees Advertising and Promotion expenses Security expense Expenses on software Donations and Subscriptions General administrative expenses (see note (a) below) Insurance AMCON surcharge

(a) General administrative expenses

Office cleaning Cash movement expense Entertainment Directors fees and allowances Diesel and power Stationery, printing, postage and telephone Penalties Restitution and other charges Debt recovery expenses Expense on Bulk SMS Business meetings and conferences Annual General Meeting expenses Bank charges Other expenses

12

Union Bank of Nigeria Plc and Subsidiary Companies Consolidated and separate financial statements for the period ended 31 March 2018 8 (a)

Income tax expense Recognised in the profit or loss

Current tax expense Company Income Tax Capital Gains tax NITDA Levy Deferred tax expense Total income tax expense

Group

Group

Bank

Bank

Mar.2018 N million

Mar.2017 N million

Mar.2018 N million

Mar.2017 N million

69 50 119

100 83 (41) 142

-

83 (41) 42

50 50

In line with the Company Income Tax Act, 1990, as amended, the Bank is not liable to pay income tax as the Bank recorded a tax loss for the period. The Bank is exempted from paying minimum tax under the Act, as it has imported share capital of over 25%. No education tax was charged because the Bank has no assessable profit for the period. 9 (a)

Earnings per share Basic earnings per share Earnings/(loss) per share has been computed based on profit after taxation attributable to the Group ordinary shareholders and the weighted average number of shares in issue during the period is as follows. Weighted average number of ordinary shares

Issued ordinary shares at beginning of the period Weighted effect of shares issued during the period

(b)

Group

Bank

Bank

Mar.2018 29,121 29,121

Mar.2017 16,936 16,936

Mar.2018 29,121 29,121

Mar.2017 16,936 16,936

Group

Group

Bank

Bank

Mar.2018

Mar.2017

Mar.2018

Mar.2017

Profit attributable to ordinary shareholders

In millions of Nigerian Naira

Profit/(Loss) for the period attributable to equity holders Basic earnings/(loss) per share (in kobo) (c)

Group

5,126 18

4,420 26

4,999 17

Diluted earnings per share The Group does not have any dilutive potential ordinary shares, therefore, Basic EPS and Diluted EPS are the same for the Group.

13

4,169 25


10

Cash and cash equivalents

Cash and balances with banks Unrestricted balances with central bank Money market placements

11

Group

Bank

Bank

31 December 2017 N million



75,547 31,555 99,514 206,616

66,961 23,499 132,117 222,577

73,396 31,555 17,886 122,837

66,458 23,499 47,540 137,497

Financial assets at fair value through profit or loss

Government bonds Treasury bills

12

Group 31 March 2018 N million

Group 31 March 2018 N million 7,652 16,382 24,034

Group 31 December 2017 N million 9,121 10,955 20,076

Bank 31 March 2018 N million 7,652 16,382 24,034

Bank 31 December 2017 N million 9,121 10,955 20,076

Group 31 March 2018 N million 32,119 29,610 84 61,813

Group 31 December 2017 N million 24,523 29,473 83 54,079

Bank 31 March 2018 N million 32,119 29,610 84 61,813

Bank 31 December 2017 N million 24,523 29,473 83 54,079

01 January 2018 Assets Liabilities N million N million

31 December 2017 Liabilities N million

Pledged assets Financial assets that may be repledged or resold by counterparties

Treasury bills Bonds Placement

Financial assets are pledged as collateral as part of securitized borrowing under terms that are usual and customary for such activities. 13

Derivative financial instruments 31 March 2018 Assets N million

Group

Instrument Type: FX swaps Non-deliverable futures

1,225 1,225 31 March 2018 Assets N million

Bank

Instrument Type: FX swaps Non-deliverable futures

1,225 1,225

1,297 1,297

972 972

972 972

01 January 2018 Assets Liabilities N million N million

31 December 2017 Liabilities N million

1,297 1,297

972 972

972 972

The Group uses derivatives not designated in a qualifying hedge relationship, to manage its exposure to foreign currency risks. The instruments used include forward contracts and cross currency linked forward contracts. 14

Loans and advances to customers at amortised cost

(a) Gross amount IFRS 9 Stage 1 impairment (Performing) Stage 2 impairment (Underperforming) Stage 3 impairment (Non-performing) IAS 39 Specific impairment Portfolio impairment Total impairment Carrying amount

14

Group

Group

Bank

Bank

31 March 2018 N million 495,456

31 December 2017 N million 560,651

31 March 2018 N million 476,445

31 December 2017 N million 531,807

(5,195) (2,672) (38,332)

-

(5,195) (2,592) (37,898)

-

(46,199)

(36,459) (7,089) (43,548)

(45,685)

(36,232) (7,020) (43,252)

449,257

517,103

430,760

488,555


15

Investment in equity accounted investee Group

Cost Balance, beginning of the period

(Impairments) /increase in value Balance, end of the period 16

Group

Bank

Bank

31 March 31 December 2018 2017 N million N million



115 115

115 115

91 91

91 91

(115) -

(115) -

(91) -

(91) -

Group

Group

Bank

Bank

31 March 31 December 2018 2017 N million N million



Investment securities

Fixed income securities at fair value through other comprhensive income comprise: Treasury bills FGN Bonds State Bonds Corporate Bonds

70,850 25,075 3,233 1,097 100,255

65,102 47,635 3,277 1,119 117,133

60,338 25,075 3,233 1,097 89,743

54,773 47,635 3,277 1,119 106,804

Fixed income securities at amortised cost comprise: Treasury bills Federal Government of Nigeria -Bonds State Government of Nigeria -Bonds

4,859 23,249 15,251

22,782 15,723

23,249 15,251

22,782 15,723

Total - Fixed income

43,359

38,505

38,500

38,505

143,614

155,638

128,243

145,309

Stage 1 impairment Total impairment Net Total -Fixed income securities Equity instruments at fair value through other comprhensive income comprise: Equity: Quoted see Note 16a Unquoted see Note 16b Total - Equity instruments Less: provisions for unquoted equities Net Total -Equity instruments

2,195 32,751 34,946 (5,001) 29,945

Total investment securities

16a

Investment in REIT

16b

Unquoted AFC Nigeria Auto Clearing System (NAC) Interswitch Credit Reference Company (CRC) Afrexim Bank Nig Superswitch Infrastructure Banque de Benin AIB Cotonu Investment in SMEEs

173,559

2,195 31,879 34,074 (4,054) 30,020 185,658

Group Group 31 March 31 December 2018 2017 N million N million 2,195 2,195

2,195 32,751 34,946 (5,001) 29,945 158,188 Bank 31 March 2018 N million 2,195

2,195 31,879 34,074 (4,054) 30,020 175,329 Bank 31 December 2017 N million 2,195

27,162 42 2 50 494 10 1152 122 3,718 32,751

26,289 42 2 50 494 10 1152 122 3,718 31,879

27,162 42 2 50 494 10 1,152 122 3,718 32,751

26,289 42 2 50 494 10 1,152 122 3,718 31,879

Total

34,946

34,074

34,946

34,074

Less: Provision for unquoted investment

(5,001) 29,945

(4,054) 30,020

(5,001) 29,945

(4,054) 30,020

15


17

Trading properties This represents the cost of real estate properties held by the Group which are designated for resale. The movement on the trading properties account during the period was as follows: Group Group 31 March 31 December 2018 2017 N million N million

Balance, beginning of period Reclassified to investment properties

1,153

Reversal of impairment on trading properties Disposal Balance, end of period

18

(314) 839

Bank Bank 31 March 31 December 2018 2017 N million N million

2,309 (349)

513

513

273 (1,080) 1,153

513

513

Investment Properties These investment properties were last revalued during the period ended 31 December 2016 by Messrs. Bode Adediji Partnership, a firm of estate surveyors and valuers, using the open market basis of valuation, and their reports were dated 10 February 2017 for UBN Property Company Limited respectively. As at 31 December 2016, the Directors are of the opinion that there were no material fluctuations in the value of the Bank's investment properties since the last valuation.

Group

31 March 31 December 2018 2017 N million N million 4,951 4,347 46 604 4,997 4,951 4,997 4,951

Balance, beginning of the period Disposal Revaluation gains Purchase of investment property Impairment allowance Balance, end of the period

19

Group

Bank

31 March 31 December 2018 2017 N million N million -

Investment in subsidiaries Cost Bank

Bank

31 March 31 December 2018 2017 N million N million 2,195 2,195 8,372 8,372 10,567 10,567

UBN Property Company Limited Union Bank UK Plc

(a)

Bank

The subsidiary companies, country of incorporation, nature of business and percentage equity holding are detailed below:

Company Name

Country Incorporation

UBN Property Company Limited (ii) Union Bank UK Plc (iii)

Nigeria Nigeria

Direct ownership interest 31 December 2017 31 March 2018 Status/% Status/% 39 Property Development 39 100 Licensed UK Bank 100 Nature of business

(i)

UBN Property Company Limited (Registered office at 36, Marina, Lagos) The Company has 5,626,416,051 ordinary shares of N1.00 each of which 39.01% (December 2014 - 39.01%) is held by the Bank. In line with IFRS 10Consolidated Financial Statement, Union Bank of Nigeria Plc has control over this entity as it has the power, exposure to variability of returns and a strong link between power and variability of returns. The Bank also governs the financial and operating policies of UBN Property Company Limited.

(ii)

Union Bank UK Plc (Registered office at 1 King's Arms Yard, London, EC2R 7AF) The Bank directly holds 100% holding of Union Bank UK's 60,000,000 ordinary shares and 99% of its 50,000 deferred shares of GBP1 each and 1% indirect holding through Williams Street Trustees Limited, the nominee company for Union Bank of Nigeria Plc . Union Bank UK Plc was incorporated in December, 2004 as an authorised United Kingdom subsidiary to carry out the business formerly conducted by the London Branch of Union Bank of Nigeria Plc.

16

Union Bank of Nigeria Plc and Subsidiary Companies Consolidated and separate financial statements for the period ended 31 March 2018 (c) Condensed results of consolidated entities (i) The condensed financial data of the continuing operations as at 31 March 2018, are as follows Condensed statement of comprehensive income

Statement of Comprehensive income Operating income Net operating income after net impairment loss Operating Expenses Net impairment loss on financial assets Share of proit of equity accounted investees Profit before income tax Taxation Profit after income tax

Group balances N million 25,623 23,274 (17,867) (2,349)

Consolidation entries N million (7) (7) 4 (1)

5,407 (119) 5,288

(3) (1) (4)

Total N million 25,630 23,281 (17,871) (2,348) 5,410 (118) 5,292

Bank N million 24,051 21,915

Union Properties N million 400 400

Atlantic Nominees N million -

Union Bank UK N million 1,179 966

(16,867) (2,136)

(49) -

-

(955) (213)

351

-

11

(67)

-

(2)

284

-

9

5,048 (49) 4,999

Condended Statement of financial position Group balances N million Cash and cash equivalents Non-pledged trading assets Pledged assets Derivative financial instrument Loans and advances to customers Investments in equity-accounted investee Investment securities Assets held for sale Trading properties Investment properties Investment in subsidiaries Property and equipment Intangible assets Deferred tax assets Other assets Defined benefit assets Total assets Financed by: Derivative financial instruments Deposits from banks Deposits from customers Deferred tax liabilities Current tax liabilities Other liabilities Retirement benefit obligations Other borrowed funds Equity and reserves Total liabilities

Consolidation entries N million

Total N million

Bank N million

206,616 24,034 61,813 1,225 449,257 173,559 397 839 4,997 57,283 4,095 95,875 300,975 244

(17,896) (5,260) (325) (10,567) (1) 0 217 270 -

224,512 24,034 61,813 1,225 454,517 173,559 722 839 4,997 10,567 57,284 4,095 95,658 300,705 244.00

122,837 24,034 61,813 1,225 430,760 158,188 325 513 10,567 57,128 3,700 95,875 299,743 244

1,381,209

(33,562)

1,414,771

1,266,952

1,085 93,485 759,097 216 786 169,387 798 70,703 285,652

(17,897) 216 (132) (1) (5,262) (10,487)

1,085 93,485 776,994 786 169,519 799 75,965 296,139

1,381,209

(33,563)

1,414,772

17

Union Properties N million 53 4,859 326 4,997 28 1 (210) 163

Atlantic Nominees N million

Union Bank UK N million

397 -

101,622 23,757 10,512 128 394 (7) 799

10,217

397

137,205

1,085 11,180 749,390 321 167,408 795 75,965 260,808

320 994 4 8,899

397

82,305 27,604 145 1,117 26,035

1,266,952

10,217

397

137,206

Union Bank of Nigeria Plc and Subsidiary Companies Consolidated and separate financial statements for the period ended 31 March 2018 (c) Condensed results of consolidated entities (i) The condensed financial data of the continuing operations as at 31 December 2017, are as follows Condensed statement of comprehensive income

Statement of Comprehensive income Operating income Net operating income after net impairment loss Operating Expenses Net impairment loss on financial assets Share of proit of equity accounted investees Profit before income tax Taxation Profit after income tax

Group balances N million 96,677 83,508 (67,810) (13,362)

Consolidation entries N million (62) (62) 65 (193)

15,505 (710) 14,795

(191) (191)

Total N million 96,739 83,570 (67,875) (13,169) -

Bank N million 91,251 78,233

Union Properties N million 1,078 1,078

(64,268) (13,018)

(219) -

-

15,696

13,965

859

-

871

(196)

-

(188)

663

-

683

(710)

Atlantic Nominees N million -

Union Bank UK N million 4,410 4,259 (3,388) (151)

-

(326)

14,985

13,639

Total N million

Bank N million

Condended Statement of financial position Group balances N million Cash and cash equivalents Non-pledged trading assets Pledged assets Derivative financial instrument Loans and advances to customers Investments in equity-accounted investee Investment securities Assets held for sale Trading properties Investment properties Investment in subsidiaries Property and equipment Intangible assets Deferred tax assets Other assets Defined benefit assets Total assets Financed by: Derivative financial instruments Deposits from banks Deposits from customers Deferred tax liabilities Current tax liabilities Other liabilities Retirement benefit obligations Other borrowed funds Equity and reserves Total liabilities

Consolidation entries N million

223,528 19,850 54,583 96 515,153 185,593 397 963 4,826 55,987 4,343 95,910 290,048 29

(21,843) (5,555) (325) (10,567) 185 62 29

245,371 19,850 54,583 96 520,708 185,593 722 963 4,826 10,567 55,987 4,343 95,725 289,986 -

138,206 19,850 54,583 96 489,736 175,265 325 513 10,567 55,801 3,949 95,875 289,236 -

1,451,306

(38,014)

1,489,320

1,334,002

90 100,131 803,052 151 910 109,911 919 90,371 345,771

(21,844) 151 1 (255) (27) (5,556) (10,484)

90 100,131 824,896 909 110,166 946 95,927 356,255

1,451,306

(38,014)

1,489,320

18

Union Properties N million 5,425 450 4,826 31 (150) 98

Atlantic Nominees N million

Union Bank UK N million

397 -

101,740 30,972 10,328 155 394 652

10,680

397

144,241

90 10,686 797,193 346 107,046 890 95,927 321,824

323 2,287 56 8,014

397

89,445 27,703 240 833 26,020

1,334,002

10,680

397

144,241

Union Bank of Nigeria Plc and Subsidiary Companies Consolidated and separate financial statements for the period ended 31 March 2018 20 (a)

Property and equipment Group: The movement in these accounts during the period was as follows:

Leasehold improvement N million

Fixtures and fittings N million

Furniture & Motor Capital work equipment vehicles in progress N million N million N million

Land N million

Buildings N million

Total N million

Balance at 1st January, 2018 Exchange difference Additions Disposals Reclassification to other assets Balance as at 31 March 2018

13,092 112 13,204

22,087 22,087

15,643 1,041 16,684

3,862 187 (2) 4,046

22,155 (18) 922 (45) 23,014

3,226 (10) 3,216

1,502 302 1,804

81,567 (18) 2,564 (57) 84,056

Balance at 1st January, 2017 Exchange difference Additions Disposals Write off Reclassification to other assets Balance as at 31 December 2017

14,079 118 (1,335) 230

23,294 (1,200) (7)

11,962 19 3,879 (220) 3

3,201 950 (248) (41)

17,577 (3) 4,681 (147) 47

3,342 546 (662) -

1,589 1,500 (1,587)

13,092

22,087

15,643

3,862

22,155

3,226

1,502

75,045 15 10,291 (3,794) 32 81,567

6,043

1,899

Exchange difference Charge for the period Disposals Write-off/Adj Reclassifications Derecognition of as subsidiaries Assets classified discontinued operations Balance as at 31 March 2018

-

6,043 101 6,144

1,899 2 78 -

1,563 1,563 89 (2) -

13,539 13,539 8 910 (41) -

2,537 2,537 52 (6) -

-

1,979

1,650

14,416

2,583

-

Balance at 1st January, 2017 Charge for the year Disposals Write-off/Adj Exchange difference Reclassifications Balance as at 31 December 2017

-

5,826 420 (203) 6,043

1,688 280 (78) 12 (3) 1,899

1,435 329 (189) (12) 1,563

10,239 3,397 (141) 31 13 13,539

3,057 146 (665) 2,537

-

22,245 4,572 (1,276) 43 (2) 25,581

Cost

Depreciation and impairment losses Balance at 1st January 2018 Prior period revaluation

(iii) Net Book Value Balance as at 31 March 2018 Balance as at 31 December 2017

25,581 25,581 10 1,230 (49) 26,773

13,204

15,943

14,705

2,397

8,598

633

1,804

57,283

13,092

16,044

13,744

2,299

8,616

689

1,502

55,986

(iv) In the opinion of the directors, the market value of the Group's properties is not less than the value shown in the financial statements. Exchange difference relates to the conversion of property and equipments acquired in the overseas office at the rate of exchange ruling at the end of the (v) period. (v) Capital work in progress represents construction costs in respect of new offices. On completion of construction, the related amounts are transferred to appropriate categories of property and equipment. (vi) There were no capitalised borrowing costs related to the acquisition of property and equipment during the period (December 2017: nil)

19

Union Bank of Nigeria Plc and Subsidiary Companies Consolidated and separate financial statements for the period ended 31 March 2018 (b)

Bank: The movement in these accounts during the period was as follows:


Land N million

Buildings N million

Reclassifications

13,065 112 -

22,096 -

15,531 1,041.00 -

Balance as at 31 March 2018

13,176

22,096

Balance at 1st January 2017

14,079 117 (1,335) 204 13,065

23,294 (1,200) 2 22,096

(i) Cost Balance at 1st January 2018

Additions Disposals

Additions Disposals Reclassifications to other assets Write off

Balance as at 31 December 2017



Total N million

3,890 187 (2) -

21,893 884 (45) -

3,180 (10) -

1,523 338.00 -

81,178 2,561 (57) -

16,572

4,075

22,732

3,170

1,861

83,682

11,877 3,879 (219) (6) 15,531

3,200 978 (247) (41) 3,890

17,349 4,659 (130) 15 21,893

3,268 546 (634) (0) 3,180

1,587 110 (174) 1,523

74,655 10,289 (3,765) (0) 81,178 .

(ii) Accumulated depreciation

Balance at 1st January 2018

Land N million

Buildings N million




Total N million

Charge for the period Disposals Reclassifications Write-off/Adj

-

6,071 6,071 101 -

1,839 1,839 77 -

1,563 1,563 89 (2) -

13,397 13,397 907 (41) -

2,507 2,507 52 (6) -

-

25,377 25,377 1,226 (49) -

Balance as at 31 March 2018

-

6,172

1,916

1,650

14,263

2,552

-

26,554

Restated balance at 1st January 2017 Charge for the year Disposals Reclassifications Write-off/Adj

-

5,854 420 (203) 0 -

1,657 263 (78) (3) -

1,435 329 (189) (12) -

10,141 3,370 (127) 13 -

3,001 139 (634) -

-

22,088 4,521 (1,231) (2) -

Balance as at 31 December 2017

-

6,071

1,839

1,563

13,397

2,507

-

25,377

13,176

15,924

14,656

2,425

8,469

618

1,861

57,128

13,065

16,025

13,692

2,327

8,496

673

1,523

55,801

(iii) Net Book Value Balance as at 31 March 2018 Balance as at 31 December 2017

(iv) In the opinion of the directors, the market value of the Bank's properties is not less than the value shown in the financial statements.

(v) Capital work in progress represents construction costs in respect of new offices. On completion of construction, the related amounts are transferred to appropriate categories of property and equipment. (vi) There were no capitalised borrowing costs related to the acquisition of property and equipment during the period (December 2017: nil)

20

Union Bank of Nigeria Plc and Subsidiary Companies Consolidated and separate financial statements for the period ended 31 March 2018 21

Intangible assets Group

Group

Bank

Bank





Cost Balance, beginning of the period Additions Reclassification Exchange translation difference Balance, end of period

9,229 29 122 9,380

6,693 2,191 178 167 9,229

8,143 2 88 8,233

5,774 2,191 178 8,143

Amortization and impairment losses Balance, beginning of the period Amortisation for the period Reclassification Exchange translation difference Balance, end of period

4,885 401 5,286

3,319 1,466 (2) 102 4,885

4,194 339 4,533

2,915 1,280 (1) 4,194

Carrying amounts as at period end Balance as at 1 January

4,095 4,344

4,344 3,374

3,700 3,949

3,949 2,859

(i)

In the opinion of the directors, the market value of the Group's software is not less than the value shown in the financial statements.

(ii)

There were no capitalised borrowing costs related to the acquisition of software during the period (December 2017 : nil)

22

Deferred tax assets and liabilities Recognised deferred tax assets and liabilities Deferred tax assets and liabilities are attributable to the following: Group 31 March 2018 Assets N million 573 100,630 1,711 102,914

Property, equipment, and software Allowances for loan losses Foreign exchange gains Tax loss carry forward Others Net tax assets (liabilities)

Deferred tax liabilities

Net N million (6,847) (192) 573 100,630 1,711 95,875

Net N million 216 216 95,659

Property, equipment, and software Net tax assets (liabilities) Net deferred tax 31 December 2017


Deferred tax liabilities

Assets N million

Net N million

573 100,630 1,711 102,914

(6,847) (192) 573 100,630 1,711 95,875

Net N million 259 259 95,616

Property, equipment, and software Net tax assets (liabilities) Net deferred tax

21

Union Bank of Nigeria Plc and Subsidiary Companies Consolidated and separate financial statements for the period ended 31 March 2018 Bank 31 March 2018


Assets N million

Net N million

573 100,630 1,711 102,914

(6,847) (192) 573 100,630 1,711 95,875

Assets N million 573 100,630 1,711 102,914

Net N million (6,847) (192) 573 100,630 1,711 95,875

Bank 31 March 2018 N million 95,875 -

Bank 31 December 2017 N million 95,875 -

31 December 2017

Property, equipment, and software Allowances for loan losses Foreign exchange gains Tax loss carry forward Others Net tax assets (liabilities) Deferred tax assets and liabilities Movement on the net deferred tax assets/(liabilities) account during the period: Group 31 March 2018 N million 95,720 (61) -

Balance, beginning of the period Credit for the period Net assets/(liabilities) of discontinued operations Net deferred tax assets/(liabilities) Made up of Deferred tax assets Deferred tax liabilities

Group 31 December 2017 N million 95,809 (132) -

95,659

95,720

95,875

95,875

102,914 (7,255)

102,914 (7,255)

102,914 (7,039)

102,914 (7,039)

Recognised and unrecognised deferred tax assets Recognition of deferred tax assets of N95,759 (December 2017: 95,759) is based on management's profit forecasts (which are based on the available evidence, including historical levels of profitability), which indicate that it is probable that the Group's enities will have taxable profits against which these assets can be utilized.

Deferred tax assets have not been recognised in respect of the following items, because it is not probable that future taxable profit will be available against which the Group can use the benefits.

22


Other assets

Cash Reserve Requirement (see (i)) Excess CRR balance to be refunded (see (ii)) Total Cash Reserve Requirement

Group 31 March 2018 N million 219,827 25,523 245,350


Bank 31 March 2018 N million 219,827 25,523 245,350

Bank 31 December 2017 N million 225,770 25,523 251,293

1,549 2,207 7,153 22,986 29,302 63,197 (7,572) 55,625

1,883 1,922 4,230 19,151 20,658 47,844 (7,445) 40,399

1,549 292 6,937 22,986 28,997 60,761 (6,368) 54,393

1,883 220 3,960 19,151 20,440 45,654 (6,241) 39,413

Other assets: Clearing Accounts receivable Prepayments

Receivable on FX forward (see (iii)) Sundry assets (see (iii)) Impairment on other assets(see (iv)) Net other assets

300,975

291,692

299,743

290,706

(i)

The Bank had restricted balances of N218.092 billion (December 2017: N225.770 billion) with the Central Bank of Nigeria (CBN) as at 31 December 2017, representing the cash reserve requirement (CRR). The CRR is a mandatory cash deposit which should be held with the Central Bank of Nigeria as a regulatory requirement.The CRR is non interest bearing and is not available for use in the Group’s day-to-day operations. As at 31 December 2017, the CRRs in force were Public Sector Deposits 22.5% (Dec 2017: 22.5%) and Private Sector Deposits 22.5% (Dec 2017: 22.5%).

(ii)

The MPC meeting held on November 20 - 21, 2017 maintained CRR at 22.5% . The excess CRR funds are only released to banks to fund approved eligible real sector projects. The amount refundable to the Bank is N25.523 billion (Dec. 2017: N25.523 billion).

(iii)

Receivable on FX forward The balance represents the value of foreign currency receivable on forward transactions with Central Bank of Nigeria.

(iv)

Other Sundry assets Group Group 31 March 31 December 2018 2017 N million N million 1,501 1,501 2,708 2,706 1,927 1,927 1,352 1,352 1,606 1,606 153 249 3,673 1,361 353 353 6,928 3,271 362 533 40 794 794 7,904 16,455 29,302 20,658

Frauds and losses Advance payments for PPE Receivable from Union Homes Property under dispute Garnishee Order Status Car loan ATM receivable Dividend Receivable Receivable on electronic transfers and collecions Master/Visa card electronic settlement Receivable from Treasury assets Deposits for SMEE investments Other account balances Balance, end of year

23

Bank Bank 31 March 31 December 2018 2017 N million N million 1,501 1,501 2,708 2,706 1,927 1,927 1,352 1,352 1,606 1,606 153 249 3,673 1,361 353 353 6,928 3,271 362 533 40 794 794 7,599 1,196 28,997 20,440


Deposits from banks Group 31 March 2018 N million 11,180 82,305 93,485

Money market deposits (See note (i) below) Other deposits from banks

(i)

25

Money market deposits LCY inter bank takings FCY inter bank takings

11,180 11,180

Term deposits Current deposits Savings

Low-cost deposits Low-cost deposits as % of total customer deposits

10,686 10,686




255,971 308,940 194,186

265,878 349,100 187,406

249,489 305,715 194,186

265,274 344,028 187,406

759,097

802,384

749,390

796,708

503,126 66.3%

536,506 66.9%

499,901 66.7%

531,434 66.7%

Group 31 March 2018 N million 524 119 143 786

Group 31 December 2017 N million 465 (193) 911 (659) 524

Bank 31 March 2018 N million 271 50 321

Bank 31 December 2017 N million 177 337 (243) 271

Group 31 March 2018 N million 68,433 10,665 950 7,483 585 11,480 395 2,971 9,453 2,635 50 41,528 5,539 169,387


Bank 31 March 2018 N million 68,433 10,665 950 7,483 585 11,266 395 2,971 9,441 2,635 50 41,528 4,006 167,408

Bank 31 December 2017 N million 63,217 9,258 879 7,620 406 11,326 420 2,978 4,626 3,917 16 1,748 1,948 108,359 108,359 -

Group 31 March 2018 N million 489 158 32 155 6,400 2,841 267 439 156 545 11,480

Group 31 December 2017 N million 380 139 261 53 4,158 612 7,717 109 233 628 11,333

Bank 31 March 2018 N million 489 158 32 155 6,400 2,841 267 439 156 331 11,266

Bank 31 December 2017 N million 380 139 261 53 4,158 612 7,717 109 233 475 11,326

Other liabilities

Deposits for foreign currency Due to foreign correspondent banks PAYE and other statutory deductions Draft and Bills payable

Sundry creditors Creditors and accruals (see (a) below) Unearned income Provision for claims and contingencies (see (b) below) Accounts payable Provisions for Ex-staff claims (AMCON provision) (see (c) below) Insurance premium payable Electronic collections and other e-payment liabilities Other credit balances (see (d) below)

(a)

11,180 11,180

Bank 31 December 2017 N million 10,686 10,686

Current tax liabilities

Balance, beginning of period Reclassification Charge for the period Payments during the period Balance, end of period 27

10,686 10,686

Bank 31 March 2018 N million 11,180 11,180

Deposits from customers Group 31 March 2018 N million

26


63,217 9,258 926 7,620 406 11,333 420 2,978 6,188 3,917 16 1,748 3,434 111,461

Creditors and accruals

Accrued IT Consumables Accruals for professional and consultancy fees Accrued Training Expenses Accrued Advert And PR Fees AMCON provision Accrual for staff related allowances Accrued Rent Provisn for Restitution and Charges Accrual for repairs maintenance Accrued others

24

Union Bank of Nigeria Plc and Subsidiary Companies Consolidated and separate financial statements for the period ended 31 March 2018 (b)

The movement on provision for claims and contingencies during the period was as follows Group 31 March 2018 N million 2,978 (7) 2,971

Balance, beginning of period Charge/reversal during the period Reclassification Balance, end of the period

Group Bank 31 December 2017 31 March 2018 N million N million 3,104 2,978 (126) (7) 2,978 2,971

(c)

AMCON provision The amount represents outstanding balance of the provision made by the bank in 2011 in respect of propable liabilities as part of Financial Accommodation as contained in the AMCON's clawback agreement.

(d)

Other credit balances Group Dec.2017 N million 450 128 94 781 54

Unrealized OTC Futures Recoupable Provision for Audit Fees Vendor retention fee payable Franchise Collections Fx Futures Margin Deposit Others

4,031 5,539

25

Group Dec.2016 N million

372 144 91 606 106 2,115 3,434

Bank Dec.2017 N million 450 128 94 781 54

2,499 4,006

Bank 31 December 2017 N million 3,104 (126) 2,978

Bank Dec.2016 N million 372

144 91 606 106 629 1,948


28 Employee benefit obligations Group Group Bank 31 March 31 December 31 March 2017 2018 2018 N million Post employment benefit obligation (see (a) below) Other long-term employee benefits (see (b) below)

115 683 798

N million 273 584 857

N million 115 680 795

Bank 31 December 2017 N million 217 584 801

(a) Post employment benefit obligation Group Group Bank 31 March 31 December 31 March 2017 2018 2018 N million

N million

N million


Defined contribution scheme (see (i) below) Defined benefit obligation (See (ii) below)

115 115

124 149 273

115 115

124 93 217

Defined benefit asset (See (ii) below) Net defined benefit obligation

244 244

352 203

244 244

352 259

(i) Defined Contribution Scheme Group Group Bank 31 March 31 December 31 March 2017 2018 2018

Balance, beginning of period Charge during the period Contribution remitted during the period Balance, end of period

Bank 31 December 2017

N million

N million

N million

N million

124 143 (152) 115

152 611 (639) 124

124 143 (152) 115

152 611 (639) 124

The Group and its employees make respective contributions of 10% and 8% of basic salary, housing and transport allowance to each employee's retirement savings account maintained with employees' nominated Pension Fund Administrators. (ii) Defined benefit obligation The Group also has a Legacy defined benefits pension scheme for its staff, which was set up prior to passage of the Pension Reform Act. Under the scheme, terminal benefits were determined with reference to the employees' salaries upon disengagement. As at the period end, the Group has transferred the benefits to the Retirement Savings Accounts (RSA) of the affected employees and the obligations are funded by plan assets.

(b) Other long-term employee benefits Other long-term employee benefit represents liability in respect of long service award. The basis of determining the benefit due to an employee is as stated below: (i) Less than 5 periods of service: 12 weeks total emolument for each completed period of service. (ii) 5 periods but less than 15 periods of service: 14 weeks total emolument for each completed period of service. (iii) 15 periods of service and above: 16 weeks total emolument for each completed period of service. The total emolument is defined as basic salary, housing and transport allowance and lunch subsidy. (i) The amounts recognised in the statement of financial position are as follows: Group Group Bank 31 March 31 December 31 March 2017 2018 2018 N million Present value of unfunded obligation Present value of funded obligation Total present value of the obligation Fair value of plan assets Present value of net obligation Recognized liability for defined benefit obligations

26

N million

N million


683 683 683

584 584 584

680 680 680

584 584 584

683

584

680

584

Union Bank of Nigeria Plc and Subsidiary Companies Consolidated and separate financial statements for the period ended 31 March 2018 29 Other borrowed funds Group 31 March 2018 N million Due to CAC ( see (a)) BOI on-lending facilities (see note (b) below) Other borrowings ( see (c))

11,300 4,747 54,656 70,703

Group 31 December 2017 N million 11,833 4,962 76,416 93,211

Bank 31 March 2018 N million 11,300 4,747 59,918 75,965

Bank 31 December 2017 N million 11,833 4,962 78,941 95,736

(a)

This represents the outstanding balance on an unsecured facility of N18,167,000,000 disbursed by the Central Bank of Nigeria (CBN), as part of its developmental role, in collaboration with the Federal Government of Nigeria represented by the Federal Ministry of Agriculture and Water Resources which established the Commercial Agriculture Credit Scheme for promoting agricultural enterprises in Nigeria. The funds are made available to participating banks at zero cost, for on lending to commercial agricultural enterprises at a maximum rate of 9.00% p.a.

(b)

This represents the outstanding balance of an intervention credit granted to the Bank by the Bank of Industry (BOI), a company incorporated in Nigeria for the purpose of refinancing / or restructuring existing loans to Small and Medium Scale Enterprises (SMEs) and manufacturing companies. The total facility is secured by Federal Government of Nigeria securities worth N6.0 billion (Dec. 2017: N7.5 billion) and has a 15-period tenor and repayable quarterly. A management fee of 1% , deductible at source, is paid by the Bank to BOI under the on-lending agreement and the Bank is under obligation to onlend to customers at an all-in interest rate of 7% per annum. Though the facility is meant for on-lending to borrowers in specified sectors, the Bank remains the primary obligor to the BOI and therefore assumes the risk of default of customers.

(c)

Other borrowings consist of the following foreign currency denominated facilities:

Afreximbank African Finance Corporation Access Bank Nig Ltd Mashreq Bank Union Bank, UK Access Bank UK British American Commercial Bank ABSA Bank Sky Enterprises

Bank 31 March 2018


Bank 31 March 2018


$ million 121.4 25.5 10.2 21.2 -

$ million 126.2 40.0 33.9 30.5 7.6 0 0 0 0

N million 40,812 8,578 3,416 7,112 -

N million 41,805 13,263 10,112 2,525 11,236 -

59,918

78,941

178.2

238.7

As at March 31, 2018, the USD conversion rate is $/N336.16 (December: $/N331.16) 30 Discontinued operations (a) Assets classified as held for sale Group 31 March 2018 N million 188 209

Investments in subsidiaries Investment properties Other assets

397

27

Group 31 December 2017 N million 188 209 397

Bank 31 March 2018 N million 325 325

Bank 31 December 2017 N million 325 325


DISCONTINUED OPERATIONS Statements of Financial Position Condensed statement of financial position for discontinued operations

Union properties N million

Statement of financial position

Atlantic Intragroup Nominee adj N million N million

Total N million

ASSETS Investment properties Other assets

-

188 209

-

188 209

TOTAL ASSETS

-

397

-

397

LIABILITIES TOTAL LIABILITIES

-

-

-

-

28


31 Capital and reserves Share capital

(a)

Group

Group

Bank

Bank





Authorised : 35,000,000,000 (Dec 2017: 35,000,000,000) Ordinary shares of 50 kobo each

17,500 Group 31 March 2018 N million

(b)

14,561

Balance, beginning of period Shares issued during the year Transfer from Share Based Payment Reserve Balance, end of period


17,500 Bank 31 December 2017 N million

14,561

14,561

14,561

Group 31 March 2018 N million 14,561 14,561

Group 31 December 2017 N million 8,468 6,067 26 14,561


Bank 31 December 2017 N million 8,468 6,067 26 14,561

Group 31 March 2018 N million 187,091 187,091

Group 31 December 2017 N million 391,641 (247,868) 43,097 221 187,091


Bank 31 December 2017 N million 391,641 (247,868) 43,097 221 187,091

Share premium Share premium is the excess paid by shareholders over the nominal value for their shares.

Balance, begining of period Transfer between reserves Shares issued during the year Transfer from Share Based Payment Reserve Balance, end of period Share capital and share premium

(d)


17,500

Issued and fully paid 29,120,752,788 (Dec. 2017: 29,120,752,788) Ordinary shares of 50kobo each

(c)

17,500

201,652

201,652

201,652

201,652

Other reserves The other reserves includes Statutory reserves, Fair value reserve, Regulatory risk reserves, Small and Medium Scale Industries Reserve (SMEEIS) and Capital reserve. Group 31 March 2018 N million 27,121 38,964 13,330 14,743 (14,918) 7,056 5,489 3,022 95,000

Statutory reserves Fair value reserve Regulatory risk reserve Translation reserve Excess clawback reserves SMEEIES/AGSMEIS reserve Capital reserve Equity component of employee benefit remeasurement

29

Group 31 December 2017 N million 25,853 39,620 69,554 14,339 (14,918) 8,283 5,489 2,384 150,604

Bank 31 March 2018 N million 27,121 37,821 13,330 1,895 (14,918) 7,568 5,489 3,022 81,521

Bank 31 December 2017 N million 25,853 38,258 69,554 1,895 (14,918) 7,568 5,489 2,384 136,083


(i)

Statutory reserves Nigerian banking regulations require the Bank to make an annual appropriation to a statutory reserve. As stipulated by S.16(1) of the Banks and Other Financial Institution Act of Nigeria, an appropriation of 30% of profit after tax is made if the statutory reserve is less than paid-up share capital and 15% of profit after tax if the statutory reserve is greater than the paid up share capital. The Bank made a transfer of N750million to statutory reseves during the period ended 31 March 2018 (March 2017: N625million).

(ii)

Fair value reserve The fair value reserve includes the net cumulative change in the fair value of financial instruments at fair value through other comprehensive income.

(iii) Regulatory risk reserve The regulatory risk reserve warehouses the difference between the impairment on loans and advances computed under Nigeria GAAP based on the Central Bank of Nigeria prudential guidelines and provisions specified by the central banks of foreign subsidiaries, compared with the incurred loss model used in calculating the impairment under IFRSs. (iv)

Other reserves The other reserves include Small and Medium Scale Industries Reserve (SMEEIS), Contingency reserve, Capital reserve, Translation reserve.

(v)

Agricultural/Small and Medium Enterprises Investment Scheme (AGSMEIS/SMEEIS): The SMEEIS reserve is maintained to comply with the Central Bank of Nigeria (CBN) requirement that all licensed banks set aside a portion of the profit after tax in a fund to be used to finance equity investment in qualifying small and medium scale enterprises. Under the terms of the guideline (amended by CBN letter dated 11 July 2006), the contribution was 10% of profit after tax for the first 5 periods , and thereafter reduced to 5% of profit after tax.

In April 2017, the Central Bank of Nigeria issued guidelines to govern the operations of the Agricultural/Small and Medium Enterprises Scheme (AGSMIES), which was established to support the Federal Government's efforts at promoting agricultural businesses and Small and Medium Enterprises (SMEs) as vehicles for achieving sustainable economic development and employment generation. Though there's no longer mandatory transfers to this reserve under the earlier directives, all Nigerian banks are now required to set aside an amount equal to 5% of their annual Profits After Tax (PAT) towards the funding of equity investments, which qualify under the AGSMEIS Scheme.

(vi)

Translation reserve Translation reserve comprises all foreign exchange differences arising from translation of the financial statements of foreign operations.

(vii) Excess Capital Clawback Under the recapitalisation plan of the Bank executed in 2011, the Asset Management Corporation of Nigeria (AMCON) provided Financial Accommodation to bring the Bank's Completion Net Assets Value (NAV) to zero. The Financial Accommodation provided by AMCON exceeded the Bank's Completion NAV of zero, calculated as at 31 December 2011, by N14.918 billion. This excess amount was refunded to AMCON during the period ended 31st December, 2012. (viii) Share based payment reserve This represents the provision for liabilities under the equity settled portion of the Group's shares incentive scheme which enables key management personnel to benefit from the performance of the Group The movement is shown below

Balance, begining of period Share transferred during the period Transfer to treasury shares (see note (b) above) Transfer to share premium (see note (c) above) Balance, end of period

30

Group

Group

Bank

Bank

31 March 2018 N million -

31 December 2017 N million 147 100 (26) (221) (0)

31 March 2018 N million -

31 December 2017 N million 147 100 (26) (221) (0)


(e)

Retained deficit Retained deficit represents the carried forward income net of expenses plus current period profit attributable to Group's shareholders.

32

Non-controlling Interest

Group 31 March 2018 N million 5,831 162

Movement in the non controlling interest

Balance, beginning of period Profit/(loss) for the period Balance, end of period 33

5,993

Group 31 December 2017 N million 5,111 720 5,831

Acceptances, bonds, guarantees and other obligations for the account of customers In common with other banks, the Group conducts business involving acceptances, performance bonds and indemnities. The majority of these facilities are offset by corresponding obligations of third parties. Contingent liabilities and commitments comprise performance bonds, acceptances, guarantees and letters of credit. In the normal course of business, the Group is a party to financial instruments with off-balance sheet risks. These instruments are issued to meet the credit and other financial requirements of customers. The total off-balance sheet assets for the Group was N200.575 billion (December 2017: N320.15 billion). The following tables summarise the nominal principal amount of contingent liabilities and commitments with off-financial position risk:

Performance bonds and guarantees Letters of credit

31

Group

Group

Bank

Bank

31 March 2018 N million 82,446 72,360 154,806

31 December 2017 N million 64,321 55,798 120,119

31 March 2018 N million 82,446 72,360 154,806

31 December 2017 N million 64,321 55,798 120,119