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Q3: Unity Bank sparkles amidst macro-economic challenges



Forex revaluation loss worsens Unity Bank’s woes

By Okey Onyeweaku

Nigerian lender, Unity Bank Plc has recorded gross earnings of N36.18 billion for the nine-months ending September 30, 2021,representing a 7 per cent growth from the N33.8billion it achieved in the corresponding period of 2020.

The lender’s profit before tax also rose by 23 per cent to N2.105billion in 2021 from N1.710billion in 2020. Equally, profit-after-tax also jumped 23 per cent totaling N1.94 billion in the review period.

Analysts also noted that the strong performance recorded during the period under review has very likely been buoyed by a 31% growth in its loan book to N265.32 billion from the N202.08 billion recorded in 2020,

At the same time, Unity Bank grew its asset base by 17% to N574.56 billion from N492.02 billion recorded in December 2020. Indeed, this is no mean performance given the ravaging effects of Covid-19 and other volatilities in the macro-economic environment which include insecurity, weak market sentiments and long-spiralling inflationary trends that however seem to now be gradually abetting.

The bank also grew its net interest income to N14.63 billion from N12.67 billion in the same period in 2020.

The lender’s fees and commissions grew 16% to N4.56 billion from N3.92 billion within the period under review, made possible by deliberate retail business.

The bank had posted gross earnings of 23.6 billion Naira in half year, which is a three per cent increase compared with the corresponding period of 2020.

It also grew bottom-line by 34 per cent as Profit before Tax (PBT) moved up significantly in positive territory to close at N1.50 billion from N1.12 billion recorded in H2 2020.

Similarly, the Profit After Tax, PAT closed at N1.38 billion within the period under review from N1.03 billion recorded in the corresponding period of 2020, a sign of a stronger recovery in the overall economy and the Bank’s key focus market segment after a disruptive pandemic year.

The bank achieved the above amidst the negative impact of Covid-19 which joined other factors in ensuring that Nigeria plunged into a recession in the second quarter of 2020. However, the economy slowly rallied to grow by 0.11 per cent at the end of the fourth quarter; grew again by 0.51 per cent in first quarter 2021 and then by a COVID-reversing 5.1 per centin second quarter of 2021, up from a -6.1 per cent negative position in 2020.

Yet this does not change the pessimism of many who believe the economic managers and the government are still not on the right path more so when other core economic fundamentals remain largely southward.

Going to deeper grounds, recent statistics reveal that the rate of unemployment, the second highest in the world is 33%. At the same time, the underemployment rate stood at 22%; even as inflation, which had hit above 18 per cent earlier in the year is still high at 16.01 per cent. At the same time, Nigeria has accumulated a total debt stock of N38trillion which is even still growing

Looking ahead, Managing Director of Unity Bank, Mrs. Somefun stated: “We are optimistic that nothing will threaten to upend the current COVID-19 recovery, especially as the bank is poised towards building an increased momentum to ride the wave of the economic headwinds, even as the growing inflationary pressures and the soaring energy prices still remain a concern.”

According to the Unity Bank boss, “Ours is a continuous balancing act and revolutionary performance towards repositioning the business nationwide via tapping into emerging opportunities across the banking space, including the digital financial services spheres.”

In the first quarter of this year, its profit before tax grew by 43 per cent to N784.3 million from N550.1 million recorded in the corresponding period of 2020. while the bank said it improved its bottom line marginally as profit after tax (PAT) stood at N2.09 billion while profit before tax (PBT) closed at N2.22 billion.


It has not been too easy for the bank in the last five years from 2016 to 2020 given the harsh operating environment. The bank in fact posted a profit of N1.8billion in 2016 and thereafter plunged into a huge loss of N14.24billion in 2017. The loss situation eased to N7.55 billion negative in 2018 before it achieved profit of N3.6billion in 2019 and closed the year 2020 with profit before tax of N2.22billion.


From what can be seen there appears to be a conscious effort by the bank to enhance its brand recognition (a deed marketing professionals have considered crucial to its repositioning) and push for growing share of the risky but prospectively lucrative small and medium sized enterprise (SME) business. The new managers of the bank equally seem to be concerned about growing the bank’s corporate banking activities as they improve upon the bank’s technology applications and platforms. This effort might prove to be a hard road to travel.

The corporate and consumer end of the Nigerian banking market seems to have been tied up by the four top banking franchises in the country who are responsible for over 70 per cent of the business in this market segment, taking them on frontally would be financially suicidal for Unity Bank. Not only does the bank lack the financial muscle to increase its market share from these juggernauts, but it also lacks the personnel and public confidence. Nevertheless, this does not mean that the bank cannot make inroads into the less captive retail parts of the business.


Indeed speaking on the banks recent results it’s newly appointed Managing Director, Tomi Somefun, noted that, “the key performance indicators point to increasing resilience in the face of challenging economic headwinds that characterized the operating environment this year.

“Despite the harsh operating environment, the Bank remains stable having driven strategic choices to inspire greater market confidence and leveraging cost optimization strategies, presence in the Northern markets which served as a bulwark, just as the deepening of our presence in Lagos /Southwest also balanced its outlook in the Southern markets.


One group believes that Unity Bank has performed fairly-well, not recording losses at one of the most challenging times in the economy’s history. The other group argues that its profit decline has hurt its various stakeholders no less so than its equity holders. Its share price still remains one of the lowest in the sector at N0.55 per share as at November 10, 2021. The reason for this is not far-fetched.

Perceptions are that almost all incarnations of Unity Bank have been fringe banking sector players (including the Bank of the North), and no one of them came close to being in the top ten ranked institutions. A few of them were also very weak before the banking consolidation. For instance, the likes of First Interstate Bank, Tropical Commercial Bank, Centre-Point Bank, NNB International Bank, Societe Bancaire and New Africa Bank had started showing signs of distress before the banking consolidation of 2005. These banks include Intercity Bank Plc, First Interstate Bank Ltd, Tropical Commercial Bank Plc, Pacific Bank Limited, Centre –Point Bank Plc, Societe Bancaire Limited, NNB International Bank Plc and Bank of the North Limited and New Africa Bank Limited.

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