Economy
Unity Bank’s Diversification Strategy Buoys Nine-Month Profit by 23%
By Dipo Olowookere
The management of Unity Bank Plc is gradually showing that the strategies put in place if allowed a little more time, could work magic and turn the fortunes of the company around and make it one of the dominant forces in the Nigerian banking industry.
Some hours ago, the lender released its financial statements for the period ended September 30, 2021, and a review showed that the pre-tax and net profit grew each by 23 per cent.
According to the analysis by Business Post, the profit before tax went up to N2.1 billion from N1.7 billion in the corresponding period in 2020, while the post-tax profit rose to N1.9 billion from N1.6 billion.
It was observed that the bank was able to pull this double-digit growth despite the fragile recovery and volatilities in the operating environment and key macroeconomic indicators following the global COVID-19 pandemic, weak market sentiments and inflationary trends, as well as tough regulatory headwinds that have impacted severely on economic activities.
The few things that helped Unity Bank navigate through the stormy waters were excellent service delivery to its banking customers, strategic refocussing of its business and diversification of its earnings base as well as the significant investment made in the development of the retail market in order to grow its market share in various target segments by scaling up operations in the niche market.
As a result, the firm was able to record a moderate increase, 7 per cent, in gross earnings to N36.2 billion from N33.9 billion recorded in the same period in 2020.
According to the financial statements filed to the Nigerian Exchange (NGX) Limited, the lender substantially grew its net interest income to N14.6 billion from N12.7 billion, creating a 15 per cent uptick from the value of the bank’s rising loan portfolio and an improvement in its transaction banking activities with its customers, achieved through excellent service delivery.
The fees and commissions averaged 16 per cent to report an increase of N4.6 billion from N3.9 billion within the period under review, attributable to a dividend of the bank’s strategic retail play which has boosted transaction volume.
In addition, Unity Bank reported a 31 per cent growth in its loan book to N265.3 billion from N202.1 billion recorded in 2020, while the asset base went up by 17 per cent to N574.6 billion from N492.0 billion recorded in December 2020.
The sterling performance of the company in the nine-month period excited the Managing Director/CEO of Unity Bank, Mrs Tomi Somefun, who said the performance indicators were satisfactory to her.
She said particularly inspiring are the growing loan book and quality of assets (31 per cent growth), cash and balances with the CBN (24 per cent growth) and PBT (23 per cent growth), altogether adding to the consecutive growth of the balance sheet in the last couple of years.
“The market is increasingly beginning to see the efforts in the strategic refocussing of our business and diversification of our earnings base which is translating into tangible results even as we strive to meet the expectations of our esteemed customers and cherished stakeholders.
“In addition, she said that while the bank’s focus on agribusiness has provided both brand and business benefits while the institution has also made a significant investment in the development of the retail market in order to grow its market share in various target segments by scaling up operations in the niche market,” she said.
Mrs Somefun also stated that the bank will remain dynamic by embracing current and emerging market trends in technology, effectively targeting the youth market, driving financial inclusion in the women segment, developing robust product marketing to create value through a focus on digital strategies to facilitate transaction and e-banking channels.
Looking ahead, Mrs Somefun said, “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’s 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.”
Analysts believe that the consistent growth trajectory in the bank’s balance sheet as shown in Q1, H1 and Q3, 2021 results continue to reinforce growing market confidence as well as demonstrate the commitment and drive of the management to enhance shareholder’s value.
By Adedapo Adesanya
Pressure is beginning to mount on the Nigerian Naira in the different segments of the foreign exchange (FX) market despite an oil windfall triggered by the Middle East crisis.
On Monday, April 27, the domestic currency further weakened against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) by N16.47 or 1.2 per cent to N1,380.71/$1 from the previous day’s N1,364.24/$1.
It was not different against the Pound Sterling in the same market window, as it lost N16.04 to trade at N1,863.76/£1 versus Monday’s closing rate of N1,847.72/£1, and against the Euro, it slipped by N12.72 to close at N1,615.01/€1 versus N1,602.29/€1.
The Naira also depreciated against the Dollar at the black market yesterday by N5 to quote at N1,390/$1 compared with the previous price of N1,385, and at the GTBank forex counter, it further crashed by N9 to settle at N1,379/$1 compared with the preceding session’s N1,370/$1.
The continued decline of the Naira comes as traders increasingly seek other safe-haven currencies amid continued global disruptions.
The benefit awash in the global market is making foreign portfolio investors stay short in Nigerian markets. Despite this, the daily FX publication released showed that interbank turnover rose to $98.829 million across 78 deals, up from $76.65 million.
Meanwhile, the cryptocurrency market remained cautious, with Bitcoin (BTC) trading at $77,216.66 despite surging oil prices and geopolitical tensions over a potential extended US naval blockade of the Strait of Hormuz.
Analysts say the supply overhang has finally dried up, and the sellers who were spooked by macro shifts or quantum fears have already exited, leaving the market much thinner on the sell-side.
Investors will await decisions made by central banks this week. The US Federal Reserve will announce its rate decision later on Wednesday, while the European Central Bank (ECB) follows on Thursday.
Ethereum (ETH) gained 1.5 per cent to trade at $2,324.59, Dogecoin (DOGE) chalked up 1.4 per cent to sell for $0.1016, Solana (SOL) appreciated by 0.6 per cent to $84.85, Cardano (ADA) grew by 0.5 per cent to $0.2483, and Binance Coin (BNB) advanced by 0.2 per cent to $627.15.
However, TRON (TRX) depreciated by 0.6 per cent to $0.3224, and Ripple (XRP) lost 0.03 per cent to sell at $1.39, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) were unchanged at $1.00 each.
By Adedapo Adesanya
Oil was up by nearly 3 per cent on Tuesday as persistent worries about supply constraints from the closed Strait of Hormuz continued, with Brent futures for June rising by $3.03 or 2.8 per cent to $111.26 a barrel, and the US West Texas Intermediate (WTI) crude futures growing by $3.56 or 3.7 per cent to $99.93 a barrel.
An earlier round of negotiations between the United States and Iran collapsed last week after face-to-face talks failed.
Ship-tracking data showed significant disruptions in the region, with six Iranian oil tankers forced to turn back due to the US blockade, but some traffic is still moving.
Prices trimmed some of the advances after the United Arab Emirates (UAE), the fourth-largest producer in the Organisation of the Petroleum Exporting Countries (OPEC), said on Tuesday it would exit the group on this Friday, May 1, 2026.
This dealt a blow to the oil-exporting group and its de facto leader, Saudi Arabia.
The UAE could quickly add between 1 million and 1.5 million barrels per day of output. However, with the Strait of Hormuz effectively closed, analysts said that there’s nowhere for that supply to go.
The UAE joined OPEC in 1967, but tension with Saudi Arabia over production quotas has been building for years.
Under the OPEC+ deal, the country has been held to roughly 3 million barrels per day while sitting on capacity above 4 million. It has been pushing toward 5 million barrels per day by 2027, and that target is hard to achieve with quotas built around someone else’s view of the market.
The war in Yemen broke whatever was left of diplomatic patience.
President Donald Trump said he was unhappy with the latest Iranian proposal to end the war. The proposal would avoid addressing the nuclear programme until hostilities cease and Gulf shipping disputes are resolved.
The Idemitsu Maru, a Panama-flagged tanker carrying 2 million barrels of Saudi oil, and an LNG tanker managed by the Abu Dhabi National Oil Company (ADNOC) crossed the Strait on Tuesday, shipping data showed.
Vortexa data showed that the amount of crude oil held around the world on tankers that have been stationary for at least seven days rose to 153.11 million barrels as of April 24.
The American Petroleum Institute (API) estimated that crude oil inventories in the United States fell by 1.79 million barrels in the week ending April 24. The official data from the US Energy Information Administration (EIA) will be released later on Wednesday.
By Dipo Olowookere
The Nigerian Exchange (NGX) Limited returned to winning ways on Tuesday after it closed higher by 2.30 per cent amid cautious trading.
Yesterday, investor sentiment at the Nigerian stock market was weak after finishing with 37 price gainers and 40 price losers, indicating a negative market breadth index.
It was observed that the industrial goods sector rose by 4.86 per cent, the energy index appreciated by 4.66 per cent, and the consumer goods segment soared by 2.74 per cent. They offset the 1.38 per cent loss recorded by the banking counter and the 0.20 per cent decline printed by the insurance sector.
At the close of business, the All-Share Index (ASI) was up by 5,137.90 points to 228,740.19 points from 223,602.29 points, and the market capitalisation went up by N3.308 trillion to N147.278 trillion from N143.970 trillion.
The trio of FTN Cocoa, Industrial and Medical Gases, and Lafarge Africa gained 10.00 per cent each to sell for N5.50, N39.60, and N324.50, respectively, while Austin Laz grew by 9.71 per cent to N3.73, and Aradel Holdings jumped 9.52 per cent to N1,840.00.
On the flip side, UBA lost 10.00 per cent trade at N44.55, Trans-Nationwide Express slipped by 9.99 per cent to N6.40, NASCON crashed by 9.18 per cent to N187.90, Jaiz Bank depreciated by 8.93 per cent to N8.01, and Berger Paints crumbled by 8.66 per cent to N68.00.
Yesterday, market participants traded 908.0 million equities valued at N68.2 billion in 72,886 deals compared with the 678.2 million equities worth N44.1 billion transacted in 82,838 deals on Monday, showing a drop in the number of deals by 12.01 per cent, and a spike in the trading volume and value by 33.88 per cent and 54.65 per cent, respectively.
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