Unity Bank Aggressively Drives Retail Growth, Grows Earnings to N27.5bn
By Aduragbemi Omiyale
Despite the harsh operating environment and the unexpected policies of the government that affected businesses in Nigeria, Unity Bank Plc showed resilience in the first six months of 2023.
In its half-year unaudited financial statements filed to the Nigerian Exchange (NGX) Limited over the weekend, the bank marginally improved its gross earnings by 0.37 per cent to N27.5 billion from N27.4 billion in the first half of last year.
It was observed that 10 per cent growth in the fees and income commission to N3.5 billion from N3.2 billion helped the lender jerk up its income in the period under consideration.
This was influenced by the growing popularity of the company’s digital banking platforms and customers’ acquisition in the retail space.
The result of this aggressive retail growth was manifested in a 2 per cent increase in customer deposits to N333.38 billion from N327.42 billion, as it offered well-diversified banking product suites that cater to different segments of the retail market.
Also, Unity Bank’s strategic focus on diversifying and growing its earnings portfolio led to a 17 per cent rise in foreign exchange (FX) income to N239.8 million from N204.4 million.
However, the forex revaluation due to the FX liberalization policy of the Central Bank of Nigeria (CBN) impact negatively on the bank’s profit.
“In the light of the prevailing FX revaluation in the financial system, what we have is a market-driven impact which is adjustable and envisaged from the positive economic outcomes of the government policies in the near term.
“Be that as it may, the negative shareholders’ fund has improved considerably through the injection of N135 billion, which moderated the negative shareholders’ fund from (-ve) N275 billion in December 2022 financial year-end to (-ve) N178 billion as at the end of June 2023, after absorbing the FX revaluation loss suffered in Q2/2023.
“We are, however, focused with clear-cut plans to close out on our recapitalization programme very soon to enable us to do business as expected in the fast-growing markets in Nigeria,” the Managing Director/CEO of Unity Bank, Mrs Tomi Somefun, said.
The bank chief said the company remains optimistic that the government’s policy initiatives will lead to correction in the market, as the bank has accelerated measures to ramp up asset creation and liability generation in the short and medium term.
According to her, the Bank is aggressively driving its retail growth in every segment of the market, expanding strategic partnerships, and growing commercial banking business to develop new and sustainable income lines for the bank as well as pay sufficient attention to fast-paced process automation, cost and resource efficiency, targeted value chain relationships, and product marketing to enhance value creation in the market.
A quick look at other highlights of the unaudited results showed that total assets rose on a year-to-date basis to N512.1 billion from N510.1 billion, the net loans portfolio reduced to N198.6 billion from N289.4 billion, the non-performing loan (NPL) ratio remained moderate at below 3 per cent, and the liquidity ratio stood strong at over 45 per cent.
From the analysis of the financial statements, experts opined that notwithstanding the market shocks currently being experienced, Unity Bank is still on course, given the resilience it has demonstrated over time.