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
The Organisation of the Petroleum Exporting Countries (OPEC) has once again trimmed its 2024 and 2025 oil demand growth forecasts.
The bloc made this in its latest monthly oil market report for December 2024.
The 2024 world oil demand growth forecast is now put at 1.61 million barrels per day from the previous 1.82 million barrels per day.
For 2025, OPEC says the world oil demand growth forecast is now at 1.45 million barrels per day, which is 900,000 barrels per day lower than the 1.54 million barrels per day earlier quoted.
On the changes, the group said that the downgrade for this year owes to more bearish data received in the third quarter of 2024 while the projections for next year relate to the potential impact that will arise from US tariffs.
The oil cartel had kept the 2024 outlook unchanged until August, a view it had first taken in July 2023.
OPEC and its wider group of allies known as OPEC+ earlier this month delayed its plan to start raising output until April 2025 against a backdrop of falling prices.
Eight OPEC+ member countries – Saudi Arabia, Russia, Iraq, United Arab Emirates, Kuwait, Kazakhstan, Algeria, and Oman – decided to extend additional crude oil production cuts adopted in April 2023 and November 2023, due to weak demand and booming production outside the group.
In April 2023, these OPEC+ countries decided to reduce their oil production by over 1.65 million barrels per day as of May 2023 until the end of 2023. These production cuts were later extended to the end of 2024 and will now be extended until the end of December 2026.
In addition, in November 2023, these producers had agreed to voluntary output cuts totalling about 2.2 million barrels per day for the first quarter of 2024, in order to support prices and stabilise the market.
These additional production cuts were extended to the end of 2024 and will now be extended to the end of March 2025; they will then be gradually phased out on a monthly basis until the end of September 2026.
Members have made a series of deep output cuts since late 2022.
They are currently cutting output by a total of 5.86 million barrels per day, or about 5.7 per cent of global demand. Russia also announced plans to reduce its production by an extra 471,000 barrels per day in June 2024.
By Aduragbemi Omiyale
A minority equity stake in Chappal Energies Mauritius Limited has been acquired by a Nigerian energy firm, Aradel Holdings Plc.
This deal came a few days after Chappal Energies purchased a 53.85 per cent equity stake in Equinor Nigeria Energy Company Limited (ENEC).
Chappal Energies went into the deal with Equinor to take part in the oil and gas lease OML 128, including the unitised 20.21 per cent stake in the Agbami oil field, operated by Chevron.
Since production started in 2008, the Agbami field has produced more than one billion barrels of oil, creating value for Nigerian society and various stakeholders.
As part of the deal, Chappal will assume the operatorship of OML 129, which includes several significant prospects and undeveloped discoveries (Nnwa, Bilah and Sehki).
The Nnwa discovery is part of the giant Nnwa-Doro field, a major gas resource with significant potential to deliver value for Nigeria.
In a separate transaction, on July 17, 2024, Chappal and Total Energies sealed an SPA for the acquisition by Chappal of 10 per cent of the SPDC JV.
The relevant parties to this transaction are working towards closing out this transaction and Ministerial Approval and NNPC consent to accede to the Joint Operating Agreement have been obtained.
“This acquisition is in line with diversifying our asset base, deepening our gas competencies and gaining access to offshore basins using low-risk approaches.
“We recognise the strategic role of gas in Nigeria’s energy future and are happy to expand our equity holding in this critical resource.
“We are committed to the cause of developing the significant value inherent in the assets, which will be extremely beneficial to the country.
“Aradel hopes to bring its proven execution competencies to bear in supporting Chappal’s development of these opportunities,” the chief executive of Aradel Holdings, Mr Adegbite Falade, stated.
By Adedapo Adesanya
Afriland Properties Plc helped the NASD Over-the-Counter (OTC) Securities Exchange record a 0.04 per cent gain on Tuesday, December 10 as the share price of the property investment rose by 34 Kobo to N16.94 per unit from the preceding day’s N16.60 per unit.
As a result of this, the market capitalisation of the bourse went up by N380 million to remain relatively unchanged at N1.056 trillion like the previous trading day.
But the NASD Unlisted Security Index (NSI) closed higher at 3,014.36 points after it recorded an addition of 1.09 points to Monday’s closing value of 3,013.27 points.
The NASD OTC securities exchange recorded a price loser and it was Geo-Fluids Plc, which went down by 2 Kobo to close at N3.93 per share, in contrast to the preceding day’s N3.95 per share.
During the trading session, the volume of securities bought and sold by investors increased by 95.8 per cent to 2.4 million units from the 1.2 million securities traded in the preceding session.
However, the value of shares traded yesterday slumped by 3.7 per cent to N4.9 million from the N5.07 million recorded a day earlier, as the number of deals surged by 27.3 per cent to 14 deals from 11 deals.
Geo-Fluids Plc remained the most active stock by volume (year-to-date) with 1.7 billion units sold for N3.9 billion, trailed by Okitipupa Plc with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with 297.5 million units worth N5.3 million.
Also, Aradel Holdings Plc remained the most active stock by value (year-to-date) with 108.7 million units worth N89.2 billion, followed by Okitipupa Plc with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with 297.5 million units sold for N5.3 billion.
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