CBN Says No Plan to Nationalise Unity Bank
The Central Bank of Nigeria (CBN) has denied a media report that the apex bank planned to nationalise Unity Bank Plc, described the report as a piece of fake news. Though the bank’s balance sheet appears broken; some analysts believe Unity Bank has been enjoying the CBN support.
In a reaction, Osita Nwanisobi, Head Corporate Communication as CBN, in a statement advised customers and other stakeholders of the bank to disregard the report, describing it as the handiwork of mischief-makers.
He said: “The report is fake news. There is no iota of truth in it.”
The report had claimed that the apex bank’s target examination of Unity Bank showed that the Tier 2 lender is in, “grave financial condition”, with Capital Adequacy Ratio (CAR) and Non- Performing Loans (NPL) ratio that breach prudential standards.
Meanwhile, at the Monetary Policy Committee (MPC) meeting in May, the CBN had noted in the communiqué issued that the banking industry is in good health
According to the communique: “the Capital Adequacy Ratio (CAR) and the Liquidity Ratio (LR) both remained above their prudential limits at 15.8 and 38.9 %, respectively. The Non-Performing Loans (NPLs) at 5.89 % in April 2021, showed progressive improvement compared with 6.6 % in April 2020.”
Unity Bank profit falls more than 38% in the financial year 2020 to N20.86 billion following the outbreak of the coronavirus pandemic which took a heavy blow on the lender’s operation.
In its audited financial statement submitted to the Nigerian Exchange, the bank announced that its total expanded 68% to N492.02 billion from N293.052 billion in 2019.
According to the figure, the increase in the bank total assets was driven by an addition to loan book and a significant uptick in other assets. Unity Bank customers’ deposits surged 34.4% to N356.62 billion from N257.69 billion posted in the corresponding period of 2019.
In 2020, the bank’s earnings profile was affected as it delivered gross earnings of N42.71 billion, falling below N44.59 billion recorded in 2019. Following the plunge, profit after tax stood at N2.09 billion, while profit before tax closed at N2.22 billion during the year under review.
Its net operating income rose to N25.46 billion from N23.21 billion in the corresponding period of 2019, representing a 9.71% increase. This is even as the net interest income recorded a significant jump, as it rose by 7.60% to N17.75 billion from N16.49 billion in the corresponding period of 2019.
The bank’s gross loans portfolio increased by 92.9% to N206.2 billion in the review period, from N106.9 billion in 2019.
The Managing Director/Chief Executive Officer of the bank, Mrs. Tomi Somefun, said the results showed the resilience during times of uncertainties and ability to focus on key balance sheet items to maintain growth trajectory.
“Consequently, for the year under review, the opportunities to create more quality assets for the business, thought to have sustainable impact, informed part of choices made.
“And we have seen some encouraging market uptake in this regard, apart from the benefits to the enterprise bottom-line that have also started trickling in.
“The bank deployed new products and augmentation supported by omni-channel, USSD promotions and other channels to enhance service delivery efficiency, drive income generation capacities and enhance steady balance sheet growth,” Somefun said.
She said the bank would latch on targeted strategies to deploy significant investment in technology in order to ride the waves of the COVID-19 pandemic.
According to him, the bank will focus on achieving major efficiency gains, deepening its retail footprints and penetrating identified cluster market segments, to tap into various youth markets.
“The bank is also looking to consolidate the gains from its core business areas and niche in the agribusiness sector. The bank has solidly financed over one million farmers over the past three years.
“These farmers cut across several primary crop production such as rice, maize, cotton, wheat, sorghum, etc coupled with their rich value chains.
“We hope to continue to expand on this as we play our part in driving the country’s quest for self-sufficiency in food production,” she added.
Similarly, Mr. Usman Abdulqadir, Unity Bank, Executive Director, said the bank would change the narrative in the agriculture sector by focusing on younger farmers.
Abdulqadir said the bank would focus on younger farmers below 40 years with better knowledge of technology and best practices to boost yields.
He said the bank wanted to make the younger generation interested in agriculture, noting that 65 % of the nation’s population was within 18 and 35 years.
CBN Says No Plan to Nationalise Unity Bank