By The Source
Unity Bank appears to have escaped impairments that slowed down growth for the mid-tier bank in the last few months.
Recall that the Nigerian Stock Exchange, NSE placed the Tomi Shomefun-led bank on suspension for failure to file its financial statements last November.
But in what keen market analysts described as a rebound, the bank has announced N643m profit before tax for the nine months financial period ending September 30th, 2018.
Notably, analysts insist that the bank has shown increased presence in the agro-business sector by providing finances various agricultural finance scheme initiatives of the Central Bank of Nigeria (CBN).
The bank is 4th largest provider of single digit interest loans (9% max) to Agribusinesses under the CBN’s Commercial Agriculture Credit Scheme (CACS); with a CACS loan portfolio of over N24 billion.
It showed much activity in the CBN’s Anchor Borrower Scheme by disbursing over N1.6 billion to 11,000 wheat farmers in Jigawa and Sokoto States.
This initiative, analysts say is a plus to the flour value chain and contribution to the economic diversification policy of the current government. .
The question on the lips of market analysts is whether the result is a good sign that the bank has successfully navigate its challenges and positioned for better performance. May be.
According to the report released to the NSE, the bank said it has now been positioned on path of sustained growth as a result of various reforms introduced by the management.
“The year’s performance is supported by noticeable fundamentals derived from the Bank’s corporate action to clean up its book by eliminating all the legacy non-performing loans (NPLs) which resulted in full de-risking of its balance sheet and creating a new lease of life for the Bank,” it said in a statement.
The result showed that impairment dropped to zero from N16.47 billion at the end of December 31st 2017while credit lose expense dropped to N514.211 million in September 30, 2018 from N27.78 billion at the end of 2017.
Meanwhile, profit before tax dropped by 71.6 percent to N643.8 million from N2.720 billion in the corresponding period in 2017, while revenue fell by 60 percent to N65.027 billion from N26.125 billion compared to 2017.
The bank also showed noticeable performance on other key fundamentals.
Net Operating Income for the year ended December 31, 2018 growing by 112% to N21.63 billion from N10.22 billion in the corresponding period of 2017 while Non-Interest Income increased to N6.3billion from N1.61bn recorded in 2017 and earnings per share (EPS) for the year 2018 stood at 13.03 kobo, up from negative of 127kobo recorded in 2017 FY.
Aside strategic corporate actions taken by the bank to prioritize customer service the management also prioritize product delivery as well as optimize operations for maximum efficiency and sustained performance.
Part of which is the launch of a youth-focused UniFi application, a robust omni-channel app that goes beyond banking services but also offers lifestyle services including gamification for increased customer satisfaction.
Alongside aggressive transaction push has led to a 290% increase in non-interest income (income from transactions, cards, mobile, ATMs, commissions & fees, FX etc.), the bank said.
Also recently launched is Unity 1 Account, an electronic product that puts customers in charge of their banking experience, offering greater electronic convenience and interactivity for online account opening with minimal documentation.
In effect, the increased digital initiatives is reflected in the bank’s electronic banking income which grew by 86% percent to N488.674 million in September 30, 2018, from N262.795 million in September 30, 2017.
A source in the bank told the magazine last week that what is priority now to the management is to recapitalize and that talks are ongoing with prospective foreign and local investors.