Unity Bank Targets N8bn Profit in Half Year

Unity Bank Targets N8bn Profit in Half Year

 By Emele Onu, 06.29.2010

Indications emerged yesterday that Unity Bank Plc might record a profit of about N8 billion for the half year ended June 30, 2010. This according to information marks a clean break from the loss recorded in the 2009 financial year. The bank also projects its profit to climb to over N10billion by the end of 2010 financial year.



Group Managing Director of the bank, Falalu Bello, who intimated journalists about these developments but declined giving specific figures, said : “Our Management Accounts for the second quarter of 2010 will be released in a couple of weeks and we may surprise some people. Our business strategy is working and the results are truly expected,” 

Sources said the bank has beefed up its capital from various sources and has regained strength and competiveness as evident in the results expected in the running year.  The bank’s capital may have been sourced through new investors, sale of non-banking assets and divestment from non-core banking businesses as well as recoveries.

Bello said: “We have raised funds from the various initiatives that we are implementing and are continuing to do so. We are submitting all details relating to this issue to the regulators and will only make public our position as soon as we obtain necessary approvals from the CBN as required by law.” Currently, Unity Bank is undertaking a rights issue, which is aimed at reducing public sector holding in the bank. It seeks to raise another N24 billion, indicating that the bank may well be on its way to far exceed the subsisting 10 per cent capital adequacy ratio required by the Central Bank of Nigeria (CBN).

On the new CBN policy of scrapping universal banking licences and against the background of some banks opting for regional banking, Bello explained: “We are not a regional bank and have never been. Unity Bank is a national franchise with operations pan-Nigeria. We shall remain national in our operations and outlook. This had always been our strategy and it has not changed. With 222 fully operational branches spread across the country and still counting, we are one of Nigeria’s largest banks in terms of spread and we cannot change our position as one of the nation’s leading retail banks.”

Following the August 14, 2009 CBN/Nigeria Deposit Insurance Corporation (NDIC) stress examination of the banking industry, Unity Bank was adjudged to have sound corporate governance and sufficient liquidity. The banking watchdog however, mandated the bank to increase its capital in order to be able to support its current level of operations.  But with the current developments, the bank seems positioned for the future even as it continues with its “Rights Issue”. The acceptance list of which opened on June 4 and will close July 13, 2010, as approved by the Securities and Exchange Commission (SEC).

The Board of Directors of Unity Bank and its financial advisers had at their Completion Board Meeting of May 26, 2010 decided to roll out 23.928 billion ordinary shares of 50 kobo each at N1 per share to shareholders on the basis of three new shares for every two shares already held. An estimated N24 billion is expected to be raised from existing shareholders of which 50 per cent or N11.66 billion is to become part of the bank’s working capital/project finance; 25 per cent or N5.8 billion has been earmarked for branch expansion; 10 per cent or N2.3 billion each for technology enhancement  and human capital development, while the five per cent or N1.16 billion balance will be channeled towards the  bank’s brand development programme.

In his letter to shareholders, presented at the Completion Board Meeting, the Chairman of Unity Bank, Prof. Akin Mabogunje, had said that the board and management of the bank are confident that Unity Bank will continue to exist as a going concern and record significant growth and improvement in its operations over the coming years. 

Unity Bank and Wema Bank were however, yesterday given an extension to three months by the CBN, having acknowledged the delay in the recapitalisation of banks from the prolonged passage of the asset management corporation of Nigeria (AMCON) Bill.




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