UNITYBNK Releases Q1, Q2 and Q3 2018 Results; Declares N585.84m PAT in Q3 (SP:N0.78k)


 Thursday, November 01,  2018 / 07:55 PM / NSE

Proshare Nigeria Pvt. Ltd.



performance brief

With the exception of negative capital base, underlying financial indices largely point to the potential existing for the Bank, including:


  • Liquidity ratio of ~35%
  • Loan-to-Deposit Ratio of 3.6%, showing significant room for growth and the attendant income boost
  • NPL ratio of 0%
  • Elimination of Goodwill from the Bank’s books
  • A strong e-banking footprint & a focus on Banking of the future
  • Strong competence and reach in Agriculture/SME Banking


facts behind the figures

Financial performance declined in 2017, as the Bank took the bold action to tackle the lingering effects of legacy problems, which were further exacerbated by the severe economic downturn witnessed in the Nigerian Economy.

Having done a thorough diagnostics of the Bank, the new Board & Management of the Bank took firm and strategic action in a bid to eliminate the drag on the Bank in the form of huge legacy non-performing loans, an inefficient operating structure which manifested in excessive costs, poor branch spread and inadequate application of technology amongst others.

These strategic initiatives, amongst others, are geared towards a complete transformation of Unity Bank and setting her up on the path of strong and sustainable growth and profitability.

The courageous action taken by the Bank towards cleaning up the observed issues thus resulted in a negative capital base, however resulting in a leaner, smarter and dynamic Bank with a healthy Balance Sheet. Furthermore, with the progress being made on the ongoing capital raising, the Bank is firmly on course to achieve sustainable growth and sound performance.


Management action taken have included the following:

  • Sale of toxic non-performing loan portfolio. This led to a de-risking of the Financial Position, creating a balance sheet completely healthy and free of NPLs.
  • Along with the sale of NPLs, the Bank’s risk framework has been overhauled, with greater investment in risk analytics, processing, collateral coverage, amongst other measures. This is to ensure that the problems of the past do no recur and that a healthy risk portfolio is maintained going forward.
  • Process reviews and automation towards achieving improved service delivery and a customer-centric outlook.
  • Investment in technology and product line up. The Bank is now well placed to leverage on current and emerging market trends, improve service delivery and boost e-business.
  • Branch optimization: this involves branch re-design, relocation or closures in some instances. This is geared to improve cost efficiencies while setting the Bank up to tap market potential in a more productive way. This is still an ongoing exercise.
  • Re-capitalization program: the Bank is currently at advanced stages of the recapitalization program, with ongoing engagement with a number of potential investors. The Bank is extremely confident that significant achievements will be recorded very shortly.

Consequent on the above, the Bank is on the verge of becoming one of the leading financial institutions in the country, with the following strengths particularly vital:


  1. Liquidity and working capital to be significantly enhanced. With the injection of funds, the Bank will be one of the most liquid Banks, if not the number 1 in terms of liquidity.
  2. With a 0% NPL ratio along with the enhanced credit management process, the Bank has finally put the past behind it and is poised to achieve major growth in revenue and profitability.
  3. With the capital injection and with the expected positive Shareholders’ Funds, the Bank is on course to achieve a capital adequacy well above regulatory minimum.
  4. With a relatively low-cost structure and strong deposit structure with emphasis on low-cost funds, the Bank is well placed for stable and sustainable growth.

Unity Bank’s strategic initiatives: looking forward

Following from the new Management’s extensive diagnostics of the Bank, a number of strategic initiatives were identified and put into process for implementation, shaping Unity Bank as a Bank of the present times and dynamic to serve the future. These initiatives include:


Revised market focus: The new management of the Bank considers new imperatives for long term business growth. With a view to obtaining value and providing significant support for the economic growth plan of the Federal Government, key area of focus for the Bank are identified in the area of

1.      Agriculture and agro-allied financing

2.     Financial Inclusion with specific attention to:

      • Youth & Digital Banking
      • Women Financing

3.     MSME Banking

Enhanced Retail Banking drive: As part of a 5-year strategic transformation plan which commenced in 2015, Unity Bank further accelerated its Retail and SME drive in 2018 with four tactical initiatives.

ü  Launch of the UniFi Youth banking platform. As part of the program, the Bank also held 6 campus storm events across all the geo-political regions.


The UniFi program featured a brand ambassadorship arrangement with Adekunle Gold (one of Nigeria’s leading artistes), with the inaugural launch held at the University of Lagos, and with further events held at University of Jos, University of Ibadan, University of Benin, Bayero University Kano, and University of Abuja. The program was a first of its kind which took the “banking hall to the student”, with instant account opening on a mobile device, BVN registration, instant card issuance and free Wi-Fi to enable students download the bank’s revamped Mobile App.


ü  The re-launch of the Bank’s Mobile App, an omni-channel platform with state-of-the-art security features as well as lifestyle benefits. The App, which is available on all the major App Stores, was an instant hit with the students and wider user range, as it comes with card control features, which protect the customer’s account in case of fraud. Additionally, it was a pioneering App in the industry to allow customers pay for movie and event tickets directly from the App. The platform is fully omni-channel, offering customers the same interface on both the web/internet banking as well as on a device app.


ü  Thirdly, Unity Bank facilitated breaking of new grounds in Public-Private Partnership, by partnering with CBN and RIFAN (the Rice Farmers Association of Nigeria) to deliver on the long-held objective of ensuring self-sustainability in Rice production in the country. The program is one of the biggest and most complex anchor-borrower programs ever embarked upon, and it has so far succeeded in engaging over 300,000 farmers, cultivating over 260 thousand hectares of land with an expected yield of 2 million metric tonnes of rice for the wet season alone. The additional indirect job creation component has generated employment of almost 1,500 Agric extension agents, excluding the positive impact on hundreds of aggregators, distributors and retailers in the Agribusiness value-chain business.


ü  The fourth initiative involved the commencement of Agency Banking, which the Bank launched in Gumel (Jigawa state) and Rijiya-Lemu (Kano state). The North-West was prioritized in order to tap into the huge unbanked population in the region, with key features including the provision of instant account opening as well as basic transactions services to people in peri-urban areas.


Lately, Unity Bank has been at the forefront of the Shared Agent Network Expansion Project (SANEP), collaborating with NIBSS to extend BVN registration and agency banking services to locations in Bauchi, Gombe, Borno, Adamawa and Yobe states. In addition to deepening financial inclusion, the agency banking drive also contributes to the CBN’s financial exclusion goal.


Cost containment: The new management has already began to take bold and specific steps that eliminate wastage, and significantly improve efficiency. The key areas of succinct attention for the Bank include:

  • Improvement and automation of key processes
  • Optimization of branch and other channel network
  • Invigorating our technological platforms to improve service quality, enhance customer analytics, and adapt rapidly towards changing market dynamics:


Service Quality and Customer centricity – Unity Bank is now poised to focus on excellent service delivery, as the new management has identified, and are already taking key steps in:

  • Investing in staff training
  • Implementing consequent management
  • Radical improvement and automation of processes


Prudence and enhances Risk Management practices: Considering the sale of NPLs and the eventual de-risking of the financial position of the Bank, the management and the board have developed sound governance structure, practices and policies around its Enterprise Risk Management Framework in order to tame credit loss, prevent the elevation of NPLs and maintain a strong credit portfolio for the Bank.


Enhanced workplace environment: – The new management has committed itself in strong terms to promoting a great-place-to-work environment through

  • Continuous staff development,
  • Employee engagement,
  • Encouragement of work flexibility,
  • prioritizing employee welfare
  • Embracing of diversity
  • Involvement of employee in CSR initiatives


Current Year: pushing forward

Income Statement:

  • Return to profitability: as at Q3 2018, a PBT of N644mn has been recorded, recovering from the 2017 full year loss of N14.2Bn.
  • Cost optimization: achieving mileage on cost containment, with total comparative operating expenses reducing by over 17%.

Balance Sheet:

  • Growth in core balance sheet components
  • Growth in Loan portfolio: through strategic partnerships and leveraging on a core strength of the Bank regarding Agricultural financing, the Bank grew the loan portfolio significantly in the period. Gross Loans have grown from N9.47bn as at December 2017 to N40.3bn as at September 2018.
  • Deposit Growth: Customer deposits have grown, further evidencing the fruits of the Bank’s strategy. In this vein, customer deposits have grown from N252.3bn to N277.48bn.


Key ratios are also on the up, including

  • Gross profit margin showing a positive of 2%, compared to negative recorded in 2017;
  • Liquidity ratio remain strong at 34%, above the regulatory minimum
  • NPL ratio has been further maintained at 0%, amongst other key indices.


 Proshare Nigeria Pvt. Ltd.

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