Unity Bank Repositions to Grow Profits

Unity Bank Plc said it is now positioned to increase lending activities and grow profitability.

Its audited result and accounts for financial year ended December 31, 2019, of the lender showed despite the low yield environment during the period, it was able to improve on its total operating income and reduced operating expenses to boost profitability.

After 2017 balance sheet clean up, the bank reported improved balance sheet growth with increases in lending to customers and improved deposits.

Ebenezer Kolawole, Executive Director, Finance & Operations at Unity Bank, at a virtual media briefing recently expressed that the significant increase in total assets in the last three years is great achievement for the management and staff of the bank.

According to him, “The growth of about 40 per cent in total asset is a great achievement and we also need to look at the bank’s assets base in the last three years.

“In 2017, we closed with total assets of N134 billion. In 2018, it grew to N210 billion and in 2019, we reported N293 billion total assets.”

For the first time in the past five years, the bank declared gross earnings of N44.59 billion and N293 billion total assets, thereby consolidating on the gains on the reforms instituted by the Bank to grow a healthy balance sheet for the past two years. The bank has improved on its lending to the real sector with over N100 billion granted as loans and advances to customers in 2019. The solid financial performance for the period ended December 31, 2019, affirms Unity Bank as one of the leading banks in terms of resilience and a transformed bank amid a challenging business environment in Nigeria.

The 2019 results revealed a number of positive performances as the management continued to reposition its stands on value creation for shareholders and improved on lending to the real sector to support the federal government’s drive to revive the nation’s economy.

Reduction in OPEX, Increase in Total Operating Income Drive Profits Unity Bank for the period under review reported 28.7 per cent increase in gross earnings to N44.59 billion in 2019 from N34.65 billion reported in 2018.

The bank interest income also increased by 21.8 per cent to N35.95 billion in 2019 from N29.5 billion in 2018, over increasing interest generated from loans and advances to customers that moved from N17.64 billion in 2018 to N21.89 billion reported in 2019.

Also. interest generated from placement from other banks moved from N361 million in 2018 to N632 million reported in 2019. More so, interest expense grew by 25 per cent to N19.45 billion in 2019 from N15.5 billion reported in 2018, even as attributed higher bank charges closed 2019 at N10.12billion in 2019 as against N7.7 billion reported in 2018.

Continuing the trend during the year, Net interest Income was stronger in 2019, gaining 18.1 per cent to N16.49 billion in 2019 from N13.97 billion in 2018. In terms of fees generated from banking operations, the lender reported N4.98 billion net fee and commission income in 2019 from N2.3 billion reported in 2018, an increase of 11.3 per cent.

The Bank improved on its Electronic transactions amid gaining more customers and rolling out more ATMs and POS at strategic locations across the country.

Kolawole explained that “in agriculture, we have over 1.5 million farmers in our primary production that banked with us and the number continued to grow as we speak.”

For the year under review, Unity Bank reported a 31.5 per cent increase in total operating income to N25.13 billion in 2019 from N19.11 billion reported in 2018. On the cost side, total Operating Expenses (Opex) dropped by 5.5 per cent to N19.6 billion, as against N20.7 billion in 2018, which is below average inflation rate within the period, a reflection of cost-efficiency gains.

The Bank had embarked on several cost minimization initiatives that have continued to yield positive results as personal expenses dropped to N9.43 billion in 2019 from N9.98 billion reported in 2018 while other operating expenses moved to N8.37 billion in 2019 from N9.35 billion in 2018.

Kolawole speaking on cost said, “We have tried to reduce our cost because that is within our control. We have tried to make sure we do not have any waste at all. We make sure where our money is going to, money is coming back to the bank.

“This has contributed to improved cost to income ratio of Unity bank and it has helped us showcase our impressive 2019 financial year performance.”

Notwithstanding the challenging business environment in Nigeria, the Bank’s Profit Before Tax was impressive at N3.64 billion, compared to a loss of N7.55 billion reported in the 2018 financial year. Furthermore, the Profit After Tax closed positive in 2019, reporting N3.38 billion in 2019 compared to a loss of N7.7 billion reported in 2018.