Nigeria’s Unity Bank posts impressive results in H1 2020 despite of COVID-19

NIGERIA – Unity Bank Plc, one of the major commercial banks in Nigeria, has posted an impressive financial performance in the first half of 2020 despite of the harsh economic environment occasioned by the COVID-19 pandemic.

Unity Bank said its gross earnings grew by 11 per cent to N22.8bn (US$58.80 million) in the first half of this year from N20.55bn (US$53.00 million) in the same period of 2019.

Unity Bank however recorded a -14.60% decline in its shareholders fund, continuing a stream of declines over the past five years.

The bank’s profit before tax grew by seven per cent from to N1.12bn (US$2.89 million) in the period under review from N1.05bn (US$2.71 million) in H1 2019.

Its profit after tax also rose by seven per cent to N1.03bn (US$2.66 million) from N967.51m (US$ 2.49 million).

The skip in Unity Bank’s profit rode on the back of a major rise in the bank’s fee-based earnings for 2020 which rose +67.99% higher than in H1 2019

Union Bank’s interest earnings grew by 15 per cent to N19.79bn (US$51.04 million) within the period, from N17.27bn (US$44.54 million) achieved in the corresponding period in 2019.

Total operating income for the Bank on the other hand, grew by 14 per cent to N12.14bn (US$31.31 million) from N10.69bn (US$ 27.57 million).

“Despite the inclement economic conditions occasioned by the global pandemic, the bank has been able to ride the waves to maintain its growth trajectory looking at the key performance indicators,” Managing Director/Chief Executive Officer, Unity Bank Plc, Mrs Tomi Somefun, said.

“The assessment, therefore, is that the repositioning efforts which have taken root before the headwinds are equally able to withstand shocks.”

Somefun further noted that the bank was successful because it paid more attention to its niche market while growing its brand franchise in many areas of the retail market.

Unity banks steady growth in top line numbers has been well-noted by analysts but concerns still remain about its negative shareholder funds.

As things stand the banks return on equity is negative as the denominator of the return ratio is negative. Best practice denominator management would require that the bank quickly recapitalizes to stabilize its operations.

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