Unity Bank Posts N2.09 Billion Profit Despite N4 Billion Revaluation Loss in 2020

Unity Bank Plc, one of Nigeria’s leading financial institutions, grew profit after tax to N2.09 billion in the financial year ended December 31, 2020.

The lender profit before tax stood at N2.22 billion in the year under review while assets rose by astonishing 67.90 percent from N293.05 billion in 2019 to N492.02 billion in 2020.

In the audited financial statements released on Monday, Unity Bank grew its gross loan portfolio by 92.9 percent from N106.9 billion recorded in December 2019 to N206.2 billion in December 2020.

The almost 100 percent jumped in credit provision highlighted the bank’s strategy at deepening support for farmers, improving food security and enhancing new job creation for thousands of youths and entrepreneurs.

During the bank’s earnings call on Monday, Mr. Kolawole Ebenezer, the Executive Director and Chief Financial Officer, Unity Bank Plc, explained that the bank has been able to cut down on its Non-performing loan to near-zero percent by adopting a strategy that allows the lender to focus on farmers and at the same time implement strategy that mitigates security challenges.

Unity Bank grew its net operating income by 9.71 percent to N25.46 billion in 2020, up from N23.21 billion in the corresponding period of 2019. Similarly, net interest income rose by 7.60 percent to N17.75 billion in 2020 from N16.49 billion in 2019 while earnings per share stood at 17.85 kobo.

In spite of COVID-19 disruption, Unity Bank grew customers’ deposit portfolio by 38.4 percent to N356.62 billion, up from N257.69 billion filed in 2019. This indicates market acceptance of the bank’s product offerings and series of technological integration launched during the year under review to ease banking challenges, especially as the world struggles with the COVID-19 pandemic.

Bismarck J. Rewane, the Managing Director and Chief Executive Officer of Financial Derivatives Company Limited, who spoke during the earnings call on Monday, said Unity Bank is operating like a tier I bank despite its obvious limitations and highlighted the broad-based growth the bank has recorded in recent years.

The economic think tank further explained that if the bank’s N4 billion revaluation loss is added to profit after tax declared, the bank would have declared N6 billion. This does not include the adjustments made by the Central Bank of Nigeria to the interest rate charged on agric loans that eroded interest income on loans by over 30 percent.