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CBN Debunks Report on Planned Nationalisation of Unity Bank

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Unity bank - Investors King

The Central Bank of Nigeria (CBN) has denied planning to nationalise Unity Bank Plc as alleged by an online news medium.

Reacting to the report, the Acting Director, Corporate Communications Department, CBN, Osita Nwanisobi, described it as, “fake news” and should be discarded in its entirety.

He said: “The report is fake news. There is no iota of truth in it.” He added that the public should disregard such news.

The report had claimed that the apex bank’s target examination of Unity Bank showed that the Tier 2 lender is in ”grave financial condition”, with Capital Adequacy Ratio (CAR) and Non- Performing Loans (NPL) ratio that breached prudential standards.

However, analysts note that just last month, the CBN’s Monetary Policy Committee ( MPC) noted in the communiqué it issued at the end of its meeting that the banking industry is in good health.

According to the communique: “the Capital Adequacy Ratio (CAR) and the Liquidity Ratio (LR) both remained above their prudential limits at 15.8 and 38.9 per cent, respectively. The Non-Performing Loans (NPLs) at 5.89 per cent in April 2021, showed progressive improvement compared with 6.6 per cent in April 2020.”

Unity Bank’s audited FY’ 2020 results showed improved performance in key parameters. For instance, the Bank’s gross loans portfolio increased by 92.9 per cent to N206.2 billion in 2020 from N106.9 billion in 2019.

The bank’s total assets rose by 67.90 per cent when compared with N293.05 billion achieved in the comparative period of 2019. Also, the lender posted gross earnings of N42.71 billion compared with N44.59 billion recorded in the comparative period of 2019, reflective of its business and economic realities of the time.

Its customer deposit portfolio grew by 34.4 per cent to N356.62 billion in 2020, up from N257.69 billion posted in the corresponding period of 2019. Profit after tax stood at N2.09 billion, while profit before tax was N2.22 billion during the year under review amidst the tough macroeconomic environment where it operated. Its net operating income rose to N25.46 billion from N23.21 billion in the corresponding period of 2019, representing a 9.71 per cent increase.

This is even as the net interest income recorded a significant jump, as it rose by 7.60 per cent to N17.75 billion from N16.49 billion in the corresponding period of 2019.

Furthermore, the bank sustained the growth momentum demonstrated in its 2020 full year earnings as it recorded an impressive performance of 43 per cent in both profit before and after tax in Q1 2021.

The Bank’s unaudited Q1 results show that the retail lender profit before tax (PBT) grew by 43 per cent to N784.3million from N550.1 million recorded in the corresponding period of 2020.

The profit after tax (PAT) for the period, which also grew by 43 per cent stood at N721.5million compared to the N506.1million recorded in Q1 2020.

As an outcome of increased focus on supporting local enterprises and industry, the asset portfolio also showed significant growth in loan book of 76 per cent as net loans and advances to customers increased to N223.2 billion, from N126.6 billion recorded in the corresponding period.

The total assets of the bank for the period showed an appreciable growth of 42 per cent to close at N521.5 billion, from N366.8 billion in the corresponding period of 2020.

The balance sheet of the bank had been considerably de-risked with the non-performing loan (NPL) ratio of near-zero per cent, which it has consistently maintained over time. With this, the bank ranks topmost in risk management assessment.

The bank recorded gross earnings of N11.5 billion, representing a marginal decline of three per cent when compared to N11.9billion posted in the corresponding period of 2020.

The bank has assuredly intensified its recapitalization efforts by the recent updates the lender provided to the supervisory authority and significant mileage is currently being recorded as part of its corporate transformation and renewal programmes.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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Banking Sector

Unity Bank Forecasts N380.815 Million Profit for Q3 2021

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Unity Bank Plc on Friday predicted profit after tax of N380.815 million for the third quarter (Q3) ending September 30, 2021.

This represents a decrease of N162.3 million year-on-year when compared to the N543.14 million recorded in the same quarter of 2020.

The lender projected gross earnings of N10.890 billion for the quarter while interest income was expected to hit N7.204 billion.

Interest expense was estimated at N5.351 billion for the period. Unity Bank puts net revenue from funds at N1.853 billion in Q3 2021.

Other incomes were expected at N3.686 billion and impairment for credit loss was projected at N885.663 million in the quarter under review.

The bank forecasts net operating income at N4.653 billion and puts operating expenses at N4.237 billion.

Profit before tax was projected to hit N416.191 million in the quarter, below the N590.4 million achieved in the same quarter of 2020.

Unity Bank’s Cashflow Projections for the Third Quarter Ending September 30, 2021 (₦)

Net cash provided by operating activities 1,720,815,055

Net cash flow provided by/(used) in investing activities (260,034,996,531)

Net cash flow from operating and investing activities (258,314,181,476)

Net cash used in financing activities 258,694,996,531

Net increase/(decrease) in cash and cash equivalents 380,815,055

Cash and cash equivalents, beginning of period 107,494,314,017

Cash and cash equivalents, end of period 107,875,129,072

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Banking Sector

Union Bank Save & Win Palli Promo Rewards Customers With 55M in Cash and Gift

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Union Bank Save and Win Palli Promo-Investors King

Union Bank has said it will reward new and existing customers with N55 million in cash and gift in the ‘Save & Win Palli’ promo.

In a statement on Thursday, it said the campaign was introduced to provide relief to its customers as Nigeria continued to grapple with the economic hardship induced by the COVID-19 pandemic and other national issues.

“The Save & Win Palli Promo is another way we are offering Nigerians some relief (a.k.a. ‘palliative’) from the economic hardship brought on by the COVID-19 pandemic and other issues.”

During the promo period which runs from June to December 2021, it stated that new and existing customers who saved a minimum amount of N10,000 monthly would qualify to win cash rewards and other prizes.

“A total of 350 customers will win N100,000 each in the monthly draws, while six customers will be rewarded with N1m each during the quarterly draws,” he said.

According to the statement, the grand finale would take place in December, with one customer winning the grand prize of N5,000,000.

An additional 300 customers would receive other gifts, bringing the total number of winners in the promo to 657, the statement said.

The Head of Retail Banking and Digital, Lola Cardoso, while kicking off the campaign, reiterated the bank’s consistent efforts to give back to customers.

She said, “Union Bank is excited to give back to our customers through the Save & Win Palli promo, which is one of the many ways we are offering support to Nigerians at this time.

“This promo presents a wonderful opportunity to reward our customers in ways that matter and foster the savings culture among Nigerians.

“Union Bank will continue to deliver products and services that enable our customers to achieve their personal and business goals.”

Union Bank customers could top up their savings with multiples of N10,000 to increase their chances of winning in the draws, she stated.

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Banking Sector

Bankers Support CBN Digital Currency, Says Launching To Begin End of The Year

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CBN-headquarters-Investors King

The Director-Information Technology Department, Central Bank of Nigeria, Mrs. Rakiyat Mohammed, has said that the banking regulator will launch a digital currency before the end of 2021.

Muhammed disclosed this during a press briefing on the Bankers’ Committee meeting on Thursday.

“As I said before the end of the year, the Central Bank will be making a special announcement and possibly launching a pilot scheme in order to be able to be able to provide this kind of currency to its populace,” she said.

She said about 80 percent of central banks in the world we’re exploring the possibility of issuing central bank digital currency and Nigeria could not be left behind.

For over two years now, she added, the CBN had been exploring technology and had made tremendous progress.

Explaining what the Central Bank’s digital currency would be, she said there were currently two forms of money in the country.

She added, “We have in two forms in Nigeria as of now, there are the notes and there are the coins.

“So the Central Bank currency is to be the third form of money which means just as we have electronic money, digital money is not new in Nigeria.

“Just as we are about the third or fifth in the whole world as far as advancement in the use of digital money is concerned.

“So this is going to compliment the coins and cash that we have.

“The Central Bank digital currency will just be as good as you having cash in your pocket and even as you have the cash in your pocket, you are going to have the cash on your phone.”

She said the Central Bank was looking at different use cases such as remittances.

The director said, “We all know how money has to travel for someone to send money from Nigeria to abroad and it is huge money in Africa.

“We also know that recent report by EfiNA was that our target was to achieve 80 percent financial inclusion. We are about 60 percent and at the rate at which we are going, we are not going to meet this target.

“Central Bank digital currency will accelerate our ability to meet this target.”

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