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Banking Sector

Unity Bank Grows Profit After Tax by 23% to N1.6 Billion

Retail lender, Unity Bank Plc has posted gross earnings of N27.6 billion for its 2022 half-year results, representing a growth of 17% year-on-year.

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Unity bank - Investors King

Retail lender, Unity Bank Plc has posted gross earnings of N27.6 billion for its 2022 half-year results, representing a growth of 17% year-on-year.

In its unaudited half-year financials submitted to the Nigeria Exchange Group Limited, the Bank also made significant improvements across key performance indicators.

The Bank grew Profit Before Tax (PBT) by 23% which rose to N1.8 billion from N1.5 billion in the corresponding period of 2021. Profit After Tax (PAT) for the period equally increased by 23% to close at N1.6 billion from N1.382 billion in H1’21.

The key highlights of the financial statements showed growth in interest and similar income, which rose 18% to N23.938 billion from N20.273 billion in the corresponding period of 2021, an indication of sustained growth in the loan book as well as improved earnings from the lender’s robust digital channels, arising from sustained investment in its digital payment infrastructure.

Similarly, the lender posted sustained asset growth as total assets moved up by 7% to N574.3 billion from N538.9 billion in 2021.

Other key highlights of the financial statement include a 12% growth in deposits, which rose to N359.5 billion from N322.3 billion in December 2021, a clear indication of the positive trend of the Bank’s innovative retail products targeting several segments of the retail market as well as enhanced customer acquisition strategies for emerging products rolled out to the market during the period under review.

In the same vain, the lender recorded an increase on its loan books to N303.632 billion from N269.270 billion in 2021, representing a 13% growth.

Commenting on the financial statements, the Managing Director/CEO of Unity Bank Plc, Mrs Tomi Somefun welcomed the H1’22 results. She noted that while the key performance indicators continue on an upward trajectory; PBT (23% YoY), Total Assets (7% YoY) and gross earnings (17% YoY); the outlook for our financial position has now moderated significantly looking at other fees and income lines which performance was hitherto characterised by volatilities in the operating environment.

“As the Bank aims to further grow all indices to double-digit regions in the coming years, one reassuring take from the financial position lies in the market confidence, as well as steadily growing retail and SME franchise arising from the development of products that resonate with different markets segments, which will enable the Bank to continue to operate and successfully navigate the tough operating environment, amid rising economic headwinds,” Mrs Somefun stated.

The Unity Bank boss also stated that having invested massively in technology to drive a major revamp in our digital Banking products and channels including the Unifi Mobile App, our USSD, *7799#, internet banking, etc., the major focus is to drive increased optimisation which will enable the Bank to provide electronic convenience in the way we support our teaming customers and market segments and more often change the way they transact business.

In the view of analysts, the key performance indicators showed that the market sentiments are responding positively to the strategies of the lender’s management to accelerate the growth momentum designed for the Bank.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Banking Sector

Central Bank of Nigeria Postpones 293rd Monetary Policy Committee Meeting

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Central Bank of Nigeria - Investors King

The Central Bank of Nigeria (CBN) has announced the postponement of its 293rd Monetary Policy Committee (MPC) meeting, originally scheduled for September 25th and 26th, 2023.

Dr. Isa AbdulMumin, the bank’s Director of Corporate Communications, released a statement on Thursday confirming the decision.

In the statement, Dr. AbdulMumin stated, “The Monetary Policy Committee of the Central Bank of Nigeria has deferred its 293rd meeting, which was initially planned for Monday and Tuesday, September 25th and 26th, 2023, respectively. A new date will be communicated in due course. We regret any inconvenience this change may cause our stakeholders and the general public.”

While the CBN did not provide an official reason for the postponement, some industry experts suggest it may be related to the pending approvals for the newly appointed governor and deputy governors of the bank.

President Bola Tinubu recently nominated Yemi Cardoso as the potential head of the CBN. Additionally, Tinubu has endorsed the nominations of four new deputy governors for the apex bank, who are expected to serve for an initial term of five years, pending confirmation by the Senate.

The nominated deputy governors are Emem Usoro, Muhammad Abdullahi-Dattijo, Philip Ikeazor, and Bala Bello. However, the appointment of the CBN governor is contingent upon Senate confirmation, which is currently on a yearly recess.

The CBN assures stakeholders and the public that the rescheduled MPC meeting date will be communicated promptly as soon as it is confirmed.

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Banking Sector

Currency in Circulation Surges by N1.7 Trillion Amidst Rising Cash Transactions

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New Naira Notes

The currency in circulation in Nigeria has surged by N1.7 trillion, driven by a surge in cash transactions.

According to data obtained from the Central Bank of Nigeria (CBN), as of the end of August, the currency in circulation rose to N2.7 trillion.

This substantial increase in currency in circulation comes after a 235.03 percent dip to N982.1 billion as of the end of February 2023 from N3.29 trillion at the close of October 2022, primarily due to the naira redesign policy spearheaded by the CBN.

However, the currency in circulation began its steady ascent once the policy concluded. Cash that had been previously withdrawn from circulation to promote electronic payments was reintroduced into the economy, contributing to this significant boost.

The data obtained from the CBN reveals that a whopping N2.3 trillion was removed from circulation during this period.

The CBN defines currency in circulation as all legal tender currency in the hands of the general public and within the vaults of Deposit Money Banks, excluding the central bank’s vaults.

The CBN further elucidated its methodology, stating that it employed an “accounting/statistical/withdrawals & deposits approach” to calculate the currency in circulation in Nigeria. This approach meticulously tracks the movement of currency in circulation on a transaction-by-transaction basis.

Under this methodology, each withdrawal made by a Deposit Money Bank at one of CBN’s branches results in an increase in currency in circulation (CIC), while each deposit made by a DMB at one of CBN’s branches leads to a decrease in CIC.

This surge in currency in circulation reflects the evolving landscape of financial transactions in Nigeria and underscores the importance of flexible monetary policies in facilitating economic growth and stability.

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Banking Sector

Strong Growth in Earnings for Leading Nigerian Banks in H1 2023

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Retail banking

Financial reports released by eight Deposit Money Banks (DMBs) for the first half of 2023 have showcased robust financial performances, collectively amassing N3.9 trillion in gross earnings.

These figures were recently disclosed through the financial statements published on the Nigerian Exchange Limited’s website.

Zenith Bank: Zenith Bank, in its audited results for the half-year ending on June 30, 2023, stood out with remarkable growth, posting a 139 percent surge in gross earnings. This figure soared from N404.8 billion in H1 2022 to N967.3 billion in H1 2023.

The bank also reported a 161.84 percent increase in profit after tax, reaching N291.7 billion by June 2023.

Guaranty Trust Bank (GTCO): GTCO recorded a substantial 85 percent rise in gross earnings during H1 2023, soaring to N672.603 billion from the N364.306 billion recorded in the previous year.

In its audited consolidated and separate financial statements filed with both the Nigerian Exchange Group and London Stock Exchange, the bank reported a profit after tax of N280.482 billion for H1 2023, compared to N77.557 billion in the corresponding period of 2022.

United Bank for Africa (UBA): UBA demonstrated its financial prowess with a remarkable 164 percent increase in gross earnings, reaching N981.78 billion in June 2023, compared to N372.36 billion in June 2022.

According to the bank’s audited financial report, its profit after tax surged to N378.24 billion, reflecting a staggering 437.8 percent increase over H1 2022.

First Bank: Nigeria’s oldest bank, First Bank, experienced substantial growth in gross earnings, witnessing an 82.8 percent increase to N656.6 billion in H1 2023, compared to N359.2 billion in the same period of 2022.

The bank’s profit after tax also saw significant growth, increasing to N174.9 billion in H1 2023 from N53.3 billion in the previous year.

Also, other prominent banks that recorded substantial growth in gross earnings in the first half of 2023 included Wema Bank (N89.09 billion), Fidelity Bank (N247.1 billion), Sterling Holding (N99.06 billion), and FCMB (N238.2 billion). Cumulatively, these eight banks collectively amassed N3.9 trillion in the first six months of the year.

A deeper analysis of these banks’ financial statements indicated that the impressive performance in the first half of the year was primarily attributable to the devaluation of the naira following the Central Bank of Nigeria’s decision to float the local currency.

For instance, Zenith Bank’s interest income surged by 72 percent, reaching N415.4 billion in H1 2023 from N241.7 billion in H1 2022. Additionally, trading gains rose by 21 percent to N103 billion during this period.

The growth in interest income was attributed to the impact of both the expansion and repricing of risk assets.

“The liberalization of the foreign exchange market during the period spurred the growth in non-interest income as revaluation gains improved significantly,” noted the bank.

These impressive financial performances underscore the resilience and adaptability of Nigerian banks in the face of economic challenges and changing market conditions, positioning them as key players in the nation’s financial landscape.

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