Unity Bank bucks banking trend, reports ₦38bn in losses for H1 2023

Unlike its banking peers, Unity Bank’s profits declined by N38 billion in H1 2023. 

Unity Bank recorded losses of  ₦38.8 billion during the first half of 2023, down from a profit of ₦1.6 billion in H1 2022.  A large part of those losses— ₦35.4 billion–were due to foreign exchange revaluation, according to its H1 2023 financials. 

Unity Bank’s financial performance contrasts its counterparts, Guaranty Trust Holding Company (GTCO), First Bank, Fidelity Bank and Stanbic IBTC, whose profits doubled in the same period.  “We have a high foreign currency exposure. While other banks have foreign assets,  we have foreign loans that would now require more naira to pay back given the Naira devaluation,” a source at the bank told TechCabal. 

CEO of Unity Bank Plc, Mrs. Tomi Somefun, blamed the bank’s poor financial position on the operating environment, which impacted the bank’s growth. “What we have is a market-driven impact which is adjustable envisaged from the positive economic outcomes of the government policies in the near term,” Somefun said in a statement the bank shared with TechCabal via email. Unity Bank’s financial position has been precarious since analysts from KPMG queried its full-year ended December 31, 2022.

The lender’s  total liabilities exceeded its total assets by ₦274.9 billion last year, and  KPMG wrote a note regarding this situation in its books, highlighting it as a “growing concern.” While the bank managed to record ₦1.04 billion profit in the first quarter of 2023, its total liabilities continued to surpass its total assets in Q1 2023, sustaining the questions over its financial health. 

Plans to reach profitability

Somefun said the bank plans to complete its recapitalization.  Presently, the lender has shifted its focus to retail growth as it eyes profitability in the near term. The bank hopes to achieve that by expanding strategic partnerships and growing commercial banking business to develop new and sustainable income lines. For 2023, Unity Bank is projecting ₦135 million in profit and gross earnings of ₦20 billion.

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