How Unity Bank’s FX revaluation loss Weakened H1 2023 by to N34.42bn

Unity Bank Plc. has reported heightened foreign exchange revaluation loss by 218162 per cent to N34.42 billion from N16.226 billion recorded in the corresponding period of 2022 H1 accounting period ended 30 June 2023.

However, FX Trading Income rose BY 17 per cent to N239, 763 from N204.415 posted in H1 2022. The bank’s net loans portfolio reduced significantly by 31% to N198.6 Billion as at 30 June 2023 from N289.4 Billion as at 31st December 2022, while it’s Non Performing Loan (NPL) Ratio remained moderate at below 3% while liquidity ratio stood strong at over 45%.

The result published by the NGX Exchange on September 09,2023 showed that the retail lender, grew its deposits to N333.38 billion, representing a marginal increase of 2% compared to N327.42 billion recorded in H1’22 in its Half-Year unaudited financial statement delivered to the NGX Exchange.

The report showed that Gross Income closed flat at N27,754,833 billion from N27,624,895 billion posted in H1 2022, as interests and Similar income dropped by 1 per cent to N23,617,020 from N23,937,597 recorded in the preceding period of 2022.

The Unity Bank H1 2023 unaudited report shows that Net interest income dropped to N7,890,484 from N10,290,540 posted in same period of 2022, reflecting dip by -23 per cent, while Fee & commission income rose by 10 per cent to N3,524,927 from N3,200,895 billion recorded in the prior 2022 period, also, Net fee & commission income rose by same margin of 10 per cent to N3,524,927 billion from N3,200,895 billion in H1 2022.

Other operating income penned by Unity Bank in H1 2023 rose by 32 per cent to N373,124 from N281,988 in H1 2022, Total operating income closed H1 2023 at N23,387,278 against N 13,961,612 in H1 2022, Credit loss expense closed at N27,579 from N1,125,352 in 2022, while Net operating income rose to N23,359,700 against N 15,086,964 posted in 2022 HI accounting period.

The unaudited Unity Ban’s financial statement further showed that Personnel expenses rose by 28 per cent to N6, 837,424 against N5, 346,690 in the same period of 2022. Depreciation of property & equipment closed the period 35 per cent higher to N1,477,129 form N1,098,112 in 2022 H1, Amortization of intangible assets increased by 567 per cent to N182,280 from N27,309 in same period of 2022, Other operating expenses rose marginally by 1 per cent to N6,849,283 billion from N6,768,971 billion in 2022, while Total operating expenses closed higher by 16 per cent to N15,346,117 billion from N13,241,082 billion in 2022.

(Loss)/Profit before tax closed higher by 2197 per cent to N38,705,816 billion, which was against N1,845,882 billion posted in the same period of 2022. During the period tax commitment by the Bank increased by 8 per cent to N159, 484 million, against N147, 671 million paid in H1 2022, while (Loss)/Profit for the period heightened by -2389 per cent to N38,865,300 billion, from N1,698,212 billion recorded in H1 2022 accounting period.

Similarly, fees and income commission also witnessed a 10% growth to N3.5 billion from N3.2 billion compared to the corresponding period of 2022, on the strength of the growing popularity of its digital banking platforms and customers’ acquisition in the retail space.

It was gathered that the Managing Director/CEO of Unity Bank Plc, Mrs. Tomi Somefun, commenting on the financial statements, noted that the significant disruptions which characterized the operating environment has impacted the positions of the Bank to the extent that we have constraints in income generation on the back of revaluation of the bank’s net foreign liabilities occasioned by the Naira devaluation during the period.

Mrs. Tomi stated: “In the light of the prevailing FX revaluation in the financial system, 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. Be that as it may, the negative shareholders’ fund has improved considerably through the injection of N135 Million which moderated the negative shareholders’ fund from (-ve) N275 Million in December 2022 financial year-end to (-ve) N178 Billion as at the end of June 2023, after absorbing the FX revaluation loss suffered in Q2/2023. We are however, focused with clear-cut plans to close out on our recapitalization programme very soon to enable us do business as expected in the fast-growing markets in Nigeria”
She further stated that while we remain optimistic that the government’s policy initiatives will lead to cause correction in the market, the Bank has accelerated measures to ramp up asset creation and liability generation in the short and medium term.

The Bank is aggressively driving its retail growth in every segment of the market, expanding strategic partnerships; and growing commercial banking business to develop new and sustainable income lines for the Bank as well as pay sufficient attention to fast-paced process automation, cost and resource efficiency, targeted value chain relationships, and product marketing to enhance value creation in the market.

Meanwhile, Analysts are of the view that notwithstanding the market shocks currently being experienced, the Bank is still on course given the resilience it has demonstrated over time.

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