Published reports show that Unity Bank has posted a huge ₦62.6 billion loss in the financial year 2023, reflecting a stark reversal from a profit of ₦941 million in 2022. The audited 2023 financial statements of the bank indicate one of the difficult fiscal periods for the lender following the merger with Providus Bank in August 2024; an intervention largely regarded as a lifeline for the troubled Unity Bank.
Regulatory approval delays for previous financial statements, complicated procedures arising from its merger with Providus Bank, and extensive documentation requirements over financial accommodation with the CBN kept Unity Bank from publishing its financial report for 2023 until 2025.
The bank’s gross earnings in 2023 gradually went up to ₦59.36 billion as against ₦57.15 billion in 2022. But these gains dissipated on the back of rising operational costs and huge impairment charges associated with non-performing loans, causing a loss per share of 535.85 kobo.
The balance sheet lays before us a gloomy picture with total liabilities at ₦845.6 billion and total assets at ₦518.7 billion. Total liabilities exceeded total assets by ₦326.9 billion to give a CAR in negative percent at 76.14. This figure is way below the CBN stipulated minimum CAR of 10% for national banks.
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There were doubts about the going concern status of Unity Bank, albeit the report itself raised it. The inability to meet regulatory capital requirements coupled with negativity in equity was said to significantly jeopardize Unity Bank’s ability to continue as a going concern without major recapitalization. Ever since KPMG analysts raised concerns over its 2022 financial statements, Unity Bank’s financial position has been mortally endangered.
The bank, according to the figures highlighted on their website, implies that new capital will be required to meet the CBN ₦200 billion recapitalization threshold for a national bank. Unity Bank, in line with this, said, “We are exploring all possible options,” including injecting more capital through private placement rights issue, public offers, subscriptions, mergers, and acquisitions for all intents and purposes before the 2026 deadline.
Unity Bank has disclosed the financial support it received from the CBN. The short-term financial accommodation of up to ₦50 billion is to enhance its working capital requirements. It comes with the maturity date of December 31, 2024. CBN in July 2024 gave another financial accommodation of ₦700 billion as part of the merger with Providus Bank.
According to analysts, survival for Unity Bank rides majorly on heavy capital inflows and restructuring its loan book. The major asset holder in Unity Bank is the Asset Management Corporation of Nigeria (AMCON), which has a stake of 34.22% and might play a key role in any recapitalization. Still, observers in the market caution that investor confidence might remain low until the bank shows significant achievement in addressing its capital deficit.
