The Central Bank of Nigeria (CBN) has denied planning to nationalise Unity Bank Plc, saying that the bank is still in good financial health.
The Acting Director, Corporate Communications Department, CBN, Osita Nwanisobi, said the information was “fake news” and should be discarded in its entirety.
A news 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.
Last month, the CBN’s Monetary Policy Committee ( MPC) at the end of its meeting noted 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.”
The Chairman of the Progressive Shareholders Association of Nigeria (an umbrella body of shareholders), Boniface Okezie, said Unity Bank is still in good health.
He said, “I don’t think Unity Bank has a problem that it cannot surmount. Because if that bank would have been crippled, it would have happened years back. But that is not the situation now. As far as I am concerned, Unity Bank is still a going concern. It is still viable and it still has strength to forge ahead.”
On his part, National Coordinator Emeritus, Independent Shareholders Association of Nigeria (ISAN), Sunny Nwosu, said that Unity Bank has been able to turn its fortunes around said, “This kind of rumour can create fear among depositors. Those who feel strongly that government control of such banks will not be good for corporate governance and the bank is owned by so many people and government should not try to do that because it will actually not place them in the good books of shareholders.
“Already the bank is being turned around and they have produced profit which is okay for shareholders so I don’t see any reason for such. I don’t think the bank has any problem because they turned over a profit in the last financial report.”
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.
Unity Bank’s full year 2020 results showed improved performance as its gross loans portfolio increased by 92.9 per cent to N206.2 billion in 2020 from N106.9 billion in 2019, while total assets rose by 67.90 per cent when compared with N293.05 billion achieved in the comparative period of 2019.
Its 2020 full year gross earning had declined slightly to N42.71 billion compared with N44.59 billion recorded in the comparative period of 2019, reflecting the impact of the Covid-19 pandemic on the economy. This, however, did not reflect on its net operating income which rose to N25.46 billion from N23.21 billion in the corresponding period of 2019, representing a 9.71 per cent increase.
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.