Unity Bank has reported a staggering loss of ₦62.6 billion for the financial year ended December 31, 2023, marking a sharp reversal from a profit of ₦941 million in 2022. The bank’s audited 2023 financial statements reveal a challenging fiscal period for the lender which merged with Providus Bank in August 2024—a move largely considered a lifeline for the struggling Unity Bank.
Unity Bank delayed releasing its 2023 financial report until 2025 due to regulatory approval delays for previous financial statements, complexities from its merger with Providus Bank, and extensive documentation requirements tied to financial accommodations from the CBN.
The bank’s gross earnings rose marginally to ₦59.36 billion in 2023 from ₦57.15 billion in 2022. However, these gains were wiped out by rising operational expenses and significant impairment charges linked to non-performing loans, resulting in a loss per share of 535.85 kobo.
The balance sheet paints a dire picture, with total liabilities amounting to ₦845.6 billion and total assets standing at ₦518.7 billion. The bank’s total liabilities surpassed total assets by ₦326.9 billion, resulting in a negative capital adequacy ratio (CAR) of 76.14%. This figure falls drastically short of the Central Bank of Nigeria’s (CBN) required minimum CAR of 10% for national banks.
In its auditor’s report, KPMG raised concerns about Unity Bank’s going concern status. The report noted that the bank’s inability to meet regulatory capital requirements and its negative equity position cast significant doubt on its ability to continue operations without substantial recapitalisation. Unity Bank’s financial position has been precarious since analysts from KPMG queried its 2022 financial statements
The bank would need to raise fresh capital meet the CBN’s ₦200 billion recapitalization threshold for national banks. Unity Bank said it is “exploring all options” including injection of capital through private placements, rights issues, public offers, subscriptions, mergers, and acquisitions ahead of the 2026 deadline.
Unity Bank disclosed receiving financial support from the CBN. The bank was granted a short-term financial accommodation of ₦50 billion to augment its working capital requirements. This facility comes with a maturity date of December 31, 2024. In July 2024, the CBN approved another financial accommodation for its merger with Providus Bank, amounting to ₦700 billion.
Analysts say Unity Bank’s survival hinges on securing substantial capital inflows and restructuring its loan portfolio. The Asset Management Corporation of Nigeria (AMCON), the bank’s largest shareholder with a 34.22% stake, may play a pivotal role in any recapitalisation efforts. However, market observers caution that investor confidence could remain low until the bank demonstrates concrete progress in addressing its capital shortfall.
