Unity Bank’sWith a slight growth of 2 per cent in gross income, the last nine months financial period ending September 30 2015 was a challenging one for Unity Bank Plc as its continued ability to boost efficiency, cut cost among others are put to test.

Specifically, with 2 per cent growth of gross income from N48.1 billion in the first three quarters of 2014 to N49.2 billion in 2015 profit after tax crashed by 16 per cent to N9.3 billion from 11.1 billion in 2014.

The group’s pre-tax profit also depreciated by 14 per cent to N10.35 billion from N12.2 billion while earnings per share for the period fell by 31 per cent to 19.92 kobo from 28.76 kobo posted in 2014.

Customer deposits similarly declined 12 per cent to N248.8 billion from N281.5 billion when total asset grew 8 per cent from N407.8 billion to N440.1 billion but total liabilities increased by one per cent to N354.0 billion from N350.4 billion.

On the analysis of its productivity, Unity Banks’ assets witnessed a slight decline from 2.71 per cent achieved in the first nine months of 2015 to 2.1 per cent in the corresponding period of 2015.

As stockholders’ investments witnessed a downturn with the bank’s return on equity dropping to 11 per cent from 19 per cent previously attained, net profit margin for the bank decreased from 23 per cent reached in the first nine months of 2014 to 19 per cent achieved in the same period of 2015.

The bank witnessed reduction in efficiency in operations as its Cost to Income Ratio increased to 65 per cent from 60 per cent recorded in 2014.

When loan to deposit ratio rose to 97 per cent from 76 per cent in the corresponding period of 2014, it could imply that the bank’ liquidity might not readily cover any unforeseen fund requirements.

Moreover, Unity Bank remained vulnerable to liquidity risks as its liquidity ratio dropped to 32 per cent which is too close to comfort with the CBN minimum requirement fixed at 30 per cent.

The bank is listed on the banking sector of Nigerian Stock Exchange with market capitalisation of N14.027 billion and shares outstanding of 11.689 billon.

Its share price appreciated by 4 kobo or 3.45 per cent to N1.20 on November 16th 2015 from a depreciation of 8 kobo on November 13th 2015.

By Pita Ochai

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