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Unity Bank’s Cost-Cutting Leads to Growth in Profit

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Nigerian lender Unity Bank Plc, says it earned N44.59 billion in the 2019 financial year. Unity Bank also announced a Profit-Before Tax of N550 million for the first quarter of 2020.

The bank’s first quarter results, released along with its 2019 financial statements, show that the bank recorded a nine per cent growth in its profit after tax, which climbed from N464.87 in 2019 to N506.07 in the current year.

The audited 2019 full year result showed that the Bank recorded a Profit Before Tax (PBT) of N3.64 billion, while Profit After Tax (PAT) closed at N3.38 billion, thereby consolidating on the gains on the reforms instituted by the Bank to grow a healthy balance sheet over the past two years.

Unity Bank’s Net Operating Income for the year ended December 2019 which rose by 76.39% to N23.211 billion from N13.159 billion in the corresponding period of 2018.

Net Interest Income rose 18.06% to N16.493 billion from N13.970 billion in 2019 while total assets witnessed a 71.93% increase to close at N293.052 billion from N210.80 billion in the corresponding period of 2018.

Unity Bank also declared a total comprehensive income of N5.52 billion while Earnings Per Share stood at 28.94 Kobo. The bank says that its loan book grew by 135.87% to N104.02 billion in 2019.

Analysts say that while Unity Bank remains one of Nigeria’s smallest banks in terms of market capitalisation and branch network, its cost-cutting plans might be yielding some results. The bank slashed its operating expenses to 19.57 billion in 2019 after peaking at 20.71 billion in 2018.

Commenting on the results, Unity Bank’s chief executive Tomi Somefun said: “The potential in many aspects of the business as reflected in growing balance sheet of the Bank is indicative of market confidence in our repositioning efforts.

“It is also noteworthy that playing in the Agriculture sector as part of growth strategy and as bulwarks to drive value chain businesses in many segments of the retail market has continued to pay off. Looking ahead, we shall consolidate on the gains in the agribusiness, capitalizing on the growing profile in the sector, whilst also focusing on the youth market with increased investment in technology.

“The quest to deepen our retail play will go hand in hand with our focus on digital innovations. Already, we have deployed USSD banking, carried out augmentation of the platform to introduce local languages and further drive financial inclusion and had also launched omni-channel to cater for all segments of the banking public, especially the underbanked. In the coming years, the Bank will be opening more channels and bundled products bouquet for identified cluster initiatives and also leverage and expand relationships with other partners to drive more growth in earnings and profits.”

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