UNITY BANK: WHEN SMALL IS BEAUTIFUL.

If there any time in Nigerian finance, it pays to be relatively small, the time is now and Unity Bank PLC is one of the banks that prove this in turbulent 2016.

For Unity Bank the knocks of different policy somersault  since 2015 has been taking its pound of flesh but being rather small comparatively, one good news was enough to keep hope alive.

So,  in the first half to June, gross earnings decreased significantly and many costs grudgingly followed from a distance but Unity Bank PLC still ended with profit, not loss.

Gross earnings for the period had dropped by 35.1% to N21775.8m as interest income dived by 42.3% to N13477.4m; and fee and commission slumped by 82.7% to N804.2m.

Stoking the fire some more was 32.7% drop in interest expense, well behind interest income decrease; 95.5% dive in paper income due to forex revaluation and less than proportionate decreases of 2.18% to N6942.2m and 24.4% to N5169.6m in personnel and other operating costs respectively.

This recipe for disaster did not quite deliver on its agenda because there 88.2% increase in other operating income to N6527.5m and 85.5% decrease in credit loss provision to N130.9m.

In the end, Unity Bank only suffered 70.2% drop in profit before tax to N2614.8m ending with 12% profit margin compared to 26.1% previously.

Now imagine what would have happened if Unity bank had had to provide for substantially more money to service foreign loans like most big Nigerian banks have to today.

That is, imagine if out of the N79112.6m it was owing the bulk was not due mainly to the CBN and Bank of Industry?

Imagine if 39.5% and 95.5% decrease in forex trading and revaluation gain respectively had succeeded in stopping net trading income from growing by 9.76% to N910.4m.

Surely, the loss league would have been inevitable. Now Unity Bank can take a deep breath and take measures to stabilise its boat in these trying times without panicking.

UNITY BANK: Nbn half year
                       2016.     2015
G. Earnings.   21.8.     33.7
Interest.         13.5.      23.4
   " expense     5.92.     8.80
Commission  0.80.     4.66
Net trading.    0.91.     0.83
FX revaluation 0.06.   1.24
Other income  6.53.   3.47
Credit loss      0.13.    0.90
Personnel       6.94.    7.10
Other expense5.17    6.84
Profit b4 tax   2.61.    8.77
Margin %       12.0.    26.1

Comments

Post a Comment

Popular posts from this blog

NAIROBI SE's HIGH PRICED EQUITIES.

In the wake of Nigeria's high priced quoted companies posted in this blog a while ago, Henates took a look to at Nairobi Securities Exchange June 23 official list to identify its high priced equities and the outcome was interesting too. Of the 66 companies quoted on the market by June 23, 15 or 22.7% were valued averagely at above 30 times nominal value. A word of caution though: There are two clear differences between the Nigerian stock market list and that of Nairobi: In the Nigerian one most listed companies have par or nominal value of N0.50 as is there is an implied agreement on this. On the other hand, at Nairobi most of the equities do not share common par value, they differ greatly. Then another thing, Nigerian equities are not valued below par, Nairobi ones can and many are so valued. Of the top 15 high priced equities at the Nairobi market, Safaricom topped with because by June 23, at 23.25 Ksh average price, it was valued 465 times its nominal value of just 0.0...
Read more

2018: TWO BLOWS TO UNITED CAPITAL PLC.

When a child who in a previous examination scored 80%, comes home with a new report in which he now scores 67.2%, the parents have a right to sit him down and ask how come. So it must be between Nigeria's United Capital Plc and its discerning shareholders since the release of the company's 2018 audited figures. In 2018, all said and done, says the annual report, United Capital ended with 67.2 % profit margin compared to 80.2% in 2017. How come? What comes across from the figures was that the company received 2 blows to the jugular in 2018: Sharp drops in Investment income and fair value gain. Investment income dropped by 10.8% to N4422.8m from N4965.2m while fair value on financial assets plunged by 79.7% to N6.173m from 2017's N30.387m. In view of both drops, the group's gross earnings grew by only 33.9% to N9259.4m despite strong growths in net trading income, and net operating income leap to N757.5m from N143.5m  Other income streams ended with single digit increase....
Read more

JAN 9, 2019: TREND CONTINUES AT GHANA STOCK EXCHANGE

On Wednesday, January 9 2019, the up one day, down next trend noticed at the Ghana Stock Exchange since this year continued with the Composite Index rising from 2581.46 to 2582.70. The trend had started with drop in GCI on first trading day January 2 and continued till Tuesday's marginal decline as only one equity recorded price change and downwards. The Wednesday rally was underpinned by 3 price gains and one drop. The leading gain was GHs 0.03 per share by Trust Bank ltd of Gambia as it also recorded top trade for the day. TBL's leading 119,200 shares were traded with last deal at GHs 0.26 per share compared to GHs 0.23 close on Tuesday. However, closing  bid was at GHs 0.20 per share thus hinting at possible further drop ahead although it will take a matching offer price to make this happen  The 2 other price gains were GHs 0.01 per share each. CAL Bank recorded deals for 8300 shares with the last deal and closing price at GHs 1 per share, compared to GHs 0.99 previously. Wh...
Read more