Unity Bank Plc has announced a significant financial downturn, reporting a loss of ₦62.6 billion for the fiscal year 2023. This marks a sharp contrast to the ₦941 million profit recorded in 2022. The substantial loss is primarily attributed to foreign exchange revaluation, which accounted for ₦35.4 billion in the first half of 2023 alone.
In an effort to stabilize its financial standing, Unity Bank merged with Providus Bank in August 2024. The Central Bank of Nigeria (CBN) approved this merger, aiming to bolster the stability of Nigeria’s financial system and avert potential systemic risks. The combined entity now boasts an asset base of approximately ₦2.8 trillion, with customer deposits totaling ₦848.9 billion.
Despite the merger, Unity Bank remains undercapitalized, with liabilities exceeding assets by ₦326.9 billion. This financial imbalance has raised concerns about the bank’s ability to continue operations. KPMG, the bank’s external auditor, has highlighted a negative capital adequacy ratio, questioning the institution’s viability.
The CBN has set a recapitalization deadline of March 2026, requiring banks with national operations to maintain a minimum capital base of ₦200 billion. In response, Unity Bank has stated it is “exploring all options” to meet this mandate and ensure compliance.
As of now, the bank’s management is actively seeking strategies to enhance its capital base, including potential rights issues, further mergers, or strategic partnerships. The outcome of these efforts will be crucial in determining Unity Bank’s future in Nigeria’s evolving banking landscape.
