Unity Bank Plc Q1 Profit Drops 32.4 %

CHUKS OKORONKWO

Unity Bank Plc in compliance with its post regulatory requirements made available it first quarter (Q1) financial reports for the period ended march, 2017, through the Nigeria Stock Exchange.

The report made available on Tuesday May 2, shows a plunge in profit after tax (PAT) by N314.564 million or 32.4 percent to N657.740 billion from N972.304 billion in its books in the corresponding period of 2016.

Comparatively, total revenue mirrored by the gross earnings depreciated by 8 percent to N20.171 billion in March 2017 from N21.853 billion in the same period of 2016. Profit before tax (PBT) went down by N326.030 million or 30.8 percent to N730.822 million from N1.057 billion recorded in the corresponding period of 2016.

Interest income which shows the level of returns from Unity bank’s investments appreciated by 11.57 percent to N19.440 billion from N17.424 billion the bank raked in the parallel period of 2016. On the other hand, interest expenses skyrocketed significantly by 110.5 percent to N9.231 billion from N4.386 billion recorded in March 2016. The financial service institution spent 45.8 percent of its gross earnings in sourcing for finance.

The magnificent rise in interest expenses was the major driver which dragged the bank’s profit before tax and profit after tax by 30.8 percent and 32.4 percent respectively.

Since profits majorly determine the earnings per share and share prices, the bank lost 2.69 kobo in its earnings per share to 5.63 kobo in March 2017 from 8.32 kobo it raked in the same period of 2015, while its share price depreciated by 0.06 kobo from 0.64 kobo it opened in the month of April to closed the at 0.58 kobo per share.

Another noticeable bullet in the bank’s financial report was the 45.2 rise in the ‘other liabilities’ in three months. Compared with what the bank recorded in December 2016, ‘Other Liabilities’ rose to N18.162 billion from N12.504 billion recorded in its book at the end of 2016 business year which analyst think should be looked into by the management so that expenses from this angle do not eat up the bank’s profits in future hence the interest of its share holders.

However, depositors’ confidence in the bank, mirrored by customers’ deposit rose by 2 percent to N269.482 billion in March, 2017 from N264.196 billion recorded in December, 2016.