Exclusive:  Unity Bank Struggles To Survive As CBN Hammer Dangles

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Despite its outward display of a robust financial base, Unity Bank, one of Nigeria’s surviving banks is financially sick and needs urgent rescue by the Central Bank of Nigeria (CBN), The Bridge News can report.

Unity Bank in the last few years has faced the uphill task of strengthening its financial base, struggling to meet its financial obligations to staff, depositors and the CBN, a development that is causing apprehension in the financial sector.

Our correspondents gathered that the unstable financial base of the bank coupled with its weak governance structure has been a major cause of concern to the CBN.

Our correspondent further gathered that the CBN has been hesitant to continue to inject funds into Unity Bank and has therefore given it a timeline to strengthen its financial base or face dire consequences.

The development it was learnt is causing apprehension among depositors who are rushing to draw up their money from the bank.

“If this situation is not urgently addressed, this could harm the bank,” a top financial experts said adding that the apex bank needs to “take drastic measure to resuscitate the suffocating bank”.

“The financial audit of the bank is bad and with that report, no reasonable investor would like to put in any money into such business and the CBN wouldn’t want to standby and see the bank go down, so the credible alternative is for it to salvage the situation,” a source in the financial sector told our correspondent in the course of this report.

The source who spoke to our correspondent, on the condition of anonymity added, “nobody really knew the financial state of First Bank until the bubble bursted. Some of the banks in the country are just struggling and Unity Bank is one of the banks. Sadly, they have not been able to mobilize the needed funds to stabilize it financial base. The urgent concerns now for the CBN is to see how it can rescue the ailing bank to avoid severe consequences for the economy”.

But in a response to The Bridge News inquiries, on the financial health of the Unity Bank, the bank’s head of Corporate Communications Mr Matthew Obiazikwor, said although the bank needs support to shore up its financial base, the grime situation painted in the public is far from the truth.

According to him “on capital raising, although the global pandemic delayed the capital raising process, the exercise is well on course. There is a clear process around capital injection which would be made public in due course“.

He however, said the current financial reports of the bank shows positive fundamentals adding that “In its FYE 2020 audited results releases recently, Unity Bank posted reports that shows stronger and growing fundamentals across major indices and key performance indicators that alludes to healthy growth of its balance sheet on a consistent basis”.

Obiazikwor Said “the Bank substantially grew its customers’ deposit portfolio to N356.62 billion, up from N257.69 billion in the corresponding period of 2019, representing a 38.4% growth”.

“This affirms positive market uptake of the Bank’s product offerings, as well as the lender’s growing customer base to its recent aggressive push with agile customer-centric products, which has played a role in deepening financial services penetration especially to a wider world, underserved spectrum of the retail market,” it further stated.

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