As Unity Bank Plc liquidity crisis gets messier, the bank’s managing director and chief executive officer, Ms. Oluwatomi Somefun, is said to be fighting hard to save her job even as the lender plans to hold its annual general meeting (AGM) on the 1st of July 2021.
Inside sources disclosed that bank’s board led by Aminu Babangida, (son of Ibrahim Babangida) has lost confidence in the leadership of Somefun as she has failed to turn around the fortunes of the bank.
This medium also gathered that the lender’s shareholders have also questioned the capacity of Somefun and thereby called for her sack.
A close look at the books of Unity Bank shows that the lender is in dire need of urgent capitalisation if it must eventually survive the CBN hammer.
Even the bank’s external auditor, KPMG Professional Services, raised a red flag in 2019 and 2020 on the existence of Unity Bank, when it pointed out that the bank’s total liabilities exceeded its total assets by N279 billion and that the lender did not meet the required minimum CAR of 10 per cent for a national bank.
Agusto & Co. had also assigned a “BB-” rating to the bank, meaning that it is junk, which is below investment grade.
KPMG had warned that “a material uncertainty exists that may cast significant doubt about the bank’s ability to continue as a going concern.”
However, the board has expressed strong confidence that it would salvage the situation and get the financial institution back on its feet.
In the 2020 reporting year, the auditor again warned about this persistent matter and in the results, it was noted that in the year, Unity Bank only managed a pre-tax of N2.1 billion, lower than N3.4 billion in 2019 and its total liabilities exceeded its total assets by N275 billion versus N279 billion in 2019, with CAR of -101.29 per cent as against -200.8 per cent in 2019).
“The bank, therefore, did not meet the minimum capital requirement and the CAR as stipulated by the CBN for a bank with a national banking license which is 10 per cent.
“The directors acknowledge that uncertainty remains over the timing of the recapitalisation of the bank.
“However, the directors [have] reached an advanced stage with both local and multinational investors in the fund mobilisation for the bank,” the results said.
In the last five years, the performance trend of the financial institution has hardly tickled investors and there have been patches of weaknesses here and there, indicating that all is not well with the bank.
For instance, its profit before tax slumped 82 per cent from N13.639 billion in 2014 to N2.342 billion in 2015. It also dropped by 22 per cent from N2.342 billion in 2015 to N1.816 billion in 2016.
In 2017, the bank had a loss before tax of N14.243 billion compared with the pre-tax profit of N1.816 billion in 2016 and in 2018, in its restated results, the bank recorded a loss before tax of N7.554 billion, but in 2019, it was a pre-tax profit of N3.642 billion and in 2020, it slumped to N2.223 billion.