In what financial pundits posit as an impressive leap within a slow-moving economic environment, Unity Bank recorded 24% increase in its 2013 half-year pre-tax profit.
This is coming on the heels of a whopping 130% increase in Profit After Tax (PAT) at the end of 2012.
There are strong indications that Unity Bank’s performance, despite increasing regulatory pressure and significant local and international economic slow-down, may have attracted the attention of foreign and domestic venture capitalists keen on investing in high potential financial service operators in Nigeria.
This may also not be unconnected with the bank’s ISO certification in August 2012 and PCIDSS in April 2013, making it the second of the only two banks in Nigeria in possession of two of the world’s most important international certifications for future-ready financial service providers.
Besides the strong corporate governance culture which Unity Bank is reputed to have, the positive picture of its bottom-line has been found to be encouraging to investors as well. Gross earnings at the end of 2012 increased by 16% while total operating expenses declined by 8%; interest and similar income grew by 30%, impacting positively on its cost to income ratio, a development, industry watchers say, investors are salivating over.
Investigations have revealed that top contenders include the Lagos-based Verod Capital Management; Development Partners International – based in the UK; and Bank of Africa, an intercontinental banking and investment conglomerate. Reports indicate that the investors are looking to partner with Unity Bank, which is currently expanding its business reach and growing its market share in Nigeria’s under-exploited, yet lucrative retail banking sector.
Checks suggest that Development Partners International (DPI), which was established in London in 2007, has indicated willingness to make a commitment of up to $200 million in Unity Bank Plc, even as the investor currently manages a $400 million private investment fund and is in the process of raising a further $500 million in investment funds. With an investment portfolio cutting across several sectors pan-Africa, there is high level optimism among finance analysts that DPI’s entry into Nigeria’s banking industry through Unity Bank will redefine the retail market segment and hike the stakes in terms of competition.
More revelations have also emerged that one of DPI’s most recent equity investments was the 67% stake it acquired in one of GT Bank’s former subsidiaries, Guaranty Trust Assurance, but has changed its corporate identity to Mansard Insurance.
Meanwhile, Verod Capital Management, which was established in Lagos in 2008, has in its investment portfolio interests in financial services, consumer products, agribusiness, real estate and civil engineering; and checks have revealed that the company has indicated interest in investing as much as $160 million in Unity Bank.
Further investigations indicate that Verod is focused on acquiring majority or minority equity stakes in businesses with strong market position, free cash flow potential and substantial value creation through growth and operational improvement. They consider Unity Bank to be the appropriate channel through which to inject their capital.
Even though officials within Unity Bank are keeping these developments close to their chest and have not indicated willingness to comment on the issue, discourse within financial cycles suggest excited anticipation of new capital injection in Unity Bank that may significantly stimulate activity in an industry many view as already weighed down by a flurry of regulatory pronouncements and a slow economic activity in the past half year.
According to financial speculators, the Morocco-based Bank of Morocco is also in the game even as investigations show that discreet talks are currently on-going. With a network of fourteen commercial banks in fourteen African countries, analysts say that Bank of Africa group comes with a strong pedigree for routing its competitors. There are suggestions too that its interests in investment and mortgage banking, brokerage, leasing, and assets management may well place it in a strategic position to snatch a 50% stake in Unity Bank, thus effectively positioning itself as a major player in the nation’s under-tapped retail banking segment.
Meanwhile, the Nigerian Stock Exchange (NSE) disclosed to newsmen penultimate week the voluntary retirement of the Managing Director of Unity Bank, Alhaji Ado Yakubu Wanka.
Wanka joined Unity Bank in 2008 as its Group Executive Director, Risk Management and Controls but began his banking career in 1988 with the then Nigerian International Bank (Citibank Nigeria) as a Deputy Manager before moving to the then FSB International Bank Plc (1991-1997) where he rose to become an Executive Director. He assumed duty as the MD/CEO of the then Gamji Bank Limited in 1997 and then moved to First Bank of Nigeria Plc in 1998 as an Executive Director where he spent eight years.
Alhaji Ado Wanka was the Chairman, Newdevco Investments and Securities Company Limited (a member of the Unity Bank Group). He is also a member of the Institute of Directors (IoD) and fellow of the Nigerian Institute of Management (FNIM) and Fellow Chartered Institute of Bankers (FCIB).
It was gathered that the bank’s Executive Director, Enterprise Risk Management, Rislanudeen Muhammad has taken over the reins of one Nigeria’s leading retail bank as its Acting Managing Director. Checks reveal that he holds a B.Sc. in Economics from the Bayero University Kano (1982-1985) and MSc. Economics from Ahmadu Bello University, Zaria (1988-1990). An alumnus of Harvard, London and Lagos Business Schools, he holds the professional memberships of the Chartered Institute of Bankers of Nigeria (CIBN), The Nigerian Institute of Management Consultants, and The Nigerian Economic Society where he is a life Member.
The bank’s 2011 Annual Report, mentioned that Mr. Muhammad joined Unity Bank Plc in 2006 and has held several positions, ranging from General Manager, Retail & Commercial Banking North (2006 – 2009), Executive Director, Retail & E-Banking (2009), Group Executive Director, Northwest (2009 – 2011).
Financial analysts suggest that considering the bank’s strong IT platforms which resulted in the bank being one of the only two Nigerian banks to obtain the global ISO270001 and PCIDSS certification, the flurry of investment interest may not be unconnected with the desire of foreign investors to partner with a local financial service provider that has the requisite level of technological capacity to enable it blend seamlessly with other global financial operators.
A reliable source disclosed that “investors want a partner that has the demonstrable technical capacity to blend with the mainstream global financial system and equally has succession planning, especially for top management, at the core of its strategy.
Unity Bank has an edge there and I am not surprised that the bank is getting so much attention from investors”.
