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Unity Bank Grows 34% Pre-Tax Profit, Records N23B Gross Earnings In H1 2021

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Nigeria’s retail lender, Unity Bank Plc has declared a half-year result posting gross earnings of 23.6 billion Naira, which is a 3% increase compared with the corresponding period of 2020.

A review of the unaudited half-year result (H1’2021) released to the Nigerian Stock Exchange, the Agric-focused lender showed notable improvement across key financial matrices. The Bank grew bottom-line by 34% as Profit before Tax (PBT) moved up significantly in positive territory to close at N1.50 billion from N1.12 billion recorded in H2 2020.

Similarly, the Profit After Tax, PAT closed at N1.38 billion within the period under review from N1.03 billion recorded in the corresponding period of 2020, a sign of a stronger recovery in the overall economy and the Bank’s key focus market segment after a disruptive pandemic year.

A major highlight of the result is the growth in the Bank’s loan book, which saw a 22% increase to N246.90 billion within the period compared to N202.08 billion recorded in H2 2020.

The lender also sustained a growth trajectory in its assets as total assets for the period rose by 11% to N547.37 billion from N492.02 billion as of December 31, 2020.

Other highlights of the financial statement include a 21% jump in fee and commission income to N3.07 billion from N2.54 billion in the corresponding period of 2020; and N9.87 billion upticks in net interest incomes, representing a 9% increase from the N9.06 billion recorded in the corresponding period of 2020.

Interest and similar income also rose though recording a marginal 2% growth to close at N20.27 billion compared to the N19.79 billion recorded in half-year 2020. Earnings per share rose by 3 kobo to close at 11.82 Kobo within the period compared to 8.82 Kobo recorded in the corresponding period of 2020.

The financial report also contained the details of the three months to June 2021 (Q2 2021) report showed that the Bank recorded a 17% leap in gross income to N12.32 billion from N10.50 billion recorded in the corresponding quarter of 2020.

Pre-tax profit for the period closed at N718.0 million, a 31% increased from N546.35 million recorded in Q2 2020, while Profit After Tax equally closed at N660.57 million from N502.65 million recorded in the corresponding review period.

Commenting on the result, the Managing Director/CEO, Unity Bank Plc, Mrs. Tomi Somefun noted encouraging trends in key performance indicators driving the numbers reported in the H1 result, in that the Bank is beginning to reflect greater consistency, steady outlook, and resilience that places it on a performance pedestal ahead of the volatilities in the operating environment occasioned partly by the prevailing global pandemic and other market shocks that have far-reaching implications in the local and foreign economies.

The double digits growth recorded in both earnings and profits, she further added, was the result of a portfolio plan which the Bank set out in the beginning of the year to diversify its portfolio whilst incrementally pursuing asset creation in petrochemical downstream, consumer, healthcare, and general commerce with agribusiness providing the bulwark for identified business and brand benefits.

She stated that the Bank will be looking to strengthen its balance sheet from the liability side as it continues to grow its brand franchise in many areas of the retail market by promoting and leveraging its Agriculture value chain businesses as an offshoot to achieve better performance ratios that enable it to expand the scope of business for an even greater outcome.

Analysts share the optimism on the growth trajectory achieved on the back of contributions from diverse portfolio investments which is a radical departure from the past.

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BIG STORY

NNPC Declares Zero FAAC Remittance For Eighth Time As Subsidy Gulps N2.6trn

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The Nigerian National Petroleum Company (NNPC) Limited says it deducted N525.71 billion as a shortfall for the importation of petrol (subsidy) in August 2022.

Subsidy or under-recovery is the underpriced sales of premium motor spirit (PMS), better known as petrol.

The national oil company said this in its monthly presentation to the Federation Account Allocation Committee (FAAC) meeting on Friday, September 23.

The FAAC document showed that due to the subsidy payment, the oil company failed to remit any funds to the federation account for the eighth consecutive time.

Analysis showed that NNPC had spent N2.565 trillion on petrol subsidy payments since the beginning of the year.

“The sum of N525,714,373,874.60 being federation account share was used to defray value shortfall/subsidy for the month,” NNPC Limited said.

“The value shortfall on the importation of PMS recovered from August 2022 proceeds is N525,714,373,874.60 while the outstanding balance carried forward is N983,365,057,776,20.

“The sum of N525,714,373,874.60 applied to defray value shortfall/subsidy is made up of $2,337,591.52 being 40 percent of PSC.”

Petrol subsidy has remained a controversial issue in Nigeria as spending continues to deplete the country’s revenue.

In January, February, March, and April 2022, the petrol subsidy gulped 210.38 billion, N219.78 billion, N245.77 billion, and N271.13 billion, respectively. Also, in May, June, and July, the country spent N327.07 billion and N319.18 billion, and N448.78 billion, respectively.

This year, the federal government plans to spend up to N4 trillion on costly petrol subsidies due to high global oil prices.

However, it plans to stop subsidy payment by June next year, with plans to spend N3.35 trillion as contained in the 2023-2035 medium-term expenditure framework and fiscal strategy paper (MTEF&FSP).

The oil company said it recorded an overall crude oil lifting of 8.49 million barrels (export and domestic crude) in July 2022, representing a 16.78 increase compared to the 7.27 million barrels it lifted in June 2022.

“Production in July 2022 averaged 1.183 barrels per day (OPEC),” it added.

Credit: The Cable

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BIG STORY

We’ve Made TCN Financially Viable To Provide More Electricity, President Buhari Assures Investors

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… says TCN can now invest in its own infrastructure

President Muhammadu Buhari has assured investors that his government is doing what is necessary to make Nigeria a viable investment destination for them.

Buhari said one of the ways his government has done this, is by making the Transmission Company of Nigeria (TCN) financially viable to provide more electricity for the country and investors.

The president, who was represented by Ibrahim Gambari, his chief of staff, said Nigeria needs N298.3 trillion from private sector players to achieve the objectives set out in the National development plan.

“As you may be aware, Nigeria’s National Development Plan (2021 – 2025) was formulated against the backdrop of several subsisting development challenges in the country and the need to tackle them within the framework of medium and long-term plans,” he said.

“This all-encompassing plan aims to generate 21 million full-time jobs and lift 35 million people out of poverty by 2025, thus setting the stage for achieving the government’s commitment of lifting 100 million Nigerians out of poverty in 10 years.

“To attain the objectives of the National Development Plan (2021 – 2025), we estimate that we would require an investment commitment of about N348 trillion.

“Government capital expenditure during the period will be N49.7 trillion (14.3 percent) while the balance of N298.3 trillion (85.7 percent) is expected from the Private Sector. Of the 14.3 percent government contribution, FGN capital expenditure will be N29.6 trillion (8.5 percent) while the Sub-National Governments’ capital expenditure is estimated to be about N20.1 trillion (5.8 percent).

“The successful implementation of this Plan will, therefore, be heavily dependent on strong partnerships between the private and public sector, both within and with Development Partners outside Nigeria.”

Speaking about the challenge of electricity, Buhari said the Presidential Power Initiative will provide electricity for 40 million people in the country.

“The first phase of the Presidential Power Initiative will provide over 40 million people with more reliable electricity supply, and create 11,000 direct and indirect jobs for Nigerians,” he added.

“This will be from power system engineers to electricians and contractors, and this will in turn improve the standard of living while providing homes and businesses with constant, reliable, and affordable electricity supply.

“You may also wish to note that at the commencement of this Administration, N200 billion was paid for stranded power to service existing liabilities. Contract terms in Power Purchase Agreements were changed from “Take or Pay” to “Take and Pay.”

“Similarly, the Distribution Companies were made to use banks for bill collections, prior to this, Transmission Company of Nigeria was getting only 50% of proceeds. Now, TCN is financially viable and can invest in its own infrastructure.”

Buhari said his administration also provided sovereign guarantees for vital infrastructure projects in the country.

The president added that “the Federal Government of Nigeria has always recognized security as another critical element in the flow of investment and overall economic and infrastructural development anywhere,” committing to solve Nigeria’s security challenges.

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BIG STORY

‘We Can’t Run Up A Hill Carrying Bag Of Sand’, Nigeria Needs Help With Debt Burden — Akinwumi Adesina

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… says investing in Nigeria is like roses with thorns

Akinwumi Adesina, president of the African Development Bank (AfDB), says Nigeria needs help from the international community in tackling its debt burden.

Speaking at the Nigeria International Economic Partnership Forum in New York on Thursday, Adesina said financing is critical to solving Nigeria’s development challenges.

“Financing is critical because the debt to GDP ratio of Africa has increased to 70 percent, and several countries are the risk of high debt distress due to unstable, unsustainable debt levels,” he said.

“Nigeria’s total debt level is N42.84 trillion or $103 billion. External debt levels stand at N16.61 trillion or $40 billion. Ladies and gentlemen, Nigeria needs help to tackle this debt burden.

“International partnerships on debt are helping Africa and Nigeria. The issuance of special drawing rights (SDR) by the International Monetary Fund of $650 billion helped provide liquidity support for countries. However, Africa only received $33 billion out of all of that. Pretty small.

“A call made by the African heads of State for developed economies to rechannel $100 billion of additional SDRs to Africa will go a long way to reduce the debt burden in Nigeria.

“Allocating this SDR, some of this, through the African Development Bank will actually allow us to leverage it four times because we are a leveraging machine. We can deliver more financing to Nigeria and Africa.

Nigeria and other African countries, in my view, therefore need debt relief. They cannot run up the hill carrying a backpack full of sand.”

He said African countries, including Nigeria, need international partnership to tackle climate change.

Adesina said to understand this, all you have to do is take a look at Lake Chad in Nigeria, stating that the continent loses $15 billion as a result of climate change.

The AFDB president said while there are roses in Nigeria, “roses come with thorns” and that Nigeria’s huge economic potential also comes with a few thorns.

“Those thorns should not discourage us, they call on us to strengthen international partnerships around Nigeria. Nigeria’s growth will be conditioned on its ability to fix its massive infrastructure deficit.

He said the National Integrated Infrastructure masterplan shows Nigeria would need a total financing of $759 billion up until 2043.

Adesina concluded his intervention by referring to a classic by Michael Jackson, asking Nigerian leaders to look at the man in the mirror, and change where necessary.

“I’m talking about the man in the mirror, I’m asking him also to change his ways. We must change our ways sometimes. To attract greater foreign direct investment to Nigeria, we must fix security, capital does not like to be troubled.

“With the right conditions in place, we can confidently say Nigeria is a great investment destination; believe in us, invest in us, invest with us, and you will not be disappointed,” he concluded.

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