Unity Bank a mid-tier Nigerian lender saw its woes deepen in the first six months (H1) of 2023, as it recorded a massive loss of N38.86 billion for the period.
The bank is also technically insolvent as it had negative shareholder funds or total equity of –N178.82 billion as at June 2023.
While gross revenues of N27.75 billion were flat compared to 2022 levels, Unity Bank was hit by higher interest expense and humongous Foreign Exchange (FX) revaluation loss of N35.4 billion.
Nigerian companies have been hit by a 40% devaluation of the currency after newly elected President Bola Tinubu moved to a more market friendly set of reforms, however banks that are positioned net long the dollar have booked FX gains.
The FX losses booked by Unity Bank suggests it was positioned net short (FX liability), per the dollar, banking sources told MoneyCentral.
Unity Bank stock has gained 143% year to date, closing at N1.34 per share in Friday’s trading.
The Unity Bank Board says it expects that; “barring unforeseen circumstances, the results would improve materially following initiatives already set in motion.”
MoneyCentral expects market direction of the stock in Monday’s trading session to determine if investors retain confidence in the Board’s pronouncement.