Unity Bank Plc released its 2016 first quarter results showing pre-tax profits for the quarter of N920.5 million representing a drop of about 73% when compared to the N3.2 billion reported a year earlier.
The banks also reported a Gross earnings of N12.4 billion compared to N15.5 billion a year earlier. Whilst the result was poor what was more worrying was the huge retained earnings the bank is still carrying in is balance sheet. According to the results the bank had a negative retained earning of N116.2 billion with just about N10.4 billion in its premium account. This means it does not even have the enough share premium to set off against negative accumulated profits.
The bank embarked on a share reconstruction exercise where its price from 50 kobo to about N5. The share price is currently less than N1. The bank’s balance sheet should be troubling to shareholders who are by now asking questions on what’s next. Should the bank raise more equity, get bought out or be taken over by the government. The bank will hope that the latter never happens.
