Unity Bank Plc shareholders are rushing to cash in their investments after the bank’s stock dropped, leaving the lender with a loss of over N400 million, according to E-Nigeria Newspaper sources.
Shareholders of Unity Bank saw their investments rise by 3.3 percent last week as a result of renewed investor interest in the company’s stock on the capital market. However, things have changed in the last 48 hours, with aggrieved shareholders rushing to take out investments after the company’s shares dropped by N467.57 million.
E-Nigeria Newspaper previously reported on Unity Bank Plc’s crisis, stating that the bank had failed to fulfill the CBN’s minimum capital requirement and Capital Adequacy Ratio – CAR, which is 10% for a bank with a national banking license. READ IT HERE
Meanwhile Unity Bank stock was valued at N0.59kobo per share on July 15, but it depreciated the next day to N0.54kobo. However, between July 17 and July 23, it rose from N0.55kobo to N0.61kobo.
The Bull Run of Unity Bank continued on Monday, with a small gain to N0.62kobo. On Tuesday, however, the increase in share value was short-lived.
Some investors took steps to secure their gains from last week’s increase, which netted them N233.78 million. According to data available E-nigeria, the selloff among stakeholders led Unity Bank’s market value to plummet by 6.45 percent on Tuesday.
In contrast to the 669,132 shares sold on Monday at N0.62kobo, almost 1.09 million shares were sold off at a lower rate of N0.58kobo per share on the capital market.
The sell-off on Tuesday resulted in a loss of almost N467.57 million in the value of the surviving stakeholders’ assets.
Unity Bank Plc shareholders have raised severe concerns about the bank’s difficulties, urging the board and management to address them as soon as possible.
The shareholders announced this at the lender’s 15th Annual General Meeting (AGM) on July 1, 2021, at its Lagos headquarters.
At Unity Bank Plc’s AGM, which was broadcast live online and covered monitored by this publication, shareholders expressed worry that the board had yet to find a suitable investor to save the bank from failure.
However, the financial institution run by the beleaguered Oluwatomi Somefun appears to be encountering increasing difficulties, prompting questions about her ability to take the bank to greater heights.
In an earlier article, E-Nigeria said that the bank’s board of directors and some important shareholders had allegedly lost faith in Mrs. Somefun’s ability to turn the bank back, but were persuaded to do so by former President Olusegun Obasanjo. READ IT HERE
Mr. Kabiru, one of the aggrieved shareholders, expressed concern at the AGM about the negative media reports about the bank. He pushed Mrs. Somefun and the bank’s management staff to confront the bad rumors. “We don’t want to hear anything negative about Unity Bank in the future.” We’ve had enough of the nasty news in the media, MD. We no longer want to hear terrible news about the bank; instead, we want to hear good news.
“I also want to make a plea to our chairman, who is a young man with a lot of enthusiasm and resources, to keep our bank alive.
“We are aware of what is going on in the globe and in the economy, as well as our earnings, which has decreased from N3 billion to N2 billion, and we are confident that the bank will survive, God willing.
The financial institution’s performance pattern has scarcely pleased investors in the last five years, and there have been patches of weakness here and there, signaling that Unity bank is indeed headed for a catastrophe.
For example, from N13.639 billion in 2014 to N2.342 billion in 2015, the company’s earnings before tax fell by 82 percent. In addition, it decreased by 22% from N2.342 billion in 2015 to N1.816 billion in 2016.
In 2017, the bank posted a loss before tax of N14.243 billion, compared to a pre-tax profit of N1.816 billion in 2016, and a loss before tax of N7.554 billion in its restated results in 2018, but a pre-tax profit of N3.642 billion in 2019, and N2.223 billion in 2020.
How long will it take for Unity Bank to reclaim its former glory? Is it possible under the leadership of Tomi Somefun, the CEO, and Aminu Babangida, the Chairman? This discussion raises these and other issues.