• Tuesday, March 05, 2024
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Unity bank to boost expansion with N40 billion rights offer

Unity Bank

The Boards of Directors of Unity Bank Plc are planning on expanding the company’s operations and increasing the market price per share of shareholders through the issuance of a N40 billion right offer.

This was among the Special Resolutions passed at an Extra-Ordinary General Meeting of the Bank which was held at the Grand African Ballroom of the Intercontinental Hotel, Victoria Island, Lagos.

The surplus nominal value of the reconstructed shares which stands at N58.7 billion will be transferred into a separate reserve account and will increase shareholders fund by 113 percent to N109.5 billion from N51.5 billion.

Unity bank, whose share price presently closed at 50k on the floor of the NSE, will be up by 400 percent to 254k immediately after the day the offer is issued, according to a Non executive Director of the bank.

“The price of the shares will not dip or fall immediately after the offer, “he said, while responding to questions asked by the owners.”It’s absolutely impossible”

There are several reasons for the public offer which includes improving on our branch expansion, investing in human capital, and the development of Information Technology.

This was made known by the Acting Managing Director and Chief Executive Officer of the bank, Rislanudeen Muhammad in a telephone interview with BusinessDay.

“This will enhance our capacity to compete evenly with our competitors “said Muhammad.” “The bank needs strong adequacy ratio to compete with its peers”

Unity Bank is ranked 9th in the banking industry based on spread with 238 branches nationwide.

Between 2006 to date, Unity Bank grew its deposit base by 297 percent. The Bank also grew its deposit by 17 percent between Dec. 2012 and June 2013.

As at 31 December 2012, Unity Bank’s total asset had more than tripled when compared to the Bank’s total asset in 2006. The Bank has grown its total operating income by 527 percent between 2006 and 31 December, 2012.

The bank came into existence as a result of the re-capitalization policy of the CBN in 2005 which saw nine banks come together to form synergy.

In order to spread the bank’s tentacles on the trajectory of global chosen arena, the board of directors unanimously gave the go ahead for Unity bank to merge with other banks with a view to consolidating its synergistic position.

“The bank can go into business combinations with any local or international bank,” according to the chairman of Unity Bank Plc Nu’Uman Barau Danbatta during the AGM.

The bank’s gross income for the nine months to September 2013 grew by 16.7 percent year on year (YOY) to N45.4 billion, compared with N38.9 billion recorded in the corresponding period 2012.

The bank’s nine month through September, 2013 financial results showed total assets were up by 11.1 percent to N439.88 billion, while Loans and advances rose by 14.1 percent to N220.40 billion.

Total customer deposits advanced by 15.4 percent to N311.6 billion-thanks to the banks retail products which are attracting more customers across the country.

According to the chairman of the bank, its share capital will be up by 100 percent to N60 billion, while a total of 38.44 billion ordinary shares of 50k each will be reconstructed into 9.61 billion shares and reconverted subsequently into N4.81 billion loan stock.

“The reconstructed shares will be allotted to shareholders in the ratio of one (1) reconstructed ordinary of 50k each for every four (4) ordinary shares of 50k each previously held said Danbatta.”

The bank has 38.44 billion shares outstanding, with shareholders funds standing at N51.5 billion at the end of September 2013.

The bank had a market capitalisation of N19 billion as at December 26, 2013.its shares closed at N50k on the floor of the Nigeria Stock Exchange on the same day.

The bank has developed a wide range of new products like the pocket money, a sister of money gram, according to the bank’s head of Corporate Communication Theodora Amaechi in a press briefing on November 22, 2013.

She went further to state that the product allows individuals to perform banking transitions with a bank account-it is designed to entice the unbanked population.

“One of our mission is to increase our share of the market by capturing the a large section of the unbanked population “said Amaechi