Unity Bank Share Price Remains Flat at N1.51 after Merger Deal with Providus Bank

Kayode Tokede

The stock price of Unity Bank Plc, yesterday traded flat at N1.51 per share after the Central Bank of Nigeria’s (CBN) approval of its merger with Providus Bank Plc.

Activities in the banking stock was inactive as it recorded nil volume and value on the Nigerian Exchange Limited (NGX).

The stock price closed trading yesterday at N1.51 per share, dropping N0.01 or 0.66per cent from N1.52 per share it closed for trading last week.

In its year-to-date performance, Unity Bank stock price on NGX has depreciated by N0.11 or 6.79 per cent from N1.62 per share it closed for trading in 2023.

Capital market analysts have expressed mixed reactions over Unity Bank delisting from the Exchange.

Speaking with THISDAY, the Vice President, Highcap Securities Limited, David Adnori, stated that the senior partner and scheme of agreement in the merger would decide if Unity Bank is going to delist from the Exchange.

“I do not think Providus Bank is as big as Unity Bank. I expect the product of the merger to still remain in the interest of the financial market.  The market is yet to know the agreement between the two banks and we will have to examine it for us to know the senior partner in the merger that is absorbing the other.   It will enable us to know if Unity bank is going to be delisted from the stock market.”

Responding also, investment banker and stockbroker, Mr. Tajudeen Olayinka said: “I think it is in the interest of the two banks to take steps to put their respective banks on the path to meeting the new capital requirements for banks as stipulated by CBN.

“CBN also indicated that it was providing financial accommodation for the two banks to sustain their post-merger existence.

“The implication of this is that the proposed merger of the two banks must have been regulatory induced. It also suggests that at least one of the two banks may not be in a good financial position to attract a suitor, hence the need for CBN to provide financial accommodation, which I suspect to be a stabilisation facility in the form of a term loan.

“Clearly, the essence is to ensure survival of the two banks post new capital requirements’ deadline.”

Unity Bank commenced operations in January 2006, following the merger of nine banks with competences in investment, corporate and retail banking. It is one of Nigeria’s leading retail banks with 213 business offices spread across the 36 States and Federal Capital Territory.

It recently posted negative results in its recently released financials for the nine-month period ended September 30, 2023.

Precisely, the bank’s financial results released on the NGX had shown loss after tax of N47.917 billion, down by 2,461 per cent from profit after tax (PAT) of N2.029billion in the same nine months period of 2022.

It had also reported Foreign Exchange (FX) revaluation loss of N38.162 billion, an increase by 70,565 percent from N54.005 million FX revaluation loss it recorded in nine months to September 2022.

 Its gross income in the nine-month period was also N38.183 billion, which was a decrease by 10 per cent, from N42.292 billion gross income recorded in the comparable period of 2022.