April 1 (Lagos) - April 1 (Lagos) - Unity Bank Plc (
UNITYBNK ) reported 2018 audited accounts that showed sharp decline in top line earnings to N 37 billion in 2018 from N 89.9 billion in 2017.
However the bank manged to return to profit in 2018 with profit after tax of N 1.26 billion in 2018 from loss of 14.9 billion in 2017
Earnings per share is 13 Kobo. No dividend as expected.
Investors should not expect much from this banks management because there is along history of corruption scandals at this bank.
The height of their management was in December 2013, when they suddenly called a shareholders meeting and announced a rights issue and a reverse split. The bank also said that they will soon become Nigeria's leading retail bank.
When someone asked what is the guarantee that the stock will not fall, some one from the management told him that it is not possible that the stock price will fall after rights issue. Since then the stock has lost 90% and shareholders have turned into bag holders.
Afterwards there was CEO who came and left due to corruption but no conviction took place.
The corporate governance at this bank is non existent or exists only in books.
Every few years rumors emerge that a foreign bank is about to buy stake in this bank, causing sharp increase in stock price. During this period, huge volumes are sold and then the stock price goes back after rumors don't materiase.
It is important that new investors take note of the history of this bank's management decisions and be very careful before investing here.
The current stock price is 87 Kobo per unit which is essentially 8.7 kobo before reverse split price. So the stock can increase suddenly due to low outstanding shares but be careful.
On April fools day, the bank comes and tells you they made a return to profitability on sharply lower top line. I am not buying it.
writer of this article is a long term shareholder (bag-holder) of unity bank plc.
easykobo does not endorse of oppose any views expressed in above article.