Sep 5 (Lagos) - Let's say you invested 1 million Naira in Unity Bank in 2013, you got 2 million units (forget about commission and fees), the bank did a reverse split 10-1 so your 2 million units turned into 200K units. Now you will sell those 200K units at N 3.18 per unit cashing out N 636,000. That has to be one of the worst possible deals. So after 12 years, you lost 35% of your money. Even worse, if you consider the devaluation of the Naira, you would have lost 93-95% of your investment over a period of 12 years. A Bank deposit would have been far far better than this deal. 

Let us explain in more detail if you have the time but above is what has happened.

Unity Bank Plc ( UNITYBNK ) finally got the court approvals to be acquired by Providus Bank and end the misery it carried its shareholders upon since its inception. The rumors of this takeover go back to November 2023 and now it turns out the rumors were true. Its shareholders are to receive 18 shares of Providus Bank for every 17 shares of Unity Bank or they have option to go for a cash settlement of N 3.18 per unit. 

Unity Bank Plc had probably the most terrible corporate governance and seemed untouchable by SEC and other regulatory authorities as they always went scot-free no matter how glaring their offences were. It's CEO's engaged in corrupt practices but nothing ever happened to them. Most likely they have very powerful political connections to pull off the kind of scams they did. 

Unity Bank rose out a merger of 9 regional banks in the North back in the 2004-2005 capitalization era. It was a forced marriage of various powerful regional players who all wanted to look after their own financial interests than to worry about public shareholders.

This deal with Providus Bank is the final slaughter of its long term suffering ordinary shareholders. Of course you will find many celebrating this deal on social media forums. Those are either new entrants in the market who have purchased Unity Bank shares over the past 2 years or those who have no idea what the hell they are talking about. 

We are talking about a BANK here that has negative equity for years and years and yet continued to operate, CBN did not bat an eyelid & SEC never asked questions. Amid that negative equity they managed to open a full building head quarters in Victoria Island when they shifted to Lagos from Abuja to improve market operations. While they were a Bank focused on North. 

So  let us take a look at how this deal actually is a terrible one for their LONG-TERM shareholders. By long term we mean 5 years, 10 years 15 yrs etc.

Back in December 2013, shares of Unity Bank were trading at rock bottom prices of 50 kobo per unit. The Bank decided to make some moves that would make big-time financial scammers look like small boys.

They carried an infamous shareholders meeting at the then Inter-continential Hotel in Victoria Island where one of their top management gave a speech about how they were going to turn Unity Bank into Nigeria's top commercial bank by raising funds via a rights issue and then follow it up by a reverse split (re-construction) of 10-1 which made their 50 kobo share jump in price to N 5 per unit by 2015. They cancelled out 105 billion units. 

What followed was corruption scandals and the loot of shareholders funds that saw its share price return to 50 kobo levels by 2020. So this 50 kobo was now equivalent to 5 kobo pre-split shares. No one was every arrested. After some time you just never heard of those investigations, everyone just forgot about it magically. Journalists probably received their envelops to stop covering the stories.