Unity Bank’s financial woes stem from a loan portfolio heavily concentrated in the agriculture sector, accounting for 91% of its lending.
Amidst mounting financial instability, Unity Bank’s 2023 was defined by significant losses, including ₦203 billion in impaired loans, and a reduction in its workforce, with 27 staff members, both senior and non-management, let go. The bank’s long-awaited 2023 financial results, released in February 2025, revealed that 23 non-management employees were laid off, alongside four senior management staff.
These developments exacerbate concerns about Unity Bank’s financial health, which has been in question since 2018 when it accumulated losses of ₦338 billion. By 2023, the bank’s ability to continue operations was again challenged as shareholder capital was wiped out, fueling speculation about potential license revocation.
The bank made a loss after tax of ₦62.6 billion for the year ended 31 December 2023 reversing the gains in 2022 when it made a profit of ₦941 million. As of that date, the Bank’s total liabilities exceeded its total assets by ₦326.9 billion and the capital adequacy stood at -76.14%. A note by auditors KPMG said the bank fell short of the 10% minimum capital requirement of ₦25 billion for a national bank and the Capital Adequacy Ratio (CAR) stipulated by the Central Bank of Nigeria (CBN).
This precarious situation mirrored a 2010 crisis where the bank faced recapitalisation or merger due to ₦53 billion in bad loans. The CBN has intervened multiple times, including a recent ₦50 billion short-term financial accommodation to augment working capital, with a maturity date of December 31, 2024. Subsequently, the CBN provided a ₦700 billion accommodation to clear bad debts before the planned merger with
Providus Bank, according to the 2023 financials.
The deal is advantageous for Providus, which is eager to expand its retail presence and benefit from Unity Bank’s network of 240 branches nationwide. Following the CBN’s approval, the post-merger balance sheet is anticipated to establish a robust balance sheet of ₦3 trillion ($1.8 billion).
How did Unity Bank get here?
Unity Bank’s financial woes stem from a loan portfolio heavily concentrated in the agriculture sector, accounting for 91% of its lending.
The bank received substantial borrowings from the African Export-Import Bank and the Bank of Industry (BOI) and played a key role in the CBN’s Anchor Borrowers’ Programme. In 2023, loans from these sources were reduced to ₦111 billion from ₦297 billion in 2022.
Gross loans reached ₦361 billion in 2023, up from ₦292 billion in 2022. However, based on CBN prudential guidelines, the bank recorded ₦203 billion in impairments (or ₦156 billion under IFRS).
Further contributing to the bank’s predicament were loans to key management personnel.
In December 2022, two former directors—Thomas Etuh(Nigerian fertiliser billionaire) and Bola Shagaya (an oil and gas magnate) borrowed ₦17 billion as term loans from the bank. The figure reduced to ₦7 billion in 2023. Additionally, the bank incurred ₦9 billion in regulatory fines, with ₦4 billion imposed by the CBN and ₦5 billion by the Nigerian Exchange Group (NGX).