Finance
Unity Bank: Winner of CBN’s award
By Omoh Gabriel,Business Editor
UNITY Bank Plc is a unique creation out of the consolidation exercise implemented under the economic reform programme of government in 2005. It is unique in that in so many ways, it stood out of the pack.
This is one merger that incorporated the highest number of component banks. Under the arrangement, nine banks including Intercity, First Interstate, Tropical, Centre-Point, Societe Bancaire, Pacific, Bank of the North, NNB and New Africa Banks fused together under multi-phased business combination deals that drew the attention and applause of regulatory authorities. In fact, the Bank won one of the two awards instituted by the Central Bank of Nigeria for outstanding performance in this area.
Apart from the large number involved, the merger attracted merging parties with entrenched ownership from all the geographical zones of the country and thus qualifies as a truly Nigerian consolidation programme.
But beyond this, it also was one merger that ensured that the Northern Economic Zone remained firmly part of the Nigerian financial system.
It could therefore, serve as one of the most complicated but exciting merger of the era and was handled by some of the leading financial advisers in Nigerian capital market including DEAP CAPITAL and IBTC.
It is interesting to see that notwithstanding the large number, the post-merger Unity Bank has done appreciably well in integrating its human resources and processes. Although technological integration of its expansive branch network remains a challenge, the progress already made and success achieved have been a pleasant surprise not only to industry watchers but also discerning insiders.
But full technological integration remains a key challenge largely due to the large branch network that resulted from the merger and also the fact that several of the merging banks abinitio had very weak information technology foundation. It should be noted that Unity Bank emerged with a post-merger network of about 216 branches in 2006 making it the fourth biggest bank in Nigeria by that measure. It is the 12 biggest in asset base. Unity Bank has not rested its ambition with this organic size. It acquired a number of subsidiaries with interest in several sub-sectors of the financial market and is continuing with the drive to further spread its tentacles.
Among these are First Ventures Ltd. In the share registration business and New Devco in the stockbroking and Issuing House business. An insurance subsidiary may be unveiled in the next few months as the Bank intends to offer one-stop financial solution in the market place.
To the benefit of the Bank’s shareholders, most of the merged banks owned their properties before the merger and these assets have since appreciated in value. It is believed that this will go a long way in driving up the post-merger shares of the Bank. To appreciate the importance which directors place in assuring good value for shareholders, the Bank recently completed a share restructuring exercise with the listing of 14.74 million ordinary shares of 50 kobo each at N7.50 per share in the Nigerian Stock Exchange. This exercise gave the Bank an initial market capitalisation of N110.53 billion and a place among the top 20 capitalised stocks in the market.
It would be recalled that prior to this exercise which conserved value for shareholders, an ordinary share of the Bank was priced at N2.50 per share on a total of 44.2 billion ordinary shares. This represents a reverse stock split of one for three shares previously held by shareholders.
FINANCIAL RESULTS
The pro-forma balance sheet of the post-merger Unity Bank as at June 31, 2006 showed a total asset base of N190 billion which placed the Bank on the 12th position in the industry. This compares with the pre-merger asset base of N92.5 billion, which though excludes figures from three of the merging banks, namely Bank of the North, NN and New African Bank.
With these figures, it has become clear that Bank is one of the post-merger groups that has gained the most competitively from the consolidation exercise.
Prior to the exercise, virtually all the component banks operated peripherally in the competitive space, but now the group is one to be reckoned with as can be seen from the latest pro-forma figures as at June 2006. The Bank has yet to release the current actual figures for the year.
EARNINGS AND PROFITABILITY
Relying on the pro-forma figures, the Bank reported a gross earning of N19.9 billion. This represents about 10.5 per cent of total asset base and hence below some critical money market rates for the period. For the period, treasury bill rates hovered around 14 per cent while the Minimum Rediscount Rates (MRR) was 13 per cent. Annual inflation was about 12.5 per cent.
Although the Bank’s gross earnings expectation was lower than these critical rates, it reflected the industry’s pre-occupation with the consolidation exercise and integration issues for most of the period covered. As a matter of affirmation, the N19.9 billion gross earning reported by the bank in its scheme document represented its fair market share of four per cent of earnings of post-consolidation banks in the industry. Out of this figure, N11.9 billion or 60 per cent was accounted for by interest and discount income.
Operating costs (including direct cost of consolidation) was N12.0 billion with operations resulting ultimately in pro-forma after tax profit of N3.1 billion. This translated to 7.2 per cent return on shareholders’ fund and 21 kobo earning per reconstructed share.
This also translates to just 7 kobo earnings per pre-reconstruction shares. Due to issues related to integration, the Bank did not propose to pay any dividends, on its 2006 results. However, management is optimistic that synergistic effect of the business combination will begin to reflect in a more profound way from its 2007 results which will be due in a couple of months.
CAPITALISATION AND SAFETY ISSUES
As at June 2006, Unity Bank emerged with a core equity capital of N30.1 billion. If tier two capital of N12.8 billion is added, shareholders’ fund becomes N42.9 billion.
With this new capital base, the Bank got enhanced capacity to expand scope of its business operations both organically and inorganically. This is particularly important for re-creation of risk assets for enhanced earnings. During the process of merger, a sizeable proportion of risk assets of the merging banks were de-capitalised due to severe levels of delinquency resulting in a low post-merger book loan assets of N29.1 billion.
In fact, tier one capital as a proportion of estimated risk weighted assets was about 27 per cent, a figure considered comfortably high to support significant risk asset expansion.
Apart from expansion of risk assets, it is to be noted that the Bank has since embarked on building and strengthening of strategic alliances in the areas of stockbroking, shares registration, mortgage banking and risk-underscoring.
ASSET QUALITY AND LIQUIDITY
As mentioned earlier, a number of component banks in the Unity Bank merger Group faced significant challenges of assets that did not perform to expectations. In one particular instance, Bank of the North was reported to have as much as N50 billion out of its N58 billion loans non-performing as at March 2005. But Unity Bank benefitted substantially from the forbearance given the Central Bank of Nigeria to enable hitch-free consolidation process. Under the arrangement, the CBN granted a waiver of 80 per cent of the accommodation bill initially issued to cover this facility among others, while the balance was restructured over a number of years. The post-merger Unity Bank carried only N8.2 billion of this bill and this has helped the balance sheet quality of the Bank. Accordingly, the Bank commenced on a clean slate with virtually all the N29 billion recorded currently as loans in the balance sheet performing up to prudential standards.
Moreover, the entire asset portfolio only had 55 per cent of its proportion subject to differing risk of default. This is moderate and within the industry average exposure.
On liquidity, the scheme report showed that as at end of June 2006, about 51 per cent of assets were estimated as invested in cash, marketable securities and other short-term assets. Again, this is modest and sufficient to meet obligations to creditors and other customers. This was particularly important as expectations were high on the new Unity Bank to prove that the coming together of nine hitherto small and medium-sized banks really resulted in a strong bank that inspires confidence. This is moreso as it acquired in the process, a large customer base and deposit liabilities estimated to be about N112.3 billion as at end of June 2006.
Finance
Afreximbank successfully closed its second Samurai Bond transactions, raising JPY 81.8bn or $527m
African Export-Import Bank said it has successfully closed its second Samurai bond transaction, securing a total of JPY 81.8 billion (approx. USD 527 million) through Regular and Retail Samurai Bonds offerings.
The execution surpasses the Bank’s 2024 debut issuance size, attracting orders from more than 100 institutional and retail investors, marking a renewed demonstration of strong Japanese investor confidence in the Bank’s credit and its growing presence in the yen capital markets.
On 18 November, Afreximbank priced a JPY 45.8 billion 3-year tranche in the Regular Samurai market following a comprehensive sequence of investor engagement activities leveraging Tokyo International Conference on African Development (TICAD9), including Non-Deal Roadshows (NDRs) in Tokyo, Kanazawa, Kyoto, Shiga and Osaka, a Global Investor Call, and a two-day soft-sounding process which tested investor appetite across 2.5-, 3-, 5-, 7-, and 10-year maturities.
With market expectations of a Bank of Japan interest rate increase, investor demand concentrated in shorter tenors, resulting in a focused 3-year tranche during official marketing.
The tranche attracted strong participation from asset managers (22.3%), life insurers (15.3%), regional corporates, and high-net-worth investors (39.7%).
Concurrently, Afreximbank priced its second Retail Samurai bond on 18 November, a JPY 36.0 billion 3-year tranche, more than double the inaugural JPY 14.1 billion Retail Samurai issuance completed in November 2024.
The 2025 Retail Samurai bond also marks the first Retail Samurai bond issued in Japan in 2025.
Following the amendment to Afreximbank’s shelf registration on 7 November 2025, SMBC Nikko conducted an extensive seven-business-day demand survey through its nationwide branch network, followed by a six-business-day bond offering period.
The offering benefited from strong visibility supported by Afreximbank’s investor engagement across the country, including the Bank’s participation at TICAD9, where Afreximbank hosted the Africa Finance Seminar to introduce Multinational Development Bank’s mandate in Africa and its credit profile to key Japanese institutional investors.
MBC Nikko Securities Inc. acted as Sole Lead Manager and Bookrunner for both the Regular and Retail Samurai transactions. Chandi Mwenebungu, Afreximbank’s Managing Director, Treasury & Markets and Group Treasurer, commented:
“We are pleased with the successful completion of our second Samurai bond transactions, which marked a significant increase from our inaugural Retail Samurai bond in 2024, and which reflect the growing depth of our relationship with Japanese investors.
The strong demand, both in the Regular and Retail offerings, demonstrates sustained confidence in Afreximbank’s credit and mandate.
We remain committed to deepening our engagement in the Samurai market through regular investor activities and continued collaboration with our Japanese partners.”
Ecobank Nigeria, a member of Africa’s leading pan-African banking group, has announced the launch of the Ecobank SME Bazaar—a two-weekend festive marketplace designed to celebrate local creativity, empower entrepreneurs, and give Lagos residents a premium shopping experience this Detty December. The Bazaar will hold on 29–30 November and 6–7 December at the Ecobank Pan African Centre (EPAC), Ozumba Mbadiwe Road, Victoria Island, Lagos. Speaking ahead of the event, Omoboye Odu, Head of SMEs, Ecobank Nigeria, reaffirmed the bank’s commitment to supporting small and medium-sized businesses, describing them as the heartbeat of Nigeria’s economy. She explained that the Ecobank SME Bazaar was created to enhance visibility for entrepreneurs, expand market access, and support sustainable business growth.
According to her, “This isn’t just a market—it’s a vibrant hub of culture, commerce, and connection. From fresh farm produce to trendy fashion, handcrafted pieces, lifestyle products, and delicious food and drinks, the Ecobank SME Bazaar promises an unforgettable experience for both shoppers and participating SMEs. Whether you’re shopping for festive gifts, hunting for unique finds, or soaking in the Detty December energy, this is the place to be.” Ms. Odu added that participating businesses will enjoy increased brand exposure, deeper customer engagement, and meaningful networking opportunities—making the Bazaar a strong platform for both festive-season sales and long-term business growth. The event is powered by Ecobank in partnership with TKD Farms, Eko Marche, Leyyow, and other SME-focused organisations committed to building sustainable enterprises.
The Central Bank of Nigeria (CBN) has said that16 banks have so far met the new capital requirements for their various licences, some four months before the March 31, 2026 deadline. The apex bank also indicated that 27 other banks have raised capital through various methods in one of the most extensive financial sector reforms since 2004. Addressing journalists at the end of the Monetary Policy Committee (MPC) meeting in Abuja, CBN Governor Mr Olayemi Cardoso said the banking recapitalisation was going on orderly, consistent with the regulator’s expectations. He said, “We are monitoring developments, and indications show the process is moving in the right direction.” Nigeria has 44 deposit-taking banks, including seven commercial banks with international authorisation, 15 with national authorisation, four with regional authorisation, four non-interest banks, six merchant banks, seven financial holding companies and one representative office.
Cardoso explained that eight commercial banks had met the N500 billion capital requirement as of July 22, 2024, rising to 14 by September of the same year. The number has now increased to 16 as the industry continues to race toward full compliance. He said that the reforms would reinforce the resilience of Nigerian banks both within the country and across the continent. “We are building a financial system that will be fit for purpose for the years ahead. Many Nigerian banks now operate across Africa and have been innovative across different markets. These new buffers will better equip them to manage risks in the multiple jurisdictions where they operate,” Cardoso said. According to him, the reforms would strengthen the financial sector’s capability to support households and businesses. He said, “Ultimately, this benefits Nigerians—our traders, our businesses and our citizens—who operate across those regions. “It should give everyone comfort to know that Nigerian banks with deep local understanding are present to support them. Commercial banks are also creating their own buffers through the ongoing recapitalisation.”
He added that the apex bank considered several factors in determining the new capital thresholds, including prevailing macroeconomic conditions, stress test results and the need for stronger risk buffers. He reassured on the regulator’s commitment to strict oversight as the consolidation progresses. “We will rigorously enforce our ‘fit and proper’ criteria for prospective new shareholders, senior management, and board members of banks, and proactively monitor the integrity of financial statements, adequacy of financial resources, and fair valuation of banks’ post-merger balance sheets,” Cardoso said. He said the CBN remained confident that the banking system would emerge stronger at the conclusion of the recapitalization exercise, with institutions better prepared to support Nigeria’s economic transformation Banks have up till March 31, 2026 to beef up their minimum capital base to the new standard set by the apex bank. Under the new minimum capital base, CBN uses a distinctive definition of the new minimum capital base for each category of banks as the addition of share capital and share premium, as against the previous use of shareholders’ funds.
While most banks have shareholders’ funds in excess of the new minimum capital base, their share premium and share capital significantly fall short of the new minimum definition. The CBN had in March 2024 released its circular on review of minimum capital requirement for commercial, merchant and non-interest banks. The apex bank increased the new minimum capital for commercial banks with international affiliations, otherwise known as mega banks, to N500 billion; commercial banks with national authorisation, N200 billion and commercial banks with regional license, N50 billion. Others included merchant banks, N50 billion; non-interest banks with national license, N20 billion and non-interest banks with regional license will now have N10 billion minimum capital. The 24-month timeline for compliance ends on March 31, 2026. Under the guidelines for the recapitalisation exercise, banks are expected to subject their new equity funds to capital verification before the clearance of the allotment proposal and release of the funds to the bank for onwards completion of the offer process and addition of the new capital to its capital base. The CBN is the final signatory in a tripartite capital verification committee that included the Securities and Exchange Commission (SEC) and the Nigeria Deposit Insurance Corporation (NDIC). The committee is saddled with scrutinising new funds being raised by banks under the ongoing banking sector recapitalisation exercise.
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