Unity Bank's foreign exchange revaluation loss for the period stood at N35.4 billion, compared to N16.2 million a year earlier.

AMCON-backed Unity Bank Plc reported a net loss of N38.9 billion for the first six months of the year in contrast to a net profit of N1.7 billion recorded a year ago, its newly issued financial report has shown.

The big blow to earnings bucks the ongoing boom among lenders in Africa's biggest economy, where a weakening in the value of the naira by approximately 40 per cent in June alone is helping banks that have loans denominated in foreign currency turn in record profits.

The new development even enabled some banks to declare higher dividends.

The Asset Management Corporation of Nigeria (AMCON) is Unity Bank's foremost shareholder, holding 34.2 per cent of the bank's ordinary shares.

Unity Bank's foreign exchange revaluation loss for the period stood at N35.4 billion, according to the bank's financials, compared to N16.2 million a year earlier.

No clarification is provided anywhere in the document as to what made up that sum.

The financials showed N8.9 billion in long-term loans from the African Export-Import Bank after conversion from the US dollar.

"In the light of the prevailing FX revaluation in the financial system, what we have is a market-driven impact which is adjustable envisaged from the positive economic outcomes of the government policies in the near term," CEO Tomi Somefun said in a separate statement.

"The negative shareholders' fund has improved considerably through the injection of N135 billion which moderated the negative shareholders' fund from (-ve) N275 billion in December 2022 financial year-end to (-ve) N178 billion as at the end of June 2023, after absorbing the FX revaluation loss suffered in Q2/2023," she added.

The lender drew N135.2 billion in the form of convertible debentures from its other reserves to pare down the negative balance of its shareholders' fund by 35 per cent.

Revenue for the period saw a flattish growth as gross earnings climbed to N27.8 billion from N27.6 billion.

Net interest income, a key profitability metric, fell 23 per cent to N7.9 billion, strained by a weaker interest income and an increased interest expense.

Adding pressure to the bottom line, operating expenses leapt 16 per cent to N15.3 billion driven by a significant jump in personnel expenses.

According to the balance sheet, its total liabilities of N688.8 billion exceeded its total assets by 35.1 per cent.

Mrs Somefun hinted at plans by the bank to complete its recapitalisation programme soon, saying it will enable the financial institution to "do business as expected in the fast-growing markets in Nigeria."

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