Unity Bank predicts negative performance for Q1 2024

UNITY Bank Plc has forecast a negative performance for the first quarter (Q1) of 2024 amid plans to shake off and completely reverse opposing financial positions.

The bank proposed this in its earnings forecast statement for Q1 2024, released to the investing public on Tuesday, December 12.

According to the statement, the bank proposed a loss after tax of N8.49 billion, a pre-tax loss of N7.83 billion, and negative operating expenses of N7.404 billion as it anticipated positive gross earnings of N21.56 billion.

The bank also projected a negative net cash flow from operating and investing activities at N271.19 billion.

It put the net cash to be used in financing activities at N262.69 billion while anticipating N6.84 billion in cash and cash equivalents at the end of the period (Q1 2024).

Negative cash flow from investing activities can be challenging for any company, as it could be a warning sign that the company’s management is not efficiently using its assets to generate revenue or a positive sign that the management is positioning the company for future growth, according to Investopedia, a research platform.

Similarly, posting harmful operating activities on its cash flow will mean the company’s receivables are less than its payables, while financing activities indicate that the company is indeed servicing debts.

In September, The ICIR reported that Unity Bank showed signs of financial distress as its total liabilities were higher than its total assets, a concern financial analysts said could not only mean the bank would default on its obligations to creditors but could also mean it was headed for bankruptcy.

In its nine-month financial statements, Unity Bank posted a loss after tax of N47.92 billion, a pre-tax loss of N47.73 billion, and a growth of N38.18 billion gross profit.



    This shows that while its gross profit will rise, loss after tax and pre-tax loss will decline as the bank is expected to be more prudent in managing its debt obligations.

    According to Unity Bank’s Managing Director/Chief Executive Officer, Tomi Somefun, the plan to reverse the record negative is focused on the efforts to recapitalise the bank, innovate with products to compete in new markets, drive asset creation, and pursue digital banking innovation.

    “This also means that the bank enjoys market confidence, which will enable the institution to thrive better in the months ahead with increased business conversion, profitability and growth needed to achieve sustainable returns,” she said.

    While Unity Bank had anticipated posting a profit after tax of N135.34 million and pre-tax profit of N147.91 million in Q4 2023, the bank’s Q1 2024 earnings forecast indicates that it will fall back to negative performance, which will continue to raise concern about its financial health.

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