Unity Bank Gross NPLs of N361bn Considered for Outright Sale

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July 18, 2017/Unity Bank 2016 Annual Financial Statements

Included in loans and advances are gross non-performing loans of N361 billion which have been considered for outright sale & management to an institutional asset management company.

The Bank executed a Transaction Implementation Agreement (TIA) and a Sales and Purchase Agreement (SPA) with the company in December 2016. The initial consideration has also been agreed and the Bank has received a good faith payment which is a percentage of the initial consideration, prior to the conclusion of the audit in February 2017.

However, the transfer of loan rights to the purchaser is expected to be completed by April 2017 after all contractual obligations in the signed agreements has been fulfilled by both parties.

The carrying amount of the non-performing loans would be reclassified to held-for-sale financial assets in the event that the criteria for reclassification are satisfied.

31 December 31 December
2016             2015
N’000 N’000
Loans and advances
Loans and advances to customers by customer type:
Government lending 11,463,555 10,537,355
Corporate lending 172,870,601 163,285,976
Consumer lending 190,740,346 132,618,407
Interest receivable 3,684,098 5,455,809
Gross Loans 378,758,599 311,897,547
Less: Allowance for impairment losses (101,544,079) (65,754,418)
277,214,521 246,143,129
Current 235,815,191 201,855,718
Non-Current 41,399,330 44,287,411
277,214,521 246,143,129

Analysis on the bank’s figures as at December 31, 2016 reveals that the gross NPL of N361bn constitutes about 95% of the bank’s gross loan and 73% of its total assets while the bank’s shareholders’ fund of N83bn as at the period under review constitute 23% of the gross NPLs.

Gross Loans 378,758,599
NPLs 361,000,000.00 95%
Total Assets 492,681,647.00 73%
Total Equity 83,106,980.00 23%

Figures are in N’000