the liquidated Heritage Bank and CBN-administered Polaris Bank (before their balance sheet readjustments), said these banks were all on life support, with their clearing house positions underwritten by a technical arrangement between tier 1 banks (especially First Bank of Nigeria) and the banking sector regulator.
In the eight years between 2016 and 2023, Somefun has been able to combat operational and domestic economic headwinds. Nevertheless, compound annual gross earnings growth (CAGR) fell by -91.17%, profit before tax dropped by -528.2%, loans and advances shrank by 89.99%, and customer deposits slipped by -80.34%. Somefun has run Unity Bank with great integrity, by the estimation of her peers, but, unfortunately, this has not translated into high-flying operating performances. Apparently, banking success requires more than personal discipline and brilliance.
Passing the Baton
Unity Bank Plc has evolved through different leadership philosophies, attempting to resolve complex structural and operational issues. Starting from Ado Yakubu Wanka in 2012 to Henry James Semenitari in 2014, the baton was finally passed to Oluwatomi Somefun in August 2015, leading to a regulatory 10-year tenure completion by August 2025. Her tenure can be summarised as a journey in seeking sustainable solutions to a fragile money lender’s prevailing structural challenges leveraging government support and technological integration, passing the baton of leadership in a deserved retirement lease mixed feelings, as the bank appears to be at the cusp of a new phase that could totally redefine the institution, and set the foundation for true competitive sustainability, symbolising Somefun’s pet organisational purpose that kept her awake many nights. Nevertheless, with the recapitalisation efforts she had initiated with her executive management team and with a merger with Providus Bank, the new emerging entity should see brighter days ahead (see Illustration 1 below).
Somefun took over the bank in 2015, making audacious board-approved decisions by disposing of the bank’s large delinquent loan book to the Asset Management Corporation of Nigeria (AMCON) in 2017. The disposal of toxic loan assets came with consequences, as the bank’s loan portfolio shrunk to N8.96bn, shareholders' equity and profitability turned negative, and the lenders operating fortunes `took a notable hit. These represented the pains of institutional correction. The bank became highly restrained in loan creation, dragging interest income and gross earnings down between 2018 and 2020 before a reversal occurred within a high-interest rate environment in 2022, leading to a mild profit and loss (P&L) recovery. Somefun faced some difficulties running a bank with a heavily negative equity base from 2017 to 2023, resulting in a bail-out plan (debenture) to reduce the size of the balance sheet gap, as she tackled higher liquidity risks and a Nigeria Exchange Limited (NGX) trading suspension due to delayed publication of financial statements (see Chart 1 below).
Valuing a Bank’s Transition
The bank’s fragile financial position weighed on its market value, elbowing its share price into a persistent offer(or sell) position between 2015 and 2022 as investors inevitably went short on its equity. The modest decline in negative shareholder funds and the proposed N700bn financial accommodation by the CBN has reawakened positive investor sentiments, as the bank’s share price rose to N3.50k in 2023 and 2024. However, the rally ended late last year due to the delayed publication of the bank’s financial statement, which resulted in a technical suspension on July 08, 2024 (see Chart 2 below).
Chart 2:
Closing Thoughts:
Unity Bank held its Annual General Meeting today, Wednesday, March 19, 2025, with the announcement of the retirement of one of its longest-serving CEOs, Mrs Tomi Somefun. Furthermore, at the same board meeting, Mr Ebenezer Kolawole, the bank’s immediate past Chief Financial Officer (CFO), was appointed to serve as acting Managing Director. Ebenezer is expected to complete the Tomi-led merger and recapitalisation process with Providus Bank and support the new bank’s fiscal and technical midwifery.
Proshare analysts note that Mergers are complex creatures, and only a few institutions have succeeded in carrying them out smoothly and professionally. Banks like Access Bank Plc have almost made Mergers and inorganic corporate expansion an art form. Unity Bank may need to rip a few tips and tricks from the Access Bank M&A playbook.
Somefun is leaving Unity Bank in a potentially better state than she met it in. Still, a lot will depend on how her successors learn the lessons of running a bank with thin equity and transitioning to a bank with competitively large equity supported by robust shareholder vision, vigour, and value. The new bank should remember its humble beginnings but should not be imprisoned by it. The Somefun years provided exceptional operational hindsight and insight, but the new bank management must resolve to acquire foresight and separate themselves from the motley banking crowd
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