INTRODUCTION

Unity Bank Plc (the “Bank”) is committed to conducting its business in accordance with applicable laws, rules and regulations, and the highest standards of business ethics and international best practices. This Related Party Transaction Policy (the “Policy”) reflects the business practices and principles of behavior that support this commitment. This Policy applies to transactions between the Bank and one or more of its Related Parties with a view to ensuring that there is transparency and fairness. This Policy provides a framework for governance and reporting of Related Party Transactions including material transactions. Consequently, the Board of Unity Bank Plc (the “Board”) has adopted this Policy on related party transactions. 

OBJECTIVES

The objective of this Policy is to ensure that transactions between the Bank and its related parties are based on transparency, guidance in the event of conflict of interests in transactions involving related parties, dealings in transactions between the Bank and its related parties based on the CBN Code of Corporate Governance 2014 (the “CBN Code’’), the Nigerian Code of Corporate Governance 2018 (the “NCCG Code”) and any other applicable laws and regulations to Bank’s in relations to Related Party Transactions in Nigeria. 

DEFINITIONS

Related Party Transaction: transactions or arrangements where
i. The Bank is a participant.
 ii. A related party may have direct or indirect material interest.

Related Person/Party:

i. A Directors (Non- Executive and Executives) or his/her relative
ii. Senior Management or his/her relative,
iii. Shareholders with Controlling Power,
 iv. Shareholders with 5% and above,
 v. Immediate Family Members,
 vi. Primary Business Associations/Affiliations which is an entity other than Unity Bank Plc, where a Director or Senior Management Staff owns directly or indirectly at least a 5% equity interest.
 vii. A firm or company in which a director, a senior management staff or his relative is a partner;
 viii. “Ordinary Course of Business” includes but not limited to a term for activities that are necessary, normal, and incidental to the business. These are common practices and customs of 2 commercial transactions. The ordinary course of business covers the usual transactions, customs and practices related to the business. 

COMPLIANCE WITH APPLICABLE LAWS

The Bank shall comply with all applicable laws, rules and regulations, on Related Party Transaction in the Industry. 

APPLICABILITY FOR THE BANK

This policy is applicable for the transactions with the following
 1. Directors,
 2. Senior Management
 3. Relatives of Directors and Senior Management
 4. Other Related Parties.

This Policy shall cover the following transactions with related parties.     
 i. Sale, purchase or supply of any goods or materials.
ii. Selling or otherwise disposing of, or buying, property of any kind
iii.  Leasing of property of any kind.
 iv. Availing or rendering of any services.
 v. Appointment of any agent for purchase or sale of goods, materials, services or property.
vi. Related party’s appointment to any office or place of profit in the company, its subsidiary company or associate company, 
vii.  Underwriting the subscription of any securities or derivatives thereof, of the company.

ARM’S LENGTH TRANSACTION

A transaction with a related party will be considered to be at arm’s length if the major terms, pricing as a whole, are similar with those of comparable transactions if undertaken with unrelated parties. 

NOTIFICATION OF RELATED PARTY TRANSACTIONS

The Bank’s Directors and Senior Management Staff have the responsibility of bringing to the notice of the Board any potential related party transactions. The notice shall provide information on the description of the transaction and any additional information that may be required by the Board. 

APPROVING AUTHORITY FOR RELATED PARTY TRANSACTIONS

1. Where the related party transaction involves a Director, shareholders with 5% and above, senior management Staff or their immediate family valued at an amount exceeding N30,000,000.00 (Thirty Million Naira Only), the Board shall be notified accordingly. 
 2. Where the amount of the transaction is valued at an amount of N30,000,000.00 (Thirty Million Naira Only) or less, the Executive Management Committee (EXCO) shall be notified accordingly.
 3. The EXCO shall on a quarterly basis notify the Board of all related party transaction below the threshold of the Board.   

APPROVAL OF RELATED PARTY TRANSACTIONS

Where there is a related party transaction, the respective stakeholder shall forward a Report/Paper of the proposed transactions to the Company Secretariat with adequate details for the consideration of the EXCO where the amount of the transaction is N30,000,000.00 (Thirty Million Naira Only) or less and to the Board Risk Management & Audit Committee where the amount exceeds N30,000,000.00 (Thirty Million Naira Only) before the Board will approve the transaction. All identified related party transactions shall be approved before the Bank will enter into the transaction. All interest or potential interest in any related party transaction by a member of EXCO or the Board shall be declared and the party shall abstain from discussion and voting on the approval of the related party transaction.

GENERAL CRITERIA FOR APPROVING RELATED PARTY TRANSACTIONS

In determining whether to approve, ratify, disapprove or reject a Related Party Transaction, the EXCO or the Board Risk Management & Audit Committee, as appropriate, shall take into account, among other factors it deems appropriate, whether the Related Party Transaction is entered into on terms no less favorable to the Company than terms generally available to an unaffiliated third-party under the same or similar circumstances; the results of an appraisal, if any; whether there was a bidding process and the results thereof; review of the valuation methodology used and alternative approaches to valuation of the transaction; and the extent of the Related Person’s interest in the transaction. The EXCO or the Board Risk Management & Audit Committee will review the following information when assessing a Related Party Transaction:

o The terms of such transaction;
 o The Related Person’s interest in the transaction;
 o The purpose and timing of the transaction;
 o Whether the Company is a party to the transaction, and if not, the nature of the Company’s participation in the transaction;
 o If the transaction involves the sale of an asset, a description of the asset, including date acquired and costs basis;
o Information concerning potential counterparties in the transaction;
 o The value of the transaction and the value of the Related Person’s interest in the transaction;
 o Description of any provisions or limitations imposed as a result of entering into the proposed transaction;
 o Whether the proposed transaction includes any potential reputational risk, environmental and social risk issues that may arise as a result of or in connection with the proposed transaction; and
 o Any other relevant information regarding the transaction. 

RELATED PARTY TRANSACTIONS NOT APPROVED UNDER THIS POLICY

Where EXCO or the Board becomes aware of a related party transaction that has been consummated without prior approval, the transaction shall be reviewed and may be ratified, revised or terminated by the appropriate organ accordingly.

REGISTER AND RECORD OF RELATED PARTY TRANSACTIONS

The Bank shall maintain a register of all related party transaction. The register shall be kept at the registered office of the Bank.  

REVIEW, AMENDMENT AND MODIFICATION

The Related Party Transaction Policy shall be reviewed periodically (at least once in every three years (3) years by the Board of Directors as they may deem fit, to reflect current best practices in Corporate Governance.