Investors Relations

Chairman's Statement

1.0         INTRODUCTION:

Fellow shareholders, invited guests, distinguished ladies and gentlemen. It is my honour and privilege to welcome you to the 15th Annual General Meeting of your bank and to present to you the Audited Financial Statements for the year ended 31st December, 2013 and 31st December, 2014.

I convey the sincere apologies of the Board of Directors for the delay in the presentation of the audited accounts which was attributed to external factors beyond our control.


While it is broadly accepted that the overall economic and business climate was positive in 2013, I wish to highlight the key developments which were conducive to growth.

The Nigerian economy proved to be resilient in 2013 as Gross Domestic Product (GDP) growth rate was 6.77% driven largely by agricultural production and general commerce. The rate of annual inflation was 7.9% at the end of the year, while the local currency depreciated marginally by 2.6% against the US dollar to close at N160.30, as compared with N156.15 in the previous year.

Foreign exchange reserves were fairly stable over the year, closing at USD 42.80 billion. Oil production fell slightly but crude oil prices were fairly stable with the benchmark Brent price closing the year at USD 110.80 per barrel, compared with USD 111.90 per barrel a year earlier. However, the Excess Crude Account was drawn down from almost USD 11.00 billion at the beginning of the year to USD 2.5 billion by year end.

In the microfinance sub-sector, the Central Bank of Nigeria commenced the enforcement of the re-capitalization policy following the introduction of the revised Microfinance Regulatory/Supervisory Framework which categorized banks into Unit, State and National MFBs with capital requirements of N20million, N100million and N2billion respectively.


During the period under review, macro-economic variables were relatively stable in the first three quarters. However, the last quarter of the year witnessed some volatility, following the devaluation of the Naira exchange rate from N155/USD to N168/USD at the official window in November 2014. The price of Brent Crude Oil dropped by about 60% from the peak of USD 115.00 per barrel in June 2014 to about USD 46.00. Foreign reserves declined by 20.96% to close the year at USD 34.46 billion due to the drop in oil prices.

After a year of over 6% growth, the Gross Domestic Product (GDP) growth rate dropped to 5.94% in December 2014. Despite the deterioration of other major economic indices, inflation remained in single digit averaging 8% in quarter four of 2014.

In the regulatory environment, the Monetary Policy Rate (MPR) increased by 100 basis point from 12% to 13%. Cash Reserve Ratio (CRR) on public sector deposits remained constant at 75% while the CRR on private sector deposits was increased from 15% to 20%.

Central Bank of Nigeria commenced the disbursement of the Micro, Small and Medium Enterprise Development Fund (MSMEDF) that would enhance access to credit for small businesses, drive economic growth, create employment opportunities and alleviate poverty.

Overall, the year was mainly defined by fluctuation in oil prices, foreign exchange rate uncertainty, build-up of political activities and security challenges, especially in the north eastern parts of the country.



In 2013, the financial performance was mixed due to challenges in the operating environment and increased competition by operators in the industry.

Gross earnings rose from N97.14million in 2012 to N104.69 million, representing a growth rate of 7.77%. This was driven by interest income derived from the significant increase in our loan books. Profit Before Tax (PBT) recorded impressive performance from N2.30million in the preceding year to N10.26million in 2013, or 346.09% growth rate. Similarly, Profit After Tax (PAT) also grew from N1.64million in 2012 to N9.52million in 2013, representing a positive variance of 480.49%. This exceptional result was achieved despite the special provision of N4.23million for non-performing loans by the Central Bank of Nigeria.

Loans and Advances increased modestly by 38.54% to N164.12million in 2013 as compared to N118.46million in the previous year. This was as a result of our deliberate policy to grow our loan books with a ripple effect on our bottom line.

Total assets however decreased from N371.90million in 2012 to N311.94million in 2013 due to the write-off of Other Known Losses from our books, having fully provided for them in the previous years. Deposit liabilities also dropped by 47.83% to N155.38million in 2013 from N297.81million in 2012 and this could be attributed to massive withdrawals by our customers and delay in payment of salaries to the Bank’s customers.


The outlook was largely subdued in 2014 as economic indicators were markedly different as a result of the falling oil prices in the second half of the year.

Gross earnings grew marginally from N104.69million in 2013 to N107.75million, representing an increase of 2.92%. Profit Before Tax (PBT) however decreased marginally by 13.16% from N10.26million in 2013 to N8.91million in 2014, due to high operating cost. Profit After Tax (PAT) also dropped slightly from N9.52million in 2013 to N8.28million in 2014, or 13.03%.

Similarly, Loans and Advances contracted from N164.12million in 2013 to N147.26million representing a negative variance of 10.27%. This was due to temporary embargo on lending as a result of increase in non-performing loans, arising from the delay in remittance of loan deductions by the employers of some of the bank’s customers.

Total assets however increased by 18.36% from N311.94 in 2013 to N369.20million in 2014 while total deposits recorded appreciable growth from N155.38million to N219.65million or 41.36% as a result of the aggressive deposit mobilization strategy.


The bank is determined to create wealth for our shareholders. Although we have attained a sustainable level of profitability, the declaration of dividend will be deferred until all accumulated operational losses are completely written-off in line with the policy of Central Bank of Nigeria. It would be recalled that erosion in our shareholders’ fund was caused by past mis-management. However, we are optimistic that with the present positive trend of performance, the adverse position will be normalized in the next couple of years before the payment of dividend will commence.


Our employees constitute the most valuable assets of the bank. Consequently, the bank will continue to place high premium on manpower development and capacity building of its staff. Furthermore, staff welfare will be accorded adequate attention to ensure that they are well motivated for increased productivity.


The bank has proved to be financially stable and resilient despite the setback it suffered in the past. The growth momentum is focused on the deployment of modern technology to drive our operations and the migration to e-payment platform for wider reach in our service delivery and enhance access to our customers. Entrepreneurship development and support for small businesses will be pursued vigorously as part of our financial inclusion strategy.


I wish to use this opportunity to express my profound gratitude to all the shareholders for your support and faith in the bank. I thank my colleagues on the Board for their commitment and high sense of responsibility in performing the oversight functions. I also want to commend the management and staff of the bank for their hard work and dedication to duty. Finally, our valued customers deserve a special appreciation for their loyalty and continued patronage.

Thank you and God bless you.



15th Annual General Meeting Photo Gallery