In his remarks, Yemi Adeola, the Managing Director/ Chief Executive, stated:
2016 was a difficult year for the Nigerian economy as it was characterized by high inflation, weak oil prices, lower crude oil output and foreign exchange supply shortages. These multiple challenges and the various regulatory responses put significant downward pressure on the earnings of banks.
In the face of these difficulties, our gross earnings grew for the 6th consecutive year to N111.4 billion. We also maintained our commitment to operating efficiency, as highlighted by an improvement in net interest margin to 9.3% and a 22.5% growth in interest income. In addition, we successfully limited the growth in operating expenses to 1.9% despite the high inflationary environment.
During the year, we successfully deployed the “best in class” core banking application – Temenos T24; grew our active customer base; and launched the disruptive, award-winning payments solution, ChatPay, even as we optimized our traditional electronic channel offerings. These initiatives will enable the Bank to optimize operating efficiency and position itself to exploit emerging business opportunities.
• Net Interest Income increased by 41.6% to N56.0 billion (FY 2015: N39.5 billion) on account of a 22.5% increase in interest income and a 4.2% increase in interest expense;
• Net Operating Income of N56.6 billion (FY 2015: N60.7 billion) deepened by impairment charges;
• Operating Expenses of N50.6 billion (FY 2015: N49.7 billion) driven by our strategic cost control measures in response to inflationary pressures.
• Profit Before Tax stood at N6.0 billion, while Profit After Tax was N5.2 billion.
• Net Loans & Advances increased by 38.2% to N468.2 billion (Dec. 2015: N338.7 billion) driven primarily by foreign exchange revaluation;
• Customer Deposits decreased marginally by 1.0% to N584.7 billion (Dec. 2015: N590.9 billion);
• Total Assets(excluding contingent liabilities) increased by 4.3% to N834.2 billion (Dec. 2015: N799.5 billion);
• Overall, Shareholders’ Funds closed at N85.7 billion arising from fair value adjustments on Available-For-Sale investments and organic accretion of profit.
|Indicator||FY 2016||FY 2015|
|Pre Tax Return on Average Equity||6.6%||12.2%|
|Post Tax Return on Average Equity||5.7%||11.4%|
|Return on Average Assets||0.7%||1.4%|
|Earnings per Share||18k||36k|
|Yield on Earning Assets||15.6%||13.8%|
|Cost of Funds||6.3%||6.1%|
|Net Interest Margin||9.3%||7.7%|
|Non-Performing Loan Ratio||9.9%||4.8%|
|Capital Adequacy Ratio (Basel 2)||11.2%||17.5%|
|Loan to Deposit Ratio (Net)||80.1%||57.3%|
Commenting on the outlook for the Bank under its 2017- 21 Strategic Plan, Mr. Adeola said:
We expect that the Government’s fiscal intervention schemes alongside supportive economic policies will create pathways for economic recovery. Over the next 5 years, we will be steering our ship differently and aggressively growing the retail business through electronic channels. To achieve this, we will:
– Prioritize efficiency over scale with the goal of achieving steady growth and sustainable returns to all our stakeholders;
– Optimize our cost profile while providing our customers with ‘best in class’ service;
– Bolster innovative banking driven by market insights that will enable us to satisfactorily serve our customers and earn their trust;
– Implement significant investment in technology-led growth initiatives;
– Accelerate the remarkable growth of our Non-Interest Banking Segment.
M: +234 803 406 6104
Investor Relations Team