The Nation Newspaper

Tag: Nigeria Deposit Insurance Corporation (NDIC)

  • NDIC charges Jaiz bank to uphold good corporate governance 

    NDIC charges Jaiz bank to uphold good corporate governance 

    The Management of Jaiz Bank Plc has been advised to strengthen its corporate governance in order to weather the storm of economic challenges that is currently facing Nigeria’s banking industry.

    A statement from the Nigeria Deposit Insurance Corporation (NDIC), said the Corporation’s MD/CE Alhaji Umaru Ibrahim gave the advice during a courtesy call by the newly appointed Managing Director of Jaiz Bank Plc, Mallam Hassan Usman and some of his top Management staff.

    Alhaji Ibrahim said that good corporate governance was very crucial to the bank at a time of planning to expand its operations following its recent issuance of a National banking licence by the Central Bank of Nigeria (CBN).

    The NDIC boss also advised Jaiz bank to be careful in its expansion plans in order to ensure seamless service delivery to its customers. According to him, “as a pioneer in non-interest banking, the bank should partner with its peers such as Stanbic IBTC and Sterling banks which have non-interest banking windows in order to explore more sharia compliant instruments.”

    He also drew the attention of Jaiz bank to the interest being shown by muslims and non-muslims to its banking products and advised the bank to step up its public enlightenment efforts on the benefits of its products and services in order to increase deposits’ mobilisation.

    The NDIC boss also noted the challenges being faced by the bank in investing its excess liquidity due to the absence of sharia compliant investment windows, such as the “Sukuk” (project financing) and other Islamic bonds and portfolios. He noted that “while a lot of countries had tapped into the “Sukuk” investment window, Nigeria was still lagging behind in exploring such shari’a compliant investment opportunities.”

    He therefore urged the Jaiz Bank’s Management to collaborate with the Bankers’ Committee, Securities and Exchange Commission (SEC), Debt Management Office (DMO) and other relevant agencies toward the introduction of “sukuk” and other shari’a compliant investment products in order to be competitive.

    Alhaji Ibrahim also appealed to the management of Jaiz bank on the need to reduce the phenomenon of staff casualization in the banking sector. He said Jaiz Bank as a relatively young institution should avoid hiring temporary staff in view of its negative consequences on banks operations.

    In his response, the MD Jaiz Bank Plc, Mallam Hassan Usman assured the MD NDIC that Jaiz bank had established and maintained high standards of corporate governance that were driven by checks and balances to ensure that insider credits were not only performing but also kept within the approved regulatory limits.

    Mallam Usman emphasized that apart from the bank’s board oversight, its Advisory Committee of Experts (ACE), also looked into every aspect of the bank’s operations and transactions to ensure compliance with financial regulations and Islamic principles.

    In terms of the challenges of investing the bank’s excess liquidity, he informed the Corporation that the bank had made submissions to the Debt Management Office (DMO) and the Federal Ministry of Finance in order to expedite the process of developing sharia compliant investment instruments in Nigeria.

    On casualization, the Jaiz Bank MD said the bank was not unmindful of the negative consequences of the trend. He disclosed that majority of its five hundred workforce were permanent staff, adding that the bank only out sourced a few aspects of its workforce such as security staff and cleaners to enable it concentrate on its core operations.

     

  • Bank fraud Increase by 15.71 percent – NDIC

    Bank fraud Increase by 15.71 percent – NDIC

    Fraud cases in the banking sector increased by 15.71% in 2015 the Nigeria Deposit Insurance Corporation (NDIC) has stated in its annual report.

    According to the NDIC, “a total of 12,279 fraud cases were reported, representing an increase of15.71% over the 10,612 fraud cases reported in 2014. However, the amount involved decreased significantly by N7.59 billion or 29.63% from N25.608 billion in 2014 to N18.021 billion in 2015.”

    Similarly, “the actual loss suffered by the insured banks decreased by N3.02 billion or 48.79% from N6.19 billion in 2014 to N3.17 billion in 2015.”

    The report noted that the actual loss sustained in respect of internet banking fraud was N857 million, representing 27% of total actual loss of the industry.

    The NDIC lamented that “there was an increase in the frequency of ATM/Card-Related Fraud cases from 7,181 in 2014 to 8,039 in 2015, an increase of 11.95%.  However, the loss suffered by the industry due to such frauds declined significantly by 59.4% from previous year figure of ₦1.242 billion to ₦0.504 billion, representing 15.9% of total industry loss to frauds and forgeries.”

    Out of the 12,279 fraud cases reported by the Deposit Money Banks (DMBs), 425 cases were attributed to staff. The number of fraud cases perpetrated by staff had decreased from 465 in 2014 to 425 in 2015. Similarly, losses arising therefrom substantially decreased by 70% from N3.165 billion in 2014 to ₦0.979 billion in 2015. The highest percentage of frauds and forgeries cases of 38.59% was perpetrated by temporary staff.

    With regards to the financial condition of DMBs, the NDIC report said the banking industry total assets grew marginally by 1.36%, with total loans and advances rising by 5.56%, shareholders’ funds unimpaired by losses increased by 14.02% while capital adequacy ratio stood at 17.66%.

    However, total deposit liabilities declined by 2.83%, while unaudited profits decreased by 2.02% and non-performing loans increased by 82.87% in 2015.

    The annual report added that the banking industry capital base remained strong giving that the capital adequacy ratio (CAR) of the banking industry was 17.66% in 2015 compared with 15.92% in 2014.

    This, the NDIC said exceeded the minimum threshold of 10% and 15% for national and international banks respectively.

    Two DMBs which the NDIC did not name had CAR below the prescribed threshold of 10% in 2015.

    The report said total loans and advances to the Nigerian economy stood at ₦13.33 trillion in 2015, showing an increase of 5.56% over the ₦12.63 trillion reported in 2014, while non-performing loans to total loans ratio for the industry increased from 2.81% in 2014 to 4.87% in 2015, but was within the regulatory threshold of 5%.

    The banking industry was said to have operated profitably in 2015, “though earnings and profitability deteriorated. The unaudited profit-before-tax (PBT) of the banking industry stood at ₦588.86 billion as at 31st December, 2015 representing a decrease of 2.02% over ₦601.02 billion reported as at 31stDecember, 2014″ the report said.

    The banking industry’s liquidity position was strong as its average liquidity ratio rose slightly from 53.65% in 2014 to 58.18% in 2015. All the individual DMBs had liquidity ratios above the prudential minimum threshold of 30% as at 31st December, 2015. Overall, the banking industries remained stable and sound during the period under review.

    Reporting on the Corporation’s activities in 2015, the NDIC said it complied with the provisions of the Fiscal Responsibility Act in 2015 and remitted the sum of ₦24,185,762,000 to the Consolidated Revenue Fund of the Federation in 2015 as against N15.38 billion in the previous year.

    The NDIC’s operating surplus for 2015 it said stood at N30.23 billion as against N15.52 billion in 2014.

    The cumulative amount of loans recovered over the years the NDIC said stood at N27.41 billion as at 31st December, 2015 compared with N26.75 billion as at 31st December, 2014.

    Similarly, the cumulative risk assets recovered from closed Micro Finance Banks (MFBs) amounted to N125.61 million as at 31st December, 2015 compared with N124.38 million as at 31stDecember, 2014 while the debt recoveries from the debtors of Primary Mortgage Banks (PMBs) in-liquidation amounted to ₦24.73 million as at 31st December, 2015.

    During the year under review, the NDIC also paid ₦2.41 billion as total liquidation dividends to 550 shareholders of six DMBs-in-liquidation as at 31st December, 2015 as against N2.03 billion paid to 453 shareholders of DMBs-in-liquidation as at 31st December, 2014.

    Regarding payments to clients of failed banking institutions in the country, the NDIC report revealed that the corporation made a cumulative payment of ₦6.796 billion to 426,324 insured depositors of the closed DMBs as at 31st December, 2015 as against ₦6.795 billion to 426,320 insured depositors in 2014.

    The NDIC also made a cumulative payment of ₦2.86 billion to 81,328 depositors of the closed MFBs as at 31st December, 2015 as against N2.77 billion paid to 80,178 depositors in 2014. Also, the NDIC made a cumulative payment of N45.05 million to 595 depositors of closed PMBs as at 31st December, 2015 as against N2.02 million paid to 30 depositors in 2014.

    The sum of N95.77 billion was paid as liquidation dividend to depositors of DMBs in 2015 compared to N94.74 billion as at December 31, 2014. That amount included the uninsured portion of private sector depositors of 11 out of the 13 banks closed post-bank consolidation which was funded by the CBN.

    Similarly, the NDIC paid liquidation dividends to creditors of DMBs-in-liquidation in 2015 while the sum of N1,728.40 million was declared as dividends to 1,308 creditors of the ten DMBs. Out of that amount, the NDIC paid the sum of N1,261.73 million to the 965creditors who filed their claims as at 31st December, 2015 as against N1,247.77 million paid to the 889 creditors as at 31st December, 2014.

     

  • Banking industry remains strong, sound – NDIC Report

    Banking industry remains strong, sound – NDIC Report

    The Nigeria Deposit Insurance Corporation (NDIC) on Tuesday said that the nation’s banking industry remained strong and sound.

    The NDIC made this known in its 2015 Annual Report which was obtained by the News Agency of Nigeria (NAN) in Lagos.

    The document said that the banking industry’s total assets grew marginally by 1.36 per cent, while total loans and advances rose by 5.56 per cent.

    It said that shareholder’s funds, unimpaired by losses, increased by 14.02 per cent, while capital adequacy ratio stood at 17.66 per cent.

    The document, however, noted that total deposit liabilities declined by 2.83 per cent, while unaudited profits decreased by 2.02 per cent.

    In the period under review, the document showed that non-performing loans increased by 82.87 per cent.

    According to the document, the banking industry’s capital base remains strong.

    “The Capital Adequacy Ratio (CAR) of the industry was 17.66 per cent in 2015, compared with 15.92 per cent in 2014, but exceeded the minimum threshold of 10 per cent and 15 per cent for national and international banks, respectively.

    “ Two DMBs had CAR below the prescribed threshold of 10 per cent in 2015,’’ the report said.

    On the economy, the report said that the total loans and advances to the Nigerian economy stood at ₦13.33 trillion in 2015, showing an increase of 5.56 per cent over the ₦12.63 trillion reported in 2014.

    “The non-performing loans to total loans ratio for the industry increased from 2.81 per cent in 2014 to 4.87 per cent in 2015, but was within the regulatory threshold of 5 per cent,’’ the report said.

    The document said that in 2015, the banking industry operated profitably, though earnings and profitability deteriorated.

    It said that the unaudited Profit-Before-Tax (PBT) of the banking industry stood at ₦588.86 billion as at Dec. 31, 2015, representing a decrease of 2.02 per cent over the ₦601.02 billion reported as at Dec. 31, 2014.

    The document noted that the industry’s liquidity position was strong as its average liquidity ratio rose slightly from 53.65 per cent in 2014 to 58.18 per cent in 2015.
    “All the individual DMBs have liquidity ratios above the prudential minimum threshold of 30 per cent, as at Dec. 31, 2015,’’ the reports also said.