THE NDIC 2012 ANNUAL REPORT & STATEMENT OF ACCOUNTS
The Nigeria Deposit Insurance Corporation (NDIC) is pleased to announce its 2012 Annual Report & Statement of Accounts. The report contains the main activities and achievements of the Corporation in 2012. Some of the activities and achievements in the report included the following:
2.0 The NDIC continued to pay depositors of banks-in-liquidation during the year under review. In that regard, the Corporation had paid a cumulative sum of ₦6.82 billion to 528,212 insured depositors of closed banks by December 31, 2012 as against ₦6.68 billion paid to 527,942 insured depositors as at December 31, 2011. That feat was achieved in spite of the long closure of the banks and the unwillingness of many depositors to file for their claims. Similarly, a total sum of N2.505 billion was paid to 75,322 verified depositors of 95 out of 103 closed MFBs during the year as against the sum of ₦2.249 billion paid to 72,062 verified depositors in 2011. Also, the sum of N73.58 billion had been paid as liquidation dividend to 250,209 depositors of DMBs as at December 31, 2012. It is pertinent to indicate that a total of fourteen (14) out of the thirty-four (34) banks-in-liquidation prior to 2006 had declared a final dividend of 100% of their total deposits, indicating that all depositors of the affected closed banks had fully recovered their deposits.
3.0 The NDIC, in collaboration with the Central Bank of Nigeria (CBN), conducted Risk-Based Examination of sixteen (16) deposit money banks (DMBs) during the year. The NDIC led the examination of six (6) of the banks while the CBN led in ten (10). Furthermore, the two institutions conducted a maiden examination of the three (3) banks acquired by AMCON, namely: Keystone Bank, Mainstreet Bank and Enterprise Bank during the year. While the CBN led the examination of Mainstreet Bank and Enterprise Bank, NDIC led the examination of Keystone Bank. The Corporation in collaboration with the CBN also conducted the maiden examination of Jaiz Bank Plc and the Stanbic-IBTC Non-Interest window during the year under review.
4.0 The NDIC in 2012 conducted routine examination of 246 microfinance banks (MFBs) out of which six (6) were found to have closed shop. The NDIC also conducted risk-based examination of forty (40) primary mortgage banks (PMBs) in 2012 out of which three (3) were found to have voluntarily closed shop.
5.0 With regard to bank performance, the banking industry recorded significant improvement in its financial condition and performance in 2012 as revealed by all major financial indicators compared to the previous year. For instance, the banking industry’s total assets grew from N21.89 trillion in 2011 to N24.58 trillion in 2012 (or 10.91%). Out of the total industry’s assets of N24.58 trillion, total loans and advances stood at N8.15 trillion, representing over 33% (or one-third) of total assets. Of the banking industry total loans, the sum of N4.48 trillion (or 54.97%) was extended to the real sector of the economy in 2012 as against N3.88 trillion (or 53.37%) and N3.51 trillion (or 48.95%) in 2011 and 2010, respectively. Of particular note was the rising trend in the banking industry’s credits to the Agricultural Sector which stood at 3.60% of total loans and advances in 2012 compared to 2.15% and 3.11% recorded in 2010 and 2011, respectively.
6.0 Furthermore, the banking industry was adequately capitalised in the year under review with capital adequacy ratio of 18.07% compared to 17.71% recorded in 2011. All the DMBs also met the minimum liquidity threshold of 30%. The asset quality significantly improved during the year as the ratio of non-performing loans to total loans decreased from 4.95% in 2011 to 3.51% in 2012. The improvement in the banking industry’s asset quality was due to the purchase of the non-performing loans of DMBs by AMCON and the enhanced credit risk management by DMBs. The overall effect was an improvement in the industry’s profit before tax which increased from a loss of ₦6.71 billion in 2011 to a profit of ₦525.34 billion in 2012.
7.0 In terms of level of soundness, ten (10) banks were rated sound, nine (9) satisfactory and only one (1) bank was rated marginal. Thus, the industry could be considered to be relatively stable in 2012. There was no unsound bank in the banking industry as at 31st December, 2012.
8.0 The DMBs reported 3,380 fraud cases involving the sum of ₦17.97 billion with expected/contingent loss of about ₦4.52 billion in 2012. The expected/contingent loss had increased by ₦455 million (10.9%) as against ₦4.072 billion reported in 2011. Notwithstanding the 43.7% increase in the number of reported fraud cases from 2,352 in 2011 to 3,380 in 2012, the amount involved decreased by 36.4% from ₦28.40 billion in 2011 to ₦18.04 billion in 2012.
9.0 In the year under review, the licences of twenty-four (24) PMBs which had hitherto closed shop and were unable to meet obligations to their depositors and creditors were revoked by the CBN and NDIC was subsequently appointed as liquidator.
10.0 As at December 2012, 310 out of the 323 MFBs that rendered returns had met the minimum paid-up capital of ₦20 million. A total of 302 MFBs had capital adequacy ratio of more than 10%. The remaining 555 did not render returns and that situation continued to be a source of concern to NDIC as it was impossible to assess their financial condition and performance on a continuous basis during the year under review.
11.0 Under its Corporate Social Responsibility, the NDIC assisted five (5) higher institutions of learning across the nation to the tune of N99.93 million on various projects in Imo, Delta, Kebbi, Enugu and Kano States.
12.0 From the foregoing, it can be observed that the Corporation continued to discharge its mandate of payment guarantee, supervision, failure resolution and liquidation in an effective and efficient manner during the year under review. The achievements attained in 2012 were due to many factors, which included the deployment of a robust performance management system, enhancement of the enterprise risk management system as well as enhanced capacity building in risk-based supervision (RBS) and other areas of operations, amongst others. In addition, the Corporation continued to partner effectively with all key stakeholders, particularly members of the Financial Services Regulation Coordinating Committee (FSRCC). Finally, the commitment and dedication of the Board, Management and staff of the Corporation had played a significant role in the achievements recorded in 2012.
August 20, 2013.