By Providence Emmanuel

NPF Microfinance Bank (MfB) Plc has recorded 69 percent decline in its Profit After Tax, PAT, which fell to N195.7 million in financial year ended 2018 from N631.89 million recorded in 2017.

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Speaking at the 25th Annual General Meeting, AGM, held in Akwa Ibom State, Managing Director/ Chief Executive, NPF MfB Plc, Mr. Akinwunmi Lawal, said that the drop in profit was occasioned by a fraud of N266.5 million and an initial impact of International Financial Reporting Standard, IFRS 9, which took effect in the accounting year under review.

Lawal said that the fraud has been reported to the regulators and the law enforcement agencies, explaining that a total of N35.5 million has so far been recovered while the balance is still being pursued through all legal means.

He stated: “We are thus confident of recovering the money which has been fully provided for in the financial statements. Let me also add that it is normal to have an initial significant impact on an organisation’s financials with the implementation of IFRS 9.

“Subsequently we are sure that the effect in the following year will not be as impactful as this. The IFRS 9 Expected Loss Model replaces the IAS 39 incurred loss model which terminated last year December 31, 2017 by regulations.

“We have immediately commenced the training of our staff on the methodology of the IFRS 9 model with a view to fortifying ourselves on the rudiment of the new regime to be better able to carry out valuation of our financial assets.”

He further said that despite the year’s performance, the bank recommended a dividend of N114.332 million which translates to five kobo per share, in which N81.416 million would be transferred to various reserves as there is a need to conserve money for the future developmental projects.

He, however, said that he is optimistic that the year 2019 would be much better as evidenced in its first and second quarter’s result which is yet to be released. The bank’s total asset increased to N17. 597 billion from N15.952 billion recorded in the previous year, representing 10.31 percent increase. The loans and advances improved by 17.59 percent to N10.593 billion in 2018 from N9.008 billion in 2017.

According to the Lawal, “The deposit liability moved from N9.126 billion to N10.465 billion showing a growth of 14.67percent which indicated the continued growth of our customer’s trust and confidence in our mission. Our borrowing from various intervention funds increased by 34.08 per cent to    N2.078 billion from N1.550 billion and this is accountable for the increase in interest expenses by 34.7 percent.”

Earlier, Chairman, NPF MfB, rtd DIG, Azubuko Udah, said that the year 2018 marked the end of the three years strategy which commenced in 2016, adding that plans for the next three years, from 2019 to 2021 have been put in place to position the bank to new height in the provision of microfinance services.

To propel this strategy, he said that the bank is considering it vital to recapitalize by raising more funds from existing shareholders and inviting new investors to have a stake, adding that the bank would also leverage on technology through alternative banking channels to increase    market share significantly by growing organically, the number of her customers.

Udah said that the bank changed her banking software in the year under review to a new core banking software T24 under the National Association of Microfinance Banks Unified Integration Technology platform (NAMBUIT) of the Central Bank of Nigeria, CBN.

The NAMBUIT project is a tripartite partnership involving CBN, Inlaks (the service provider) and the NAMB with the aim to deploy a single core and agent banking solution for microfinance banks in Nigeria. The project is to spur significant growth in the microfinance sector by improving access to accurate, timely operational and financial reports. Udah disclosed that NPF MfB was nominated by the CBN for the pilot implementation program on the software by reason of her leading position in the microfinance space, saying: “The deployment of the T24 Core Banking Software was marked with various challenges, significant of which was the late filing of quarterly returns including the audited financial statements to regulatory agencies.”

Vanguard