Diamond Bank Gasping for Breath as Key Indices Slide
T
hese are difficult and challenging times for Diamond Bank Plc as major operational indices slide as at the end of 2014 financial year and first quarter of 2015. The downward looking indices include Capital Adequacy Ratio (CAR), Net Interest Margin
(NIM), Profitability, Gross Earnings and Net Margin, while the bank harvested hikes in Cost to Income Ratio (CIR), Cost of Funds (CoF), Operating Expenses and Impairment Charges. According to the bank’s financial performance in the year ended December 31, 2014, the Capital Adequacy Ratio (CAR)
declined to 17.5% from 18.5% in 2013, mainly due to aggressive growth in loan portfolio as against proportionate growth in capital resources. Also, Cost of Funds (CoF) rose to 3.7% in 2014 and 3.5% in Q1:2015 from 3.1% in 2013 while the 2014 credit impairment charges rose by 13.2% to
N26.4 billion from N23.3 billion in 2013. In the same period under review, the bank’s Cost to Income Ratio (CIR) rose to 63.3% for 2014 from 59.4% in financial year 2013 (but went up to 62.0% in the first quarter of 2015. Nevertheless, it is still below the 67.8% average rate for Tier-2
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banks. Also, the 2014 Profit Before Tax (PBT) and Profit After Tax (PAT) equally declined by 12.4% and 10.7% respectively, and also in first quarter of 2015 -PBT (-9.5%) and PAT (-15.1%) joined the ranks of declining indices. According to Afrinvest Research, “a further analysis of the
operating expenses shows that substantial increase in AMCON Resolution Fund (+149.5%), professional fees (+37.4%) and personnel expenses (+13.3%) accounted for the rise in Cost to Income Ratio (CIR) in financial year 2014. Continues on PAGE 2
Monday April 27 - Sunday May 03, 2015
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Pension Industry Paid N271bn to Retirees in 2014
O QUOTE
perators in the pension industry paid out total of N271.15 billion as lump sum to retirees in 2014 under the new Contributory Pension Scheme (CPS) and an average monthly pension of N3.84 billion. In addition, another sum of N62.20 billion was paid as premium to
insurance companies to provide life annuity for 14, 784 retirees. Mrs. Chinelo Anohu-Amazu, Director-General, National Pension Commission (PenCom) told Business Journal in an Executive Chat that a total of 115,529 workers had retired as at 31 December, 2014 with 87.20 percent (100,745) of the retirees on Programmed Withdrawal, while the remaining
12.80 percent (14,784 retirees) were on Life Annuity. She said during the period, a total sum of N124.60 million and N12.41 million were paid as lump sum and average monthly pension respectively for 246 retirees on health grounds while a total sum of N67.31 billion death benefits were also paid to beneficiaries of 25,232 deceased workers in both the public and private
sectors. “The pension industry had accumulated a total of N2.54 trillion pension contributions as at the reporting period. The pension contributions contributed by the public sector stood at N1.45 trillion, representing 57.19 percent of the total, while the private sector contributed N1.09 trillion (42.81 percent),” she said. “The total value of pension
industry assets under the CPS as at 31st December, 2014, grew to N4.61 trillion from N4.06 trillion in the preceding year, with an average annual growth rate of 30 percent. This pool of pension funds is a potential platform for attaining the transformation agenda of Government in the provision of infrastructure, energy, employment and the development of the real sector of the econo-
my.” The PenCom DG also reported that membership of the CPS witnessed significant growth during the year under review, with total number of registered participants rising by 8.05 percent from 5.92 million as at 31 December, 2013 to 6.40 million as at the end of 2014. Continues on PAGE 2
Rasheed Olaoluwa MD/CEO, Bank of Industry
“A nation that wants to develop must pay attention to technology because it has been proven from the beginning of humanity that technologies control the economy.”
Pension Industry Will Invest in Infrastructure, Real Estate to Diversify Investment
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Reclaiming the Identity of a Brand
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L-R: Executive Vice Chairman, Nigerian Communications Commission (NCC ) Dr. Eugene Juwah and Speaker, Pan-African Students Union Parliament (ASUP), Samuel Solomon, during the presentation of Pan-African Servant Leadership Award to the EVC in Abuja recently.