Connect with us

Business

CBN finally releases audited accounts, profits surge to N103.8 billion in 2022

Published

1 year ago

on

The Central Bank of Nigeria released its long-awaited audited accounts for the year ended December 2022 showing it made a profit after tax of N103.8 billion up from N75.1 billion reported a year earlier.

The results which are published on the website of the apex bank included audited results for 2016, 2017, 2018, 2019, 2020, and 2021.

The apex bank’s results also show it reported a profit after tax every year for the last 8 years consecutively despite facing currency depreciations and doling out intervention funds, and loans to the government amongst other development finance activities.

Until now, the results have been withheld from the public under Godwin Emefiele. However, the recent decision of President Tinubu to investigate the apex bank’s operations under the suspended CBN Governor may have triggered the release of the financial statements.

Details of the results

The latest result which was signed by Godwin Emefiele and audited by EY and KPMG shows the apex bank has relied on a combination of higher interest income, fees, and commissions to remain profitable.

A cursory analysis of the results shows the apex bank earned a net interest income of N1.8 trillion compared to N1 trillion a year earlier representing an 80% surge in net interest income.

Net operating income was N1.2 trillion compared to N1.1 trillion same period in 2021. Total operating expenses also rose from N1.1 trillion in 2021 compared to N1.2 trillion in 2022.

Ways and Means Income Surge: A major source of interest income was from loans and advances in the form of overdrafts given to the federal government.

  • The loans totaling N23 trillion and also known as “Ways and Means” generated interest of N1.9 trillion for the apex bank compared to N1.2 trillion in the prior year.
  • The controversial loan has been criticized for its size and flouting of the central bank act that only allows the apex bank to lend a maximum of 5% of prior year FG revenues to the government.

According to the audited accounts of the apex bank, the Ways and Means provision is priced at a whopping MPR+3%.

  • “Included in interest income on Loans and receivables is interest income on Overdraft facility granted to the Federal Government amounting to N1.9 trillion (2021: N1.2 trillion). The interest rate applied on this facility is MPR+3%.” CBN

The apex bank’s results also show it earned an additional N247 billion and N156 billion from AMCON and via FGN Securities respectively.

The apex bank also reported another N422.7 billion in income derived from “debt instruments measured at fair value through profit and loss (FVTL). FVTL is a way companies account for certain investments they own. Instead of noting the investment’s original cost, the company regularly updates the investment’s value to reflect its current market price.

This method ensures that the financial statements reflect the most up-to-date value of the investment.

Forex Income: Rounding up its major income sources was N104.5 billion income earned from commissions from the sale of foreign currency and other related transactions.

Another N15.9 billion was earned from processing currency, Bureau de Change application and registration, commission on fund transfers, and other banks and financial institutions’ application and licensing fees.

Expenses loaded intervention, fx, and credit-related losses

But as the apex bank’s income surged through the extension of loans to the federal government and from forex transactions, it also incurred huge expenses on forex and loan impairments.

A key feature of the expenses was N888.3 billion incurred by the apex bank as “other operating expenses” during the year (N884.2 billion in 2021).

  • A breakdown of the amount reveals closer to half of the expenses (N346.2 billion) were losses arising from foreign exchange revaluation losses.
  • Also included is another N155.5 billion incurred as “rebate expenses” which the apex bank explained was connected to RT 200 and Naira4Dollar, a policy under CBN led Godwin Emefiele to attract forex inflows.

For example, the RT 200 allowed the apex bank to pay exporters an incentive for repatriating their dollars.

  • “Rebate expenses represent expenses incurred by the CBN in connection with the RT200 and Naira 4 Dollar schemes which the Bank introduced to enhance foreign currency inflow, diversify the sources of FX inflow, increase the level of non-oil exports, ensure stability and sustainability of FX inflows, and support export-oriented companies to expand their export operations and capabilities.

The Bank stated it incurred N137 billion in 2022 on the RT200 scheme and  In 2021 Naira 4 Dollar expense was N4 billion. This policy has since been dropped since the unification of the naira was announced.

FG Expenses: Another major expense item reported by the central bank and included in the “other operating expense” was N125 billion (N45 billion in 2021) which it incurred in connection to national security, the federal government, and security agencies. While the expenses are actually an extension of loans to the federal government, it is expensed on the FG repays the loans

  • intervention activities expenses represents expenses carried out by CBN in connection with national security, federal government, state securities, armed forces, financial sector capacity building where there is important need for the fund. All payments made in relation to intervention activities embarked on by the Group are expensed as incurred. However, payments made by the Group in relation to intervention activities on behalf of the Federal Government are recognized as receivables and are fully impaired after 12 months if the amount is not received from the Federal Government.

Credit Losses: The apex bank also reported a whopping N875.2 billion in credit losses almost double the N498.2 billion reported a year earlier.

  • This suggests most of the interest earned was dented by impairment on its loans.
  • The apex bank did not break down which of its borrowers have or are defaulting. However, its balance sheet shows a total loan of about N31.4 trillion.

The apex bank’s balance sheet expanded by about N22 trillion from N35.5 trillion in 2018 to about N57.9 trillion in 2022.

Related Topics:

Business

X to launch payment system this year

Published

3 hours ago

on

January 1, 2025 2:45 pm

By

Linda Yaccarino, the chief executive officer (CEO) of X, formerly Twitter, has announced that the social media platform will launch a payment system called X Money in 2025.

In a statement on X on Tuesday, Yaccarino said 2025 will connect X users in ways never thought possible.

“In 2024, X changed the world. Now, YOU are the media!” she said.

“2025 X will connect you in ways never thought possible. X TV, X Money, Grok and more.

“Buckle up. Happy New Year!”

Continue Reading

Business

Kenya Airways faces $1 million demand from Nigerian family over alleged botched Christmas Trip

Published

1 day ago

on

December 31, 2024 3:14 pm

By

A Nigerian family has urged Kenya Airways Limited to pay $1 million as general damages and compensation over an allegedly botched Christmas trip involving their daughter, a “minor.”

The family, represented by Donald Ibebuike of the Creed & Brooks Partners law firm, addressed the airline in a letter dated December 21, 2024.

The firm accused the airline of allegedly exposing the entire family of its client (Akhanememeh Joseph Osikhena) to unplanned expenditure and disruption of family plans following the botched trip of their daughter (a minor).

Allegations by Creed & Brooks 

According to the letter addressed to the Managing Director of Kenya Airways Ltd in Lagos and copied to the airline’s Nairobi office, the family purchased and was issued return tickets for their trip by the airline through Wakanow.com Ltd. on August 31, 2024.

The family intended to take the trip to celebrate Christmas and New Year together, visit friends and close relatives across the United Kingdom, and explore tourist attractions and historical monuments before departing the UK for Nigeria on January 5, 2025.

The lawyer added that in line with the planned itinerary, the client and his family began their UK trip at Murtala Mohammed International Airport, Lagos, on December 16, 2024.

He stated that the travel documents of his client and his family members, including the minor (Ms. Gabriella Ikhianosimeh Akhanemeh), were duly checked by Kenya Airways in Lagos, and they were issued with boarding passes for the flight to Heathrow, London, with a stopover at Jomo Kenyatta International Airport, Nairobi, before proceeding to London Heathrow.

However, he added, the airline allegedly refused to allow the minor to board its airplane at Jomo Kenyatta International Airport, Nairobi, citing  “clerical errors” on her travel document, which had already been processed and accepted in Lagos, Nigeria, by the airline.

“Apparently, the passport numbers referenced as accompanying the parents were inadvertently and incorrectly entered by one digit each, but the names were correctly stated by the UK Border Agency. 

“Given that our client’s daughter, Ms. Gabriella Ikhianosimeh Akhanemeh, is a minor and in order to attend to her bruised emotions and psychological stability, our client had to discontinue his journey while his wife, Mrs. Rita Nwamaka Akhanemeh, continued and completed her trip to London Heathrow with their other two children, Ms. Brenda Ekhaosi Akhanemeh and Mr. Jordan Eghoghor Akhanemeh,” the letter reads in part. 

The lawyer contended that the airline should not have abandoned the family’s daughter halfway, regardless of the clerical errors, as the family had been cleared by the airline’s Nigerian office.

He added that the airline insisted his client and his daughter return to Nigeria.

Ibebuike further claims that the airline advised his client and his daughter to pay over $4,000 before they could be returned to Lagos, Nigeria, describing the development as an alleged “infamous and ill-conceived decision,” which exposed his client to unplanned expenditure and trauma in Nairobi, Kenya.

“Take notice that, owing to this and other associated reasons, our client has instructed us to demand and we hereby demand that you immediately continue and complete our client and Ms. Gabriella Ikhianosimeh Akhanemeh’s journey to London Heathrow, or return them to Lagos, Nigeria, at no cost, without any delay, and pay damages and reparation to him, his daughter, and the entire family in the sum of USD 1,000,000.00 (One Million United States Dollars) within seven (7) days of receipt of this letter,” the letter demands. 

The law firm urged the airline to comply with its demands in the interest of justice.

Nairametrics contacted Kenya Airways for a response, but the airline had not replied at the time of publishing this report.

Continue Reading

Business

CBN, SEC approve FCMB Group’s rights offer

Published

1 day ago

on

December 31, 2024 11:06 am

By

The Central Bank of Nigeria and the Securities and Exchange Commission have approved the N147bn rights offer of FCMB Group.

This was disclosed in a statement issued on Monday which was signed by the Company Secretary, Olufunmilayo Adedibu.

This marked the second approval from the CBN in days on the first tranche of capital-raising exercise of banks this year.

It was revealed that the offer was oversubscribed by 33 per cent, attracting 42,800 investors, with 92 per cent subscribing via more convenient digital channels such as the bank’s mobile app and ushering in over 39,000 new investors to the FCMB Group.

The total amount raised and verified by the regulators is N147,508,464,568.60, and N144,559,788,701.30 was absorbed through the issuance of 19,802,710,781 ordinary shares at N7.30 per share, bringing the total post-offer issued shares to 39,605,421,562 shares.

FCMB said that it has also obtained regulatory approvals to use the net proceeds of the public offer to strengthen the capital base of its banking subsidiary, First City Monument Bank.

With the new fund injection, the new capital base of FCMB stands at over N240bn, which exceeds the minimum requirement for a national banking license.

The firm said it is aiming to retain its international banking licence and would be able to achieve that target with the subsequent phases of the FCMB Group’s capital program.

Commenting on the successful completion of the public offer, the Group Chief Executive, Mr. Ladi Balogun, said, “We are grateful to our existing shareholders and new investors for coming out strongly to support this offer. The success of the public offer reflects significant investor confidence in our strategy and growth potential, as well as trust in the board, leadership, and our people to fulfil our commitments and realise this potential.

“We also extend our profound appreciation to the Central Bank of Nigeria, the Securities and Exchange Commission, and the Nigerian Exchange Limited for their continued foresight, innovation, guidance, and support, which has been instrumental in achieving this significant milestone.

“This marks an important step forward in our journey to unlock new opportunities, create value for our shareholders, and contribute to the economic growth of Nigeria and Africa. We remain committed to executing the subsequent phases of our capital-raising program in 2025.”

At the recently held Extraordinary General Meeting, shareholders approved the plans to raise N340bn as additional capital.

Continue Reading

Bodex F. Hungbo, SPMIIM is a multiple award-winning Nigerian Digital Media Practitioner, Digital Strategist, PR consultant, Brand and Event Expert, Tv Presenter, Tier-A Blogger/Influencer, and a top cobbler in Nigeria.

She has widespread experiences across different professions and skills, which includes experiences in; Marketing, Media, Broadcasting, Brand and Event Management, Administration and Management with prior stints at MTN, NAPIMS-NNPC, GLOBAL FLEET OIL AND GAS, LTV, Silverbird and a host of others

Most Read...