The management of Such I Microfinance Bank Limited has expressed worry over clients’ high profile indebtedness to the bank.
BusinessDay reports that the debt profile however dipped the bank’s revenue, which necessitated its inability to pay dividends to shareholders in 2012 and 2013 financial years.
Hassan Momodu, chairman of the financial institution, made the disclosure at the 17th annual general meeting in Auchi, the administrative headquarters of Etsako West Local Government Area.
Momodu said the debts were incurred by clients from 2003 to date before it was transformed to a microfinance bank from a community bank in 2007.
However, the managing director of the bank, Isaac Akowe put the debt profile of the bank at about N500 million, both the performing and the non-performing.
He put the non-performing loans at about N150 million, while the balance was for the performing loans.
The board chairman, who called on debtors to pay up their debts, however sought the intervention of well-meaning individuals to assist the bank to recover its debts, noting that such efforts would be adequately compensated.
According to him, “we were forced by the Central Bank of Nigeria (CBN) to provide for N71 million.
Every year we made an average profit of between N20 million and N30 million, and that made us to write-off the profit we made in 2012, and also again this 2013 financial year ending.
“I want to inform the shareholders that the N71 million have been totally written-off because the bank has a reserve of the profits made in the previous years.
”In this 2014 financial year, we will be able to make a profit of about N30 million after taxes so that we will be in a position to give you very good dividend at the end of the year. But because of the problem we had previously we will not be able to pay dividend.”
He however put the bank gross earnings in the period under review at N97.5 million, representing a decrease of 4 percent in the 2012, total assets increased by 15 percent to N502.2 million while earnings per share and return on asset (pre-tax) was 31 kobo and 4 kobo, respectively.
He disclosed that in its corporate social responsibility the bank donated 20,000 branded notebooks to about 24 government primary schools and10 private schools within the Etsako West Local Government Area during the period under review.
Momodu also indicated interest to key into the CBN’s N220 billion to promote and enhance Micro, Small and Medium Enterprises (MSMEs) in the locality.
IDRIS UMAR MOMOH
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