NDIC operating income up 28.73% to N66.94bn

The Nigeria Deposit Insurance Corporation (NDIC) has released its 2014 annual report and statement of accounts showing that its operating income increased by 28 percent to N66.94 billion.

The regulator’s total operating expenses increased by 22.77 percent to N30.36 billion as of December 31, 2014, from N24.73 billion as of December 31, 2013.

The net surplus of operating income over operating expenses for 2014 stood at N138.81 billion as against N114.18 billion in 2013, after remittance of N15.38 billion to the FGN Consolidated Revenue Fund Account.

The Deposit Insurance Fund (DIF) contributed by insured commercial banks to NDIC as of December 31, 2014, stood at N614.16 billion as against N508.06 billion reported as of December 31, 2013.

That was an increase of N106.10 billion or 20.88 percent over the 2013 figure.

The NDIC currently maintains three funds – the DIF for Deposit Money Banks; the Special Insured Institutions Fund (SIIF) for other insured deposit-taking financial institutions such as Microfinance Banks (MFBs) and Primary Mortgage Banks (PMBs), and Non-interest Deposit Insurance Fund (NIDIF), which was created in 2013 following the commencement of non-interest banking in Nigeria.

Giving the breakdown of financial position, Umaru Ibrahim, managing director, NDIC, said the SIIF increased by 23.39 percent to N71.21 billion as of December 31, 2014, from N57.71 billion as of December 31, 2013.

In the same vein, the NIDIF increased by 594.11 percent to N0.118 billion as of December 31, 2014, from N0.017 billion as of December 31, 2013.
The NDIC also said, overall the banking industry was safe and sound in 2014.

“The banking industry performance and level of soundness in 2014 indicated that 23 DMBs were rated sound and satisfactory during the period under review,” the report stated.

Banks grew profitability in 2014, despite the tough macro-economic environment, a sign of the firm macro prudential regulation by the NDIC.

The unaudited profit-before-tax (PBT) of the banking industry stood at N601.02 billion, representing an increase of 11.31 percent over N539.97 billion reported in 2013.

Return on Assets (ROA) and Return on Equity (ROE) declined marginally to 2.29 percent and 20.34 percent in 2013 and 2014, respectively, while the yield on earning assets also declined to 11.71 percent in 2014, from 13.10 percent in 2013.

A review of the banking industry sectoral distribution of credits to the various sectors of the economy indicated that top 10 sectors out of 22 accounted for 87.35 percent of total credits in 2014, compared with 81.99 percent in the previous year.

The other sectors accounted for 12.65 percent in 2014, as against 18.01 percent of the total credits extended by the DMBs in 2013.

Credit to the oil and gas sector accounted for the largest share of 25.74 percent, followed by manufacturing with 13.19 percent.