1. INTRODUCTION:
Your Excellency, the Bishop,
Respected Shareholders,
Ladies and Gentlemen.
Today is a milestone for Umuchinemere Procredit Micro-Finance Bank (UP-MBM) as we gather for our 17th Annual General Meeting of the stakeholders of our Bank. An economy exists and thrives on the good health and financial services provided by banks. If banks are healthy, they add up to the good health of a robust and thriving economy. If banks are ailing, unable to satisfy customer's needs, the entire economy suffers a setback.
Today, we announce that your bank, our bank, the Catholic bank, Umuchinemere Procredit Microfinance Bank is healthy, thriving, stable, visionary and determined to continue the good work started by its founders in 1995 to provide financial services to the people of Nigeria. Bishop Michael Ugwu Eneja and Sir Gabriel Akachukwu had dreams that translated to great reality of what we are seeing today. As we thank all of you for gathering at this AGM today, the Board of Directors is glad to present the annual report to the shareholders. As chairman of Board, I am particularly delighted to note that many shareholders are here. I welcome all of you and present the Chairman's statement.
2. GLOBAL ECONOMIC ENVIRONMENT:
Global economic environment of 2012 witnessed a reversal of the global economic melt-down with a balancing effect that includes global banking rules, re-bouncing from recession into economic progress. The assertion by President Obama of the world's largest economy, the USA, that wars and terror may no longer be the response to crises as a fundamental principle and the introduction of year of Faith by Pope Benedict the XVI for the Church in 2012 speak volumes of leadership in global governance.
Permit me, therefore, to summarize 2012 as the year of Faith in what humans can do under God to repair broken communities, reinvest what is good and noble, re-engineer the economy and wake up latent energies.
3. NATIONAL ECONOMIC ENVIRONMENT:
On the Nigeria scene, 2012 was a tough year with the rise of religious intolerance, breakdown of law and order in some parts of Northern Nigeria which led to measures by the Federal Government to contain insurgency, reduce anarchy and established Law and Order. For those living in Enugu, the town witnessed large numbers of returnees persons, refugees and immigrants from other parts of Nigeria.
Also, regulatory pressures increased in Nigeria within the banking industry as the Central Bank of Nigeria and other regulatory bodies continued to collaborate to establish more stringent banking rules in order to ensure that banks are in better health and to maintain financial stability in the country going forward.
The CBN introduced a number of measures to increase financial market regulation, including the cashless policy, financial inclusion, agency banking, risk base supervision in banks and comprehensive review of banks' capital and liquidity positions. The main thrust of these new regulations is about banks holding more capital and liquidity to support their operation, reduce the cash in circulation, bring banks to the door step of rural communities and to include those that are hitherto excluded from the financial market due to one reason or the other.
Also in a bid to avoid a repeat of 2009/2010 financial crises which led to the bailout of nine Commercial Banks in the country in 2009 and to the stripping of licenses of 224 Microfinance Banks in 2010, the CBN took measures to prevent additional borrowings to firms struggling to meet their repayments, ensuring that banks' non performing loans levels are well managed.
UP-MFB in the face of the above measures and challenges was able to embark on the following expansion programs:
1. Establishment of a Customer Meeting Point (CMP) at Oji River Market in Oji River LGA.
2. Establishment of a Customer Meeting Point (CMP) at Umumba Ndiagu in Ezeagu LGA.
3. Acquisition of Land for construction of Regional Office at Agbani.
4. Networking and conversion of Amokwe CMP to a full branch (in progress).
4. THE CHURCH IN SERVICE TO DEVELOPMENT, POVERTY ERADICATION AND ECONOMIC JUSTICE:
Catholic Social Teaching establishes the clear fact that economic activity is an apostolate in the service of the Common Good. It is best carried out in a decentralized manner known as subsidiarity which guarantees SELF HELP as the BEST HELP. The principle of human dignity, personal freedom, regard for hard work and respect for labour and enterprise are hallmarks of this Teaching.
The Church in Enugu Diocese united under the Bishop far back in 1994 recognized the potentials inherent in the banking industry as a service to the Common Good, thus applied for a license to set up a Community Bank, approved in 1995 by Law and its eventual conversion to a unit Microfinance Bank in 2007 and a full- fledged State MFB in 2012. In essence, the Operating License granted enables UP-MFB to establish branches in all the LGAs of Enugu State and the Federal Capital Territory of Abuja.
If the shareholders of UP-MFB so desire, the Catholic Church which trademarks are: Unity, Holiness, Apostolicity and Universality can dream to use UP-MFB as a model for poverty eradication, economic transformation, employment and job creation, wealth generation and financial sustainability. The bank is grateful to the Bishop, clergy and lay faithful whose faith in the bank allows financial transactions that guaranteed the bank's progress as the number you have portray.
5. PERFORMANCE AND FINANCIAL INDICATORS:
Following the approval of our bank as a State Microfinance Bank in 2012, our transformation roadmap is well under execution as we upgrade and strengthen our operating platforms so that we can serve our customers better in that capacity. We are happy to report improvement from 2011 to 2012 in most performance indicators. Precisely, we recorded an increase in our earnings, growth in our balance sheet size/loan portfolio, delivered strong risk ratios, we worked to keep costs down and at the same time made effort to increase productivity.
Gross Earnings for the Bank increased by 47.86 percent from ₦235.68 million in 2011 to ₦348.48 million in 2012. This was driven by increase in loan volumes and investment activities. Profit Before Tax for the Bank was ₦120.87million in 2012, an increase of 238.33 percent when compared with ₦34.55 million in 2011.
Earnings Per Share also improved, with the Bank recording 42 kobo in 2012 as against 13 kobo in 2011, a growth of 223.08 percent.
Operating expenses increased by 14.29% with the Bank recording ₦227.59 million in expenses as against ₦199.13 million in the previous year. The increase in expenses resulted from extra effort made to achieve higher performance during the year.
The size and structure of our balance sheet equally improved in 2012. The balance sheet grew by 3.23 percent to close at ₦1.88 billion in December, 2012, (December 2011 figure was ₦1.83 billion). Customers' deposit with the Bank came down to ₦1.28 billion from ₦1.35 billion in December 2011, a decrease by 5.33 percent while gross loan grew by 4.82% to close at ₦413.12 million (2011 was ₦394.12 million). As a result of this growth in loan portfolio, loan to deposit ratio increased from 29.26% in 2011 to 32.39 in 2012. However, the 2012 ratio was still below the CBN bench mark of 70% thereby leaving an ample room to grow the loan book in 2013.
Paid-Up Share Capital of the bank in 2012 stood at ₦277.92 million, representing an increase of 1.33% from ₦274.27 million recorded in 2011. Similarly, Shareholder's fund stood at ₦538,813.48 million in December 2012, an increase of 20.49% from ₦447.20 million in December 2011.
In 2012, UP-MFB delivered strong risk ratio, thus providing a strong platform for exceptional performance in 2013. Capital adequacy ratio was 109.30% compared to a regulatory minimum of 10%. In fact, CBN supervisory Report of August 2, 2013 which covered the period of May 1, 2012 to March 31, 2013 rated UP-MFB's capital adequacy as "STRONG, with future outlook as bright". As at December 31, 2012 our average liquidity ratio was 103.59%, 2013 compared to a regulatory prescribed minimum ratio of 20%. UP-MFB is always liquid and ready to serve its customers.
The achievements in 2012 may not have been attained without the sheer dedication and commitment of our workforce, the loyalty of our customers as well as the unwavering support of our shareholders. I therefore like to extend my sincere gratitude to you all for the continued belief in us.
6. BOARD AND MANAGEMENT:
The Board of UP-MFB is made up of highly dedicated, hard working, capable and loyal gentlemen and women. The constant co-operation and team work at the level of Board Committees especially the General Purpose Committee makes Umuchinemere the efficient Bank it is. The seven members of the Board are: Msgr Dr. Anthony Anijelo, Rev. Fr. Geofrey Aguigwo, Dr. Mrs. Ngozi Agu, Rev. Fr. Anthony Igwe, Chief Sir Gilbert Obu, Mrs. Nnenna Ekete (Managing Director) and myself as Chairman Board. Igwe R.C Ani and Lady Eucharia Enebe are Directors in attendance.
Ladies and gentlemen, may I inform you that the current UP-MFB Board's Committees are:
* Audit Committee: with Mr. Emeka Ibe as the Chairman,
* General Purpose Committee: with Dr. Mrs. Ngozi Agu as the Chairman,
* Investment Committee: with Mrs. Nnenna Ekete as the Chairman,
* ICT/Shares/PR Committee: with Rev. Fr. Geofrey Aguigwo as the Chairman,
* Establishment Committee: with Msgr Dr. Anthony Anijelo as Chairman,
* Security Committee: with Rev. Dr. Anthony Igwe as Chairman.
* Rev. Sr. Barr. Benedicta Odoh is the Company Secretary.
UP-MFB has progressed in many ramifications because the management is efficient, collaborative, constructive, hard working, loyal and open to advice. There is no known case of fraud in the bank affecting management staff. Under Mrs. Nnenna M. Ekete (MD/CEO), the bank has progressed with her able team:
Charles Ozor, Assistant General Manager/Head of Operation/Branch Networking, has helped establish Branches/Customer Meeting Point at 17 centers.
Odinaka H. Okeke, Senior Manager, Business Development, now Senior Manager, Credit/Risk Management under whose tenure, the bank managed 720 Coal City Taxis for Enugu State Government worth over ₦2 billion naira.
Ikechukwu Ngene, Senior Manager, Credit/Risk Management now Senior Manager, Business Development, under whose tenure, the Bank disbursed loans worth over ₦700 million to more than 3,000 Micro Loanees, Small Scale Entrepreneurs and Business Men/Women.
Bibian Ofoje, Senior Manager, Finance/Accounts under whose department, the investment portfolio reached over ₦1.2 billion in interbank placements.
Cajetan Eze, Senior Manager, Human Resources is responsible for Human Capital Development of the Bank.
Chijioke Charles Iheanacho, Regional Manager 9th Mile, now Abakpa Branch Manager.
Cyprian Ezeagu, Senior Manager, Internal Audit.
John Umeh, Branch Manager Agbani, now Regional Manager at 9th Mile.
OTHER BRANCH MANAGERS AND UNIT OFFICIALS INCLUDE:
Emeka Arum, Branch Manager, Agbani.
Fabian Ozoana, Branch Manager, Godfrey Okoye University.
Achu Alex, Branch Manager, Garriki.
Sir Abuchi Anueyiagu, PRO/Media Officer.
Mrs. Chioma Okafor, Head, Shares.
Engr. Gloria Uzodi, Head, ICT.
On CBN Microfinance Certificate Programme, four more staff of UP-MFB emerged successful and were inducted by the Institute of Chartered Bankers of Nigeria (CIBN). The staff include Mr. Fabian Ozoana (Godfrey Okoye University Branch Manager) and Engr. Gloria Uzodi (Head, ITC). With this development, UP-MFB now has eight (8) Certified Microfinance Bankers. More staff of the bank are currently undergoing the same training.
7. OUTLOOK, PROJECTIONS AND CONCLUSION:
Umuchinemere Bank is already present with branches and CMPs in the six Deaneries of Enugu Diocese. The Bank shall continue its expansion in these zones by consolidating presence in the Deaneries and by venturing outside of Enugu Diocese in due time. The bank intends to fund businesses of SMEs and Parish Communities that fulfill requirements under the law.
With the shareholders fund already at ₦677.48 million as at this AGM, and Paid-Up Capital ₦282.28 million and authorized Capital of ₦1 billion UP-MFB, we intend to:
1. Intensify our partnership with Godfrey Okoye University and assist parents pay school fees of their children through a revolving loan scheme.
2. Support Mission Schools and Hospitals in the Diocese and be their primary banker.
3. Promote women, CWO, CYON, CMO funding needs through customized loans scheme for groups and individuals borrowers under this umbrella.
4. Increase the partnership with the Corporate Parent, Catholic Diocese of Enugu towards mutually beneficial products.
5. Encourage employment of shareholders' wards and employable graduates who have skills needed by the bank as a matter of priority.
6. Comply with CBN regulations and support the apex bank as a leading Microfinance Bank in Nigeria to orientate and mainstream the role of MFBs as a critical catalyst for Nation Building and Poverty Reduction.
7. Partner with Enugu State Government in the upcoming program of Urban Mass Transit and Coal City Taxi role out by up-scaling the subsidiary company, CCCFM Ltd with qualitative and skilled personnel.
8. Invest in training programs and scholarships offers as a Corporate Social Responsibility agenda to the Catholic Community of Enugu Diocese and indeed all people of goodwill.
9. Support the Poverty and Caritas Desk with products that generate spill over for the poor.
10. Invest in warehousing entrepreneurs at the Akanu Ibiam International Airport, Enugu to deliver financial products to the airport area, passengers and drivers as well as seek for a branch presence at the Airport.
8. GRATITUDE/CONCLUSION
Your Excellency, ladies and gentlemen, on behalf of the Board, Management and Staff of UP-MFB, I thank you for your continued goodwill, collaboration and patronage.
We announce today, a dividend of 11k per share and hereby ask the shareholders to approve this proposal alongside authorization of the Board to appoint and fix the auditor's fees as presented.
God bless you all.
Rev. Dr. Prof. Msgr. Obiora Ike
Chairman, UP-MFB Board of Directors.