Provisioning deflates CIBN operating surplus by 45%
On May 28, 2012
By Babajide Komolafe
The Chartered Institute of Bankers of Nigeria (CIBN) recorded 45 per cent decline in its operating surplus for the year ended December 31st 2011 due to provisioning for diminution in investment. Results of the Institute show that operating surplus fell to N21 million from N74.5 million in 2010.
This, according to the National Treasurer of the Institute, Mr Uche Olowu, was due to provision for diminution in investment losses of N58.14 million.
He said, “The internally generated revenue of N291.44 million combined with Banks’ subscription of N136.99 million less operating expenses of N324.04 million and depreciation of N24.63 million resulted in operating surplus of N79.75 million before provision of N58.14 million for diminution in value of investment leading to a net operating surplus of N21.61 million.
Presenting the financial performance of the Institute in 2011, he said, “The year 2011 was very eventful as the Nigerian Financial System continued to experience challenges occasioned by the global financial crisis that started in 2009.
However, the Institute did not relent in its pursuit for membership growth in addition to other income generating activities. The Institute also embarked on a restructuring exercise, which led to the modification and re-alignment of the existing Organogram. It is envisage that this will bring about improved business process and managerial efficiency with the attendant improvement in revenue generation, going forward.
“The challenges of the operating environment notwithstanding, I am pleased to inform you that the Internally Generated Avenue during the year under consideration was higher than the subscriptions received from corporate members. This performance, which was consistent with the institute s medium to long-term plan, was encouraging as the inter-relational ratio of Internally Generated Revenue and Corporate Members ‘ subscription to total income as at 31st December, 2011 stood at 68%, an increase of 3% when compared with 65% recorded in2010 fiscal.
“This is a clear indication that the institute is reducing its dependence on corporate members’ subscription for its activities. The balance sheet of the institute showed a bigger and healthier position as the net assets grew by N70.11mollion representing 8% from N857.81million in 2010 to N928.67million in 2011. Internally Generated Revenue increased from N254.06million in 2010 to N291.44million in 2011. This represents 15% increase when compared with the figure recorded in 2010.
“The incessant power outages from the Power Holding Company of Nigeria (PHCN) with the attendant very high cost of alternative energy source persisted during the year. However, due to effective cost control and prudent management, in the face of escalating costs, we were able to put the cost under check hence, total operating expenses (excluding provisions and depreciation) increased minimally from N316.82 million in 2010 to N324.04 million in 2011 representing 2% increase.”
