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NEXIM Bank laments low level of interbank funding

By BusinessNews Staff on January 3, 2014

The Managing Director, Nigerian Export-Import Bank, Mr. Roberts Orya, has said low level of inter-bank funding, lack of established and robust fund for risk bearing facilities and the institution’s outstanding share capital are major challenges hampering the operation of the bank.

Orya said this when members of the House of Representatives Committee on Banking and Currency visited the bank headquarters in Abuja in performance of its oversight function.

In a presentation made to the lawmakers, which was obtained by our correspondent on Wednesday, the managing director said the bank required a minimum of N50bn funding window from the Central Bank of Nigeria to enhance its intervention under the Rediscount and Refinancing Facility.

He also said that though the NEXIM Act provided for the establishment of a guarantee fund and a political risk fund to be funded by shareholders, the funds had not been established, thus imposing some limitations on the bank’s risk bearing operations.

Orya told the lawmakers that an amount of N9.9bn out of the N25bn share capital subscribed to by the Federal Ministry of Finance remained unpaid and had continued to limit the bank’s capacity to support the non-oil export sectors of the economy.

For instance, he said that the existing applications currently being processed by the bank far exceeds the authorized share capital.

In spite of the challenges, he said the bank had been able to recover the sum of N1.82bn from its non-performing loan portfolio within the last four years.

The recovery, he said, where made possible through an aggressive debt recovery, including the use of debt recovery agents.

Orya said prior to the assumption of office of the current management team, the bank had a huge non-performing loan portfolio as well weak risk management structure.

Findings revealed that the bank’s total loan portfolio as of August 20, 2009 was N14.6bn, out of which 72 per cent was non-performing, and within that category, N10.03bn or 69.09 per cent was classified as completely lost.

Orya, however, stated that the debt recovery strategy had yielded results.

He added that the bank would continue to use every available means to ensure that all outstanding loans were recovered.

“Following the overhaul of its operational model, its increased business scope, and the aggressive recovery of N1.82bn from its NPL portfolio, the bank has since 2010 continued to operate as a profitable organisation,” Orya said.

Giving a breakdown of the loan recovery made within the last four years, the NEXIM Bank boss said the sum of N241.36m was recovered in 2009; N504.95m in 2010; and N438.10m in 2011.

[Punch]

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