By Ifeanyi Onuba, Abuja   Thursday, 23 Sep 2010

The Nigerian Export- Import Bank on Wednesday said that the recent transformation process which it embarked on in the first quarter of this year had helped to reposition the bank to meet the challenges of the international financial system.

 

Established by an Act of Parliament No 38 in 1991 to carry out the business of export credit guarantee and insurance, the bank had in March engaged the services of an international consulting firm, KPMG Professional Services, to drive this process.

 

It was gathered that the need to reorganise the bank’s operation followed a mandate given by a former Minister of Finance, Dr. Mansur Muhtar, during the inauguration of the newly appointed board.

 

To achieve this mandate, the Managing Director of the bank, Mr. Robert Orya, told journalists in Abuja that the bank had in the last eight months granted N5bn to exporters as credit to boost the country’s international trade profile.

 

The NEXIM Bank boss, who is expected to make a presentation next week to a diverse audience in Berlin, Germany on “Investment for partnership and development,” pointed out that prior to his assumption of office about a year ago, the bank could not live up to its mandate.

 

For instance, he revealed that as at August 20, 2009, the bank’s total loan portfolio stood at N14.6bn, out of which 72 per cent was classified as non-performing.

 

Within that category, he noted that about N10.03bn or 69.09 per cent was classified as completely lost, adding that there was a depletion of the bank’s shareholders’ fund from N15.85bn to about N9.33bn as a result of accumulated losses.

 

However, he said that the new board had corrected that anomaly, as the bank had returned to profitability.

 

He said that unlike the huge loss made in the last financial year, the bank’s profit for the eight months ending August 2010 stood at N277m.

 

This, he noted, was realised after making a huge provision of N5bn as non- performing loans.

 

On the need to recapitalise the bank, Orya admitted that the bank was under-capitalised, when compared to what obtained in the Export Import banks of other countries.

 

He put the additional capital required by the bank, at N50bn, adding that discussions had reached an advanced stage with the Central Bank of Nigeria and the Ministry of Finance to inject fresh capital to boost the bank’s operations.

Source: Punch