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NEXIM recovers N2.4bn debts trapped in failed bank

Posted by By SEUN ADESIDA on 2006/11/20 | Views: 707 |

NEXIM recovers N2.4bn debts trapped in failed bank


Managing director and chief executive officer of Nigerian Export Import (NEXIM) Bank, Alhaji Baba Yusuf Ahmed, said that the bank has recovered a total of N2.35billion out N4.7billion trapped in some of the distressed banks in the country.

Managing director and chief executive officer of Nigerian Export Import (NEXIM) Bank, Alhaji Baba Yusuf Ahmed, said that the bank has recovered a total of N2.35billion out N4.7billion trapped in some of the distressed banks in the country.

According to Ahmed, "management has continued to implement a coordinated debt recovery strategy, which has led to the recovery of over N2.35bn of the N4.7bn trapped in distressed banks in 1990s."

Apart from seeking the assistance of debt-collection agents, the bank had sought the assistance of the Economic and Financial Crimes Commission (EFCC) in the recovery of some of the debts and the bank recently established a risk management department charged with specific responsibility of enhancing recovery of delinquent loans.

He said, "re-directing the bank's revenue base from investment in treasury bills to its core mandate of export credit resulted in increase of revenue from N599.9million to N1.157bn in 2006. While the bank's total asset base grew from N2.28bn in 2000 to N14.43bn as at August 2006." Stating that inadequate funding is a major constraint to the bank's operations, the bank has been financing its operations primarily through equity and retained earnings.

The bank boss emphasize that the bank is determined to support the Federal Government's annual 10 per cent non-oil export growth rate target but noted that to be able to do this, an estimated total funding requirement of N50 billion by 2007 is needed. On loans granted, he said the bank granted a total loan of N38.41billion to the export sector between 1999 and 2006, out of which N9.406billion was granted this year.

Meanwhile the Ministry of Finance has promised to release N20.26bn to the bank to finance its own portion of the shareholding in the authorized share capital of the nation's export bank, which has been increased to N50bn.

Making this known Wednesday in Abuja during a familiarization tour of NEXIM, Minister of State for Finance, Mr. Elias Mbam, noted that, when consolidated into the share capital account, the fund would make the bank buoyant enough to achieve its mandate of providing financial and risk bearing services and realize the potential of the sector.

He believed that "the bank by its statutory responsibility should be properly positioned to contribute to the economic development of our country," stating that "I am aware that the bank has made some successes particularly in mobilizing fund for the encouragement of export industries."

NEXIM is owned by the Federal Government through shareholding equally subscribed to by the Central Bank of Nigeria (CBN), 50 per cent and Ministry of Finance Incorporated (MOFI), 50 per cent. The bank authorized share capital was increased from an initial sum of N100m in 1991 to N10bn in 2004. The capital was further increased to N50bn due to the banking sector reforms of the Federal Government, while the balance of N40bn was called up for payment.

The bank's paid up capital as at 31 August 2006 was N10.75bn while shareholders' fund currently stands at N11.0 bn. However, granting the request of NEXIM, Mbam promised that the finance ministry would intervene on behalf of the bank with a view to securing the release of the seed capital of N73m from the Ministry of Transport for the funding of the Inter-State Road Transit Scheme (ISRT).

NEXIM, which was appointed the national guarantor to the ISRT, had complained that since the inception of the scheme it has continued to use its resources to finance its operations without the necessary reimbursement from the ministry of transport. ISRT was established to promote free flow of goods among member-states free of duties, taxes and restrictions while in transit; eliminate of time wasting escort system; and check the diversion of goods consigned for a specific destination.

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Fay(Katy, Texas, US)says...

Actually translates to bravehearted.