Nigeria Police Force (NPF) Microfinance Bank Plc half year gross earnings have risen 121.32 percent, driven by interest income on loans and advances, fees, commission and other ancillary income.
For the first six months through June 2015, NPF’s gross earnings surged by 121.32 percent to N1.15 billion from N519.59 million the previous year.
This growth was driven by a tremendous increase in interest income by 126.80 percent to N746.02 million in June 2015 as against N328.93 million last year. Net interest income also spiked by 114.80 percent to N648.78 million in June 2015 compared with N302.04 million last year.
The impressive results in the period under review got analysts betting that the company has the capacity to take advantage of the low penetration of micro-finance banks in Africa largest economy.
Micro-finance banks provide huge growth opportunities for operators.
Micro-finance market remains grossly untapped in Africa largest oil producer as lack of adequate training of staff, under capitalization, poor internal control measures, poor asset management, liquidity problems and corruption remains a stumbling block to the industry.
Banks don’t give loans to the microfinance businesses often because of lack of collateralised assets.
Analysts say poverty has made it practically impossible for small business owners to own collateralised assets.
According to the EFInA Access to Finance Services in Nigeria 2014 survey, awareness and usage of microfinance banks is still relatively low only 2.6 million adults (2.8 percent of total adults) have access to microfinance banks.
Despite the challenges of huge energy costs bleeding the bottom line of most companies, NPF’s net income increased by 133.38 percent to N371 million in June 2015 compared with N159.03 million June 2014.
Operating income surged by 117.89 percent to N1.05 billion in June 2015 as against N492.70 million last year. The bank’s net income margin increased to 32.26 percent in June 2015 as against 30.60 percent last year.
Cost to income ratio reduced to 60.74 percent in June 2015 from 63.84 percent the previous year.
NPF MFB’s has a solid asset base while creating risk assets as total assets jumped by 12.43 percent to N12.21 billion in June 2015 as against N10.86 billion in June 2014.
The bank’s deposit also grew by 8.50 percent in June 2015 to N5.21 billion from N4.8 billion as at 31 December 2014, funding 42.66 percent of total assets.
The increase in loan able funds was attributed to the bank’s establishment of a core marketing department alongside various staff incentives such as salary reviews and merit-based bonuses.
Loans and advances to customers increased by 16.10 percent to N7.57 billion in June 2015 as against N6.52 billion as at December 2014.
As at 31 June, 2014, the Nigeria Police Force MFB had total shareholders’ funds of N4.44 billion, representing a 11 percent growth from 2014. This was well above the regulatory minimum of N2bilion for a national microfinance bank.
The bank’s share price closed at N1.01 on the floor of the exchange while market capitalization was N2.37 billion.
BALA AUGIE
