CHAIRMAN STATEMENT 2012

 

CHAIRMAN'S STATEMENT

Fellow Shareholders
CBN Officials,
Gentlemen of the Press,
Invited Guests,
Distinguished Ladies and Gentlemen,

On behalf of the Board of Directors, I am delighted to
welcome you to the 20^th Annual General Meeting of your Bank and present to you the Annual Report and Financial Statement for the year ended 31^stDecember, 2012.

BUSINESS ENVIRONMENT

The year witnessed a major achievement for your Bank
notwithstanding the very competitive and challenging business environment.
During the year under review, the global financial crisis continued to affect
the performance of the global economy and Nigeria has not been immured to this,
though the Central Bank of Nigeria took steps targeted at restructuring and
strengthening the economy.

Government commitments were not well seen in the areas of
long-term reforms in critical sectors such as the Microfinance, power
generation, public utilities finance and management, fight against corruption.
We still have a long way to go to transform this Nation.

PERFORMANCE OVERVIEW

We have consistently worked towards the achievement of our
mission to become a leading Microfinance Bank in Oyo State and Nigeria as a
whole. Our customers continue to grow along with the bank. We are serving over
25,000 customers with a gross loan portfolio which grew from N132 million in
2007 to over N250 million in 2012 and staff strength grew from 18 staff in 2007
to 60 staff as a 31^st December,2012.

MFB STATE LICENCE STATUS

I am glad to inform you that your Bank was among the first 4
MFBs to obtain the State Microfinance Bank Licence in 2012. With 53 MFBs in Oyo
State only 4 MFBs were able to migrate to a State Licensed MFBs as at 31^st
December, 2012. Your Bank is one of them.

At this junction, I want to appreciate the board of
directors, management and staff for this great achievement.

OPERATING RESULTS

a.      
Gross Earnings

The analysis of the Gross Earnings of the
bank showed that it decreased from N88, 962,960.00 in 2011 to N85, 204,692.00
in 2012. This shows a decrease of N3, 858,268.00 which represent 4.34%. This
decrease is believed to be as a result of e-payment that was introduced for the
payment of salaries in Oyo State which made many of our customers to move to
commercial banks. This is not peculiar to your bank alone.

b.     
Profit Before Tax

There was a decrease of profit before tax
from N33, 308,460.00 in 2011 to N12, 857,432.00 in 2012. The decrease was as a
result of decrease in gross earnings increase in staff cost, other overheads
and provision for loan losses. The increase in the staff costs and other overhead
was as a result of the prevailing general inflation level in the country. Again
provision for loan losses is recoverable and efforts/pressures are increased to
recover our loans.

c.      
Liquidity Management

The total cash and cash equivalents of the
bank as at 31^st December, 2012 was N82,793,915 while the total
deposit liability was N184,146,428.00. The liquidity ratio, which is the ratio
of cash and cash equivalent to total deposit liabilities was therefore 44.96%.

This is above the minimum of 20% prescribed
by the central Bank of Nigeria (CBN). The liquidity position is therefore
considered stable. This position is worthy of commendation if compared to the
previous year of 37.6%

d.     
Loans and Advances

The outstanding Loans and Advances as at 31^st
December,2012 were N259,229,307.00 as compared to N233,139.00 in 2011, which
represent an increase of N25,620,168.00. critical appraisal of the loan
portfolio reveals that a total of N219,927,691.00 representing  84.85% of the total loan is considered to be
performing, while N39,292,616.00, representing 15.16% of the total loan were
considered to be defective and has been classified accordingly as
non-performing loans.

e.     
Investment in Treasury Bills

The banks total investment in Nigeria
Treasury Bills was N10, 000,000 which represent 5.43% of the total deposit
liability of N184, 146,428. It can therefore be inferred that the bank complied
with section 9.2 (e) of the regulatory and supervisory guidelines which require
every Microfinance Banks in Nigeria to invest at least 5% of their deposit
liability in treasury bills.

f.       
Capital and Capital Adequacy    

The Authorized share capital of the bank as
at 31^st December, 2012 is 150,000,000 of N1.00 each i.e.
N150,000,000 out  of which N68,352,027
has been issued and paid. The shareholders fund was N122, 109,459 which shows a
fair position by being higher than the N100, 000,000 minimum required by the
central Bank of Nigeria (CBN).

DIVIDEND

The Directors, having considered the need
to continue to retain profit to further strengthening the bank's capital,
declare a dividend of 5 kobo per one ordinary share held as at 31^st
December, 2012.

   STAFF
WELFARE

       
During the year under review our staff was exposed to both in-house
training and external capacity building to improve their knowledge and
performance. The staff emolument was also reviewed upward by the board to
motivate them.

RETIREMENT

                I
wish to tell you of my retirement from our bank as the Chairman and Board
member with effect from December, 2013.

This becomes necessary for four reasons:

a.      
By my age at 70, I need to soft pedal.

b.     
I had been a director since the inception of our
old Eruwa Community Bank which metamorphosed into Excel Microfinance Bank now.
To me I have stayed enough.

c.      
The new CBN guidelines does not allow for an
indefinite Board membership or chairman.

d.     
Again, if this guideline must be followed, then
we need to inject new blood from our qualified, reliable and able Eruwa
indigenes.

APPRECIATION

                However,
I need to appreciate my past and present co-directors whose commitment allowed
the bank to grow so much. It is pertinent to thank and appreciate them all. In
those days of Community Bank, the Board meetings were held with torch lights
for years at night and without refreshment or allowances. I need to mention
this for us to remember the old beginning.

                We
own appreciation to the likes of Late Prince Ayoade Adelakun, who despite his
limitation, contributed immensely in our board meeting then. I must mention our
other board members whose participation and contributions were enormous to our
growth. They include the following: Prince R. O Oyedepo, Dr. Bayo I Adewusi,
Chief J.A Adejumo and Mr. Biodun Adejumo. They have all left the board. May
Allah reward them all for their selfless services to this bank. I wish to
advise the board to show appreciation and give each past board member an award
of shield in the name of our bank.

                Equally
we cannot but appreciate late Hon. Oke who was the past chairman, Audit
Committee (Rise for a minute).

This bank must never die. We need
your full co-operation, commitment and your fund to expand. We are one of the
only 4 banks out of 53 who are allowed by CBN to operate as a state
Microfinance banks with an approved #100m capital base. We can rise to National
level. It is up to us.

We also need to encourage female
participation/membership at the board level. I hereby request our Eruwa females
to come over and invest with the bank.

                My
last recognition/appreciation is to the management staff and others. They
showed high sense of commitment and trust. I request them to keep it up.

It is a pleasant memory to have
been part of this board in the last two decades. But whatever has a beginning
must have an end.

I wish the Bank a more progressive
and fruitful future. Thank you and God bless you all abundantly.

                                                                                                               
Alhaji F.S Ladapo

                                                                                                                Chairman,
Board of Directors