REPORTS AND FINANCIAL STATEMEN TS

CHAIRMAN'S STATEMENTS

Fellow Shareholders,

CBN Officials,

Gentlemen of the press,

Invited Guests,

Distinguished Ladies and Gentlemen,

It is my greatest pleasure to welcome you to this Annual General Meeting of our bank, Excel Microfinance Bank Limited.I present to you the 2010 Annual Report and Account of your Bank for review as usual.

BUSINESS ENVIROMENT

The domestic economy did better than the general forecast of its performance in the review period.Concern had been raised early in the year over how the decline in oil revenue and the global credit crunch would affect the economy and the impact on the domestic market for credit as the financial services sector adjucts to the changed financing conditions.The double digits inflation rate; poor road network that prevent farmers and traders from moving agricultural products and services from the rural areas to the urban cities; The failure of the government to address the problems facing the energy sector.All these are major constraints and changes to business development in the year under review.

Major CBN reforms in the period under review include the risk based examinatin of banks in the country: the actions taken to support eight of the banks adjudged to be in a grave situation.The withdrawal of licence of 128 MFBs adjudged to be technically distressed, The establishment of AMCON and the commencement of Microfinance Certification programme examination for the Managing Directors and Head of Departments.

In all these reformative actions had both negative and positive effect on our operations and performance in the period under review.

FINANCIAL REVIEW

The analysis of the Gross Earning of your Bank showed that Gross Earnings incresed from N63,626,617 in 2009 to N85,990,016 in 2010.This was an inrease of N22,363,399 in absolute terms and about 35% in relative terms.The composition of Gross Earning when analysed revealed that interest income remained the major source of earnings of the Bank for the year 2010. The amount which was N62,325,230 constituted about 73% of the total earning.Income from commissions charges which was N12,333,526 also constituted 13.5% while lnvestment income of N2,176,824 contributed the remaining 2.5% of the total earnings for the year 2010.It was also observed that there was a steady increase in interest income,commission charged and fees and other sundry income by a weighted average of 35%. Interest income increased from N46,335,181 in 2009 to N62,325,230 in 2010, this was an increase of N34.5%. In the same vein an increase of N6,373,550 in other income in the year 2010(i.e. Increase from N17,291,236 in 2009 to N23,664,786 in 2010) was 36.9% in relative terms.The weighted average of the increase was calculated to be 35.1%.

In my opinion, the improvement in the Earnings of the Bank is a commendable performance and I want to use this medium to appreciate the collective effort of the Management and the Board of Directors for this achievement.

PROFIT BEFORE TAX

There was an increase in the Net Profit before tax for the year 2010 when compared with that of year 2009.While the profit before tax for the year ended in 2009 was N12,315,025,N15,336,000 was made in the year 2010.This was an increase of N3,020,975 in absolute term and% in relative terms.

LIQUIDITY MANAGEMENT

The total cash and cash equivalents of the bank as at 31st December,2010 was N53,979,879 while the total deposit liability as at the date was N209,350,158.The liquidity ratio(which is the ratio of cash and equivalent to total deposit liabilities) was therefore 25.8%.This ratio is above the minimum of 20% prescribed by the Central Bank of Nigeria. The liquidity position of the bank was therefore stable.

DEPOSIT MANAGEMENT

The total Deposit Liabilities as at 31st December,2010 was N209,350,158.There was an increase of N72,998,718 when compared with the balance as at 31st December,2009.

ADDITIONAL CAPITAL

In line with the policy framework on Microfinance Bank,our paid-up-share capital must be N100 million to maintain our three branches and spread within the state.In view of this policy the board has decided to increase our authorised share capital to N150 million.We therefore implore all our shareholders to increase their shareholding in our bank.

BOARD OF DIRECTORS

During the year under review, our Managing Director/CEO Chief Joseph Adeola Peluola resigned his appointment in June 2010 as the Managing Director/CEO to pursue his political career.His resignation was accepted by the board of directors and the CBN was notified accordingly.However Chief Peluola is still a member of the board.The board has appointed Mr. Jegede Olufemi Olanrewaju as the Managing Director/CEO with immediate effect.

DIVIDEND AND BONUS ISSUE

The Board of Directors, having considered the performance and growth of the bank,proposed a cash dividend of 10 kobo per share for 10 shares held as at 31st December,2010.These translate to a total dividend of 20 kobo per share.

CONCLUSION

I sincerely thank my colleagues on Board for their wonderful support and honest interest to get more deposits within and outside for the comfort of our bank.

I also wish to express the appreciation of the Board and that of shareholders to the Management and Staff of our bank for their commitment and honesty.I thank them again for the commendable result achieved this year.

Finally,my thanks go to all the shareholders whose investments made it possible for us to sit here today.

May God bless you all abundantly

I wish you all a pleasant AGM.

Alhaji F.S. Ladapo

Chairman, Board of Directors