The Bank of Industry’s financial results and other achievements have shown the remarkable successes of its management, under the leadership of Olukayode Pitan.
This also emphasizes the management team’s resilience, as its asset base has grown beyond the N1 trillion mark. Kayode Pitan has recorded an historic achievement among Development Finance Institutions in the country.
The Bank’s Chairman, Alhaji Aliyu Abdulrahman Dikko, has also been working with the Bank’s leadership to attain the achievements recorded on the bank’s financial results.
As Nigeria’s foremost development finance institution, Bank of Industry has been at the forefront of promoting prosperity and improving the livelihood of the Nigerian people. The bank is no doubt on a mission to transform the country’s industrial sector by providing financial and business support services to enterprises.
Mr. Olukayode Pitan attributes BOI’s achievements to the collective efforts of the Board, management and staff, his predecessors, its partner banks that provide credit enhancements and the unflinching support of its majority shareholders (the Federal Ministry of Finance Incorporated and the Central Bank of Nigeria), the Federal Ministry of Finance, Budget and National Planning and its supervising ministry, the Federal Ministry of Industry, Trade and Investment with whom it has a harmonious relationship.
Experts believe that for any nation, industrialisation is the bedrock of job creation, poverty alleviation and economic growth. Bank of Industry (BOI) has lived up to its mandate of financing the country’s emerging industrial sector, by providing long-term financing and counter-cyclical loans diversified across industries, the bank plays a central role in the country’s socio-economic development.
However, the high hopes of the bank to build on these achievements and its resilience were soon to be tested in a global economic storm with strong headwinds.
According to sources, in 2020, the national economy shrank by 1.8 per cent, its most profound decline since 1983. The COVID-19 crisis drove the economic slowdown and intensified risk aversion. This was heightened by low oil prices and shrinking foreign remittances.
With economic activities grounded by COVID-19 and many businesses struggling for survival, the Bank of Industry, as a development financial institution catering to thousands of Micro, Small, and Medium Enterprises (MSMEs) as well as large enterprises, came under additional pressure because it also had to support its numerous customers to survive.
Despite these challenges, by 2022, the bank’s financial results and further achievements told the story of resilience and remarkable success of its Board and management.
The BOI continued its consistent trend of reporting appreciable growth in major financial indices on a year-on-year basis, thus consolidating its position as Nigeria’s largest and most impactful Development Finance Institution.
Gross earnings grew by 15.4 per cent to N212.96 billion in 2022 from N184.55 billion in 2021. Also, interest income improved by 21.1 per cent in 2022 to N212.96 billion from N175.83 billion in the previous year. Revenue from customer loans and investments were responsible for this growth.
Profit before tax improved by 15.6 per cent to N71.99 billion in the year from N62.28 billion in 2021. A remarkable growth in interest income and other income lines, alongside the reduction in impairment charges, facilitated this appreciable growth.
Total equity grew by 11.7 per cent to N429.83 billion from N384.85 billion in 2021, while loans and advances improved by 3.2 per cent to N805.46 billion from N780.48 billion in 2021.
By building a strong capital base, BOI today has strengthened its financial capacity to lend to the real economy. Since 2017, the balance sheet size has grown from $1.7bn to $4bn as at December 2021. During the year, the bank posted an impressive 75 percent increase in profitability to $151m from $85.8m in 2020.
Since his commencement in 2017, the leadership of Kayode Pitan has demonstrated commitment and innovativeness that has improved the bank’s fortunes.
Having a strong capital base not only means that the bank is well positioned to promote Nigeria’s industrial growth but also ensures that the bank continues to be highly rated by global rating agencies. BOI’s ability to raise funds in the international debt markets has, to a large extent, been supported by both its strong ratings and support from both the Central Bank of Nigeria and the Federal Government. Last year, Fitch affirmed the bank’s long-term issuer default rating at ‘B’ with a stable outlook. Moody also affirmed BOI’s long-term issuer ratings of B2 and changed its outlook from negative to stable.
The bank’s total assets have grown by an impressive 248 per cent between 2016 and 2022, reaching N1.71 trillion by the end of 2021 and closing at N2.38 trillion as of December 2022.
BOI has also grown its equity position by 95 per cent since 2016 – from N220 billion to N430bn ($935mn) in December 2022, exceeding the regulatory requirement of N10bn ($ 26mn) for retail DFIs.
According to World Finance, BOI has continuously worked with key partners towards improving job creation opportunities and alleviating poverty.
With over 85 per cent of loans backed by a guarantee and with aggressive recovery efforts, the Bank has historically been able to maintain a non-performing loan (NPL) rate below the regulatory threshold of 5 per cent.
A fundamental enabler of this sterling financial performance is the successful conclusion of key capital-raising transactions from the international financial market by the bank. Under Olukayode Pitan, from 2017 to date, BOI has raised over $5Billion from the international financial markets.
Regarding developmental impact, BOI disbursed the sum of N210.7 billion to 418,436 beneficiaries in the year through its direct and indirect lending platforms and through funds that it manages on behalf of its strategic partners.
The bank’s intervention programmes, which traversed several sectors and segments of the Nigerian economy, has contributed significantly to the nation’s goals of economic recovery and millions of job creation. It has also empowered Nigerian businesses, especially micro, small and medium enterprises, to remain in operations sustainably.
The Bank of Industry is the implementing agency of many government programmes. They include the Government Enterprise Empowerment Programme (GEEP) and N-Power Social Investment Programmes, under which BOI facilitated the disbursement of billions of naira.
Under the MSME Survival Fund Scheme (part of the Nigerian Economic Sustainability Plan), BOI facilitated the disbursement of the N75 billion MSME Survival Fund. To date, N66 billion ($156mn) has been disbursed to 1,258,188 beneficiaries under the scheme.
Olamide Adeniji is a member of the editorial team of TheScript Newspaper
