Annual Report 2013
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NATIONAL INVESTMENT BANK 2013 Annual Report Your Business is Our Business National Investment Bank Limited | 2013 Annual Report [email protected] 2 www.nib-ghana.com National Investment Bank Limited | 2013 Annual Report CONTENTS Notice and Agenda of Annual General Meeting 04 Corporate Information 05 Chairman’s Statement 07 Managing Director’s Statement 10 Prole of Board of Directors 12 Report of Directors 16 Financial Highlights 17 Independent Auditor’s Report 25 Statement of Comprehensive Income 27 Statement of Financial Position 29 Statement of Changes in Equity 30 Statement of Cash Flows 31 Notes to Financial Statements 63 Proxy Form 99 Head Oce and Branches 102 List of Correspondent Banks 104 Your business is Our Business 3 National Investment Bank Limited | 2013 Annual Report NOTICE AND AGENDA OF ANNUAL GENERAL MEETING NOTICE IS HEREBY GIVEN that the 45th Annual General Meeting of the National Investment Bank Limited will be held at the La-Palm Royal Beach Hotel, Accra at 10:00 a.m. on Thursday, 12th June, 2014 to transact the following business: 1. To receive and consider the Financial Statements for the year ended 31st December, 2013, together with the Reports of the Directors and Auditors thereon. 2. To elect / re-elect Directors 3. To approve Directors‘ Fees 4. To authorize the Directors to determine the remuneration of the Auditors. Dated this 12th Day of May, 2014. BY ORDER OF THE BOARD. Frank S. Aidoo Board Secretary NOTE: A member entitled to attend and vote may appoint a proxy who need not be a member of the Bank. The instrument appointing such proxy must be deposited at the offices of the Registrars, NTHC Limited, Martco House, No. D542/4 Okai Mensah Link, Adabraka, Accra, P. O. Box 9563, Airport-Accra, not less than 48 hours before the meeting. A proxy form is attached. [email protected] 4 www.nib-ghana.com National Investment Bank Limited | 2013 Annual Report CORPORATE INFORMATION THE VISION To be the most renowned Ghanaian bank for growth and efficiency. THE MISSION Our mission is to offer the highest-quality, customer-focused banking services to our clients and to create value for our shareholders. MANAGEMENT TEAM Managing Director : Mr. Ernest Mawuli Agbesi Deputy Managing Director : Mr. Patrick Tei Kwapong General Manager – Treasury : Mr. Emmanuel Dabi General Manager – Risk : Mr. Alex Amadu Gariba General Manager – Client Services : Mr. John Kweku Asamoah General Manager – Finance & Strategy : Mr. Theophilus Dorgbetor General Manager – Operations & Technology : Mr. Martin Amenyedzi Board Secretary : Mr. Frank S. Aidoo AUDITORS : Deloitte 4 Liberation Road P. O. Box GP 453 Accra Ghana Registered Office : 37 Kwame Nkrumah Avenue and Contact Address P. O. Box GP 3726 Accra – Ghana Swift and Website Address : SWIFT: NIBGGHAC www.nib-ghana.com Registrar : NTHC Limited ` Martco House, Okai Mensah Link P. O. Box 9563, Airport Accra - Ghana Your business is Our Business 5 National Investment Bank Limited | 2013 Annual Report [email protected] 6 www.nib-ghana.com National Investment Bank Limited | 2013 Annual Report CHAIRMAN‘S STATEMENTS INTRODUCTION Growth in Sub-Sahara Africa remained robust and is expected to accelerate to 6 percent in Valued Shareholders, Distinguished Guests, 2014, emanating from strong domestic de- Directors, Management and staff, Ladies and mand. However, spillovers from sluggish ex- Gentlemen, it is my pleasure to welcome you ternal demand, reversal of capital flows and th to the 45 Annual General Meeting of Nation- declines in commodity prices have affected al Investment Bank Limited. Another chal- the growth prospects. lenging but fruitful year has ended and it is a privilege to present to you the Annual Report THE GHANAIAN ECONOMY and Financial Statements of our Bank for the financial year ended 31st December, 2013. The above external economic developments continue to feed through to the domestic Before I proceed, I want on behalf of the economy. Board, to take this opportunity to express my appreciation to all shareholders, past Direc- The domestic economy continues to experi- tors, Management and Staff of the Bank for ence fiscal pressures, resulting from: their dedication and commitment in support- • cost-push effects from higher petroleum ing us to achieve quite impressive results in and utility prices. the year under review. • heightened inflation expectations. The year 2013 was generally a difficult one, but the Bank made some significant gains on • fiscal slippages due to slower than antici- a number of fronts, consolidating the gains pated revenue inflows in 2013. made in 2012 and recording an increase in • worsened terms of trade, and the after-tax profit of the Bank. We believe, however, that much more work requires to • significant decline in net current transfer be done in the years ahead in order to attain receipts and remittances. sustained increases in profitability, and share- holders’ value. Against the back-drop of a fragile global econ- omy, the domestic economy registered a real GLOBAL ECONOMY GDP growth of 5.9% in 2013 (down from 7.1% in 2012), while headline inflation rose to 13.50 The latest estimates by the IMF indicated a percent (up from 8.80 percent in 2012). In re- pick-up in the pace of global activity at 2.9 sponse to the inflationary pressure, Bank of percent in 2013, driven largely by the ad- Ghana revised the policy rate to 16% (up from vanced economies, with the impulse to global 15% at the end of 2012). The cedi depreciat- growth coming mainly from the United States, ed against the three major trading currencies. against weaker prospects in emerging market The annual rate of depreciation of the cedi economies. recorded in 2013 against the US dollar, Brit- Your business is Our Business 7 National Investment Bank Limited | 2013 Annual Report ish Pound Sterling and the Euro were 12.81%, GH¢95.0 million in 2012. The correspond- 14.88% and 16.79% respectively. ing operating expenses increased by 32.1% to GH¢61.2 million from GH¢46.3 million in THE BANKING SECTOR the previous year. Credit impairment losses continued to plague the fortunes of the bank The Ghanaian banking sector continued to as total provision for the year amounted to experience stiff competition, especially in the areas of deposit mobilization, new product GH¢26.1 million compared to GH¢37.3 million development and service delivery channels. in 2012 as the cleaning of the Bank’s books continued. In spite of this, the Bank recorded Bank of Ghana has also stepped up its reg- a profit after tax for the year 2013 of GH¢38.5 ulatory efforts because of the emergence of million, an increase of 231.1% over 2012 perfor- many microfinance institutions. mance of GH¢11.6 million. In response to the upsurge in inflation, Trea- The balance sheet of the Bank also continued sury bill rates moved up. Lending rates, how- to strengthen as shareholders’ funds grew ever, have not changed as would have been by 184.8% to GH¢285.4 million by the end expected. The yield on the 91-Day Treasury of 2013 compared to GH¢100.02 million at bills closed the year at 19.22%. the end of 2012. Total Assets, grew by 35.7% Total assets in the banking industry grew by from GH¢876.9 million at the end of 2012 to 33.3% from GH¢27.2 billion in 2012 to GH¢36.2 GH¢1,189.9 million at the end of 2013. The billion at the end of 2013. Most banks focused growth was due largely to the 8.4% growth in on growing quality assets in response to the total deposit liability from GH¢700.5 million introduction by the Central Bank of stringent at the end of 2012 to GH¢759.2 million at the risk-based banking supervision. end of 2013, and revaluation of equity shares in Nestle Ghana Ltd. Similarly, total deposits of the banking indus- try grew by 14.8% from GH¢20.3 billion at the DIVIDEND end of 2012 to GH¢23.3 billion at the end of 2013. The industry registered an overall aver- The Directors are proposing that the payment age non-performing loans ratio (NPL) of 12% of dividends out of the profit realised for the in 2013 as compared to 13.6% in 2012, while year ended December 31, 2013 be shelved for the average Capital Adequacy Ratio declined now until the income surplus account be- marginally to 18.45% at the end of 2013 from comes positive in accordance with statutory 18.6% at the end of 2012. requirement and best practice. NIB’S OPERATING RESULTS CORPORATE SOCIAL RESPONSIBILITY For the fourth year in succession, the Bank The Bank continued to live up to its responsi- achieved very impressive operating results. bility as a good corporate citizen by assisting Total operating income for the year increased various organizations and supporting various by 38.3% to GH¢131.42 million in 2013 from causes. The year 2013 was no exception as [email protected] 8 www.nib-ghana.com National Investment Bank Limited | 2013 Annual Report several worthy causes were supported finan- for further competitiveness and to take ad- cially and otherwise. Some organizations and vantage of the emerging improved business corporate bodies that benefitted during the environment. The Bank’s strategic plan aims, year under review include the Ghana Heart among others, to enhance the recovery of Foundation, Graft Foundation, Kpando En- loans against which full provision have been dowment Fund, Ghana Red Cross Society, made, ensure the provision of quality service Commissioner of Police/CID and Obuasi Mu- to clients, enhance deposit mobilization, pro- nicipal Assembly.