Home Business CBN’s operating surplus falls by N174bn

CBN’s operating surplus falls by N174bn

by Business News Report

*Says Mint suffers N1bn loss

The Central Bank of Nigeria (CBN) operating surplus (net income) fell sharply by N174 billion to N33.8 billion in 2014. This represented 81 percent decline when compared with the N213.5 billion recorded in 2013. In the same vein, the Nigeria Security Printing and Minting Company Plc, a subsidiary of the apex bank suffered a loss of N1.54 billion in 2014.
The CBN disclosed this in its financial statements for 2014 released Friday last week.

It its summary of the statement, the CBN said, “The Net Income for the year is N35.422 billion for the Bank while the Group’s Net Income is N33.893 billion. In line with the provisions of the Fiscal Responsibility Act 2011, 20 percent of the net income of the bank ( exclusive of unrealized gain) will be credited to the retained earnings while the balance will be paid to the Federal Government of Nigeria. After considering the effects of the unrealized gains as stated in note 33a, no payments will be made to the Federal Government in the financial year.”
Analysis of the financial statement revealed that the sharp fall in the operating surplus, also referred to as the Net Income, was occasioned by 11.2 percent decline in the bank’s net operating income, and a 37 percent increase in total operating expenses.
During the year, the Net operating income of the CBN fell to N467 billion from N526.2 billion recorded in 2013. The decline in income was majorly due to loss of N285 billion income from Imparment reversal which fell to minus N1.8 billion from N283.64 billion in 2013.
Net operating expenses on the other hand rose to N433.14 billion from N315.9 billion. This sharp increase was due to 94 percent increase in Financial Sector intervention expenses, which rose to N136.96 billion, from N42.7 billion in 2013. The financial sector intervention cost comprise loans to banks for onlending to the agricultural sector, and long term loans to the Asset Management Company of Nigeria (AMCON).
The increase in operating expenses was also bouyed by 22 percent increase in Personel Expenses, which rose by N22 billion from N78.8 billion in 2013.

Mint suffers N1.5bn loss
Reflecting the declining fortunes of the Nigeria Security Printing and Minting Company Plc (NSPM), the company suffered a loss of N1.544billion in 2014
Recalled that the CBN took over the company known as The Mint in 2004. However the company has been enmeshed in one controversy or the other, majorly the theft of over N2 billion in 2013, which led to the eventual sack of its Managing Director and executive directors last year August. According to the CBN financial statement, the profitability of The Mint fell from N534 million in 2013 to a loss of N1.544 billion. This translates to decline of N1.1 billion or 189 percent.
The sharp decline in profitability was prompted by 9.3 percent decline in revenue, which fell by N1.85 billion from N19.74 billion in 2013 to N17.89 billion in 2014. This was worsened by 25 percent increase in ‘other operating cost’ which rose to N4.7 billion from N3.8 billion.

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