NPF Microfinance Bank to Raise N3.4 Billion via Rights Issue

NPF Microfinance Bank to Raise N3.4 Billion via Rights Issue

Goddy Egene

NPF Microfinance Bank Plc   is to inject fresh capital of N3.43 billion into its operations.  In a notification to stock market operators, the Nigerian Stock   Exchange (NSE) said the NPF Microfinance Bank had submitted an application for a rights issue of 2,286,657,766   shares of 50 kobo each at N1.50 per share. The rights issue would be made to existing shareholders in the ratio of one new share for every one already held.  The microfinance bank recently paid a dividend of   N114 million or five kobo per share for the year ended December 31, 2018.

The financial institution ended 2018 with a decline of 69 per cent in profit after tax. The Managing Director/CEO of NPF Microfinance Bank, Mr. Akinwunmi Lawal,  explained to the shareholders  at the 25th annual general meeting (AGM)  recently that  PAT fell to N195.7 million in 2018, from N631.89 million in 2017.

According to him, the decline in bottomline was caused by a fraud and impact  International Financial Reporting Standard ( IFRS) 9, which took effect in the accounting year under review.

However, Lawal  disclosed that part of the money involved in the fraud had been recovered, assuring  that the balance  was being  pursued through all legal means. “We are thus confident of recovering the money which has been fully provided for in the financial statements. Let me also add that it is normal to have an initial significant impact on an organisation’s financials with the implementation of IFRS 9. Subsequently we are sure that the effect in the following year will not be as impactful as this. The IFRS 9 Expected Loss Model replaces the IAS 39 incurred loss model which terminated last year December 31, 2017 by regulations. “We have immediately commenced the training of our staff on the methodology of the IFRS 9 model with a view to fortifying ourselves on the rudiment of the new regime to be better able to carry out valuation of our financial assets,” he said.

The   Chairman, NPF Microfinance Bank, Azubuko Udah, said that the year 2018 marked the end of the three years strategy which commenced in 2016,noting that   plans for the next three years, from 2019 to 2021 had been put in place to position the bank to new height in the provision of microfinance services.

According   to him, to propel this strategy,  the bank was considering it vital to recapitalize by raising more funds from existing shareholders and inviting new investors to have a stake.

 He added that the bank would also leverage on technology through alternative banking channels to increase market share significantly by growing organically, the number of her customers.

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