Nigerian Police Bank reports N639mn Profit for 9M period, 16.5% down YoY

NPF Microfinance Bank Plc (NGX: NPFMCRFBK) has reported a N639.16 million profit for the period ended 30th September 2022. The reported profit is 16.58% lower than the profit it reported for the same period in 2021.

The Nigerian Police bank had released its Quarter 3 Financial Statements to the Nigerian Exchange Limited, and it shows that despite the growth in the bank’s gross earnings, a greater increase in the administrative and general expenses condemned the bank to negative growth in profit.

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Analysis of Statement of Profit or Loss and Other Comprehensive Income

Gross earnings: The gross earnings for the period in review went up by 8.93%, going from 4.33bn reported in 9M 2021 to N4.72bn.
Interest Income calculated using the effect interest: Te bank recorded 7.34% growth in its interest income, going up from N3.86bn to NN4.15bn. Most of the interest income came from Loans and advances to customers, where the bank earned N3.96bn (9M 2021: N3.82bn). Treasury bills, call accounts and money market placements brought in N56.79mn, N108.99mn and N23.25mn respectively. A total of N533.92bn was booked as interest expense, the most of it being N254.30mn spent on term deposits.
Fee and commission income: There was a 13.73% increase of the bank’s fee and commission income. It brought in N497mn in the 9 months, against N437mn it brought in over the same period in the preceding year. While N388.21mn was from credit-related fees and commission, N109.65mn was from deposit-related fees and commission.
Personnel expenses: The bank’s personnel expense went up by 6.08% to N1.48bn, from the N1.39bn it spent in the preceding year. All but N71.92mn was spent on wages and salaries.
Administrative and general expenses: The administrative expenses of the bank shut-up by 36.43% to N1.56bn. In the preceding year, the company spent only N1.15bn on the same item in the preceding year. Repairs and maintenance cost, vehicle and generator running cost, office expenses and computer expenses all saw significant increases.
Profit before tax: NPF Microfinance bank posted a profit before tax of N852mn, 16.55% lower than the N1.02bn it reported in 9M 2021.
Profit after tax: The profit after tax dropped from N766mn to N639mn, a 16.58% decline.
Earnings per share: 12kobo (9M 2021: 34kobo)

Analysis of Statement of Financial Position

Cash and cash equivalents: NPF Microfinance bank had N10.04bn as cash and cash balances as at 30 September, 2022. This is 51.94% higher than the N6.61bn cash it had as at 31 December 2021. Of this amount, N123.49mn was cash on hand, N7.91bn was current account balances with other banks, and N2.03bn was money market placements.
Total Assets: The bank’s asset was up by 10.01%, growing to N35.16bn as at 30 September, from N31.96bn it held as at 31 December 2021. Ahead of cash and cash equivalents, loans and advances to customers accounted for N21.80bn of the total assets (31 Dec. 2021: N17.44bn).
Total Liabilities: The total liabilities stood at N24.76bn, 5.60% lower than the N26.23bn liability it held as at 31 Dec. 2021. The deposits from customers rose from N16.27bn to N18.75bn.
Shareholder’s fund: The shareholder’s fund almost doubled following the creation of new shares, which ultimately boosted the bank’s share premium. The shareholders fund went up by 81.52%, from N5.73bn to N10.40bn.
Retained earnings: The retained earnings was relatively unchanged at N1.14bn.

Analysis of Statement of Cash Flow

Operating activities: N237.90mn was used in operating activities, against N6.3Bn used in the preceding year.
Investing activities: N190.88mn was used in investing activities, against N267.10mn used for the same activity in the preceding year.
Financing activities: N3.86bn was generated from financing activities, against the N2.29bn generated in the preceding year.

About the company

NPF Microfinance Bank Plc (Formerly NPF Community Bank Ltd) was incorporated on 19th May, 1993 as a Limited Liability Company under the provision of the Companies and Allied Matters Act cap C20 LFN 2004.

The bank commenced business on 20th August, 1993 at 1 Ikoyi Road Obalende, Lagos having obtained a provisional license to operate as a Community Bank on 12th July 1993 from Central Bank of Nigeria.

The Bank is engaged in the provision of banking services to members of the Police community, to poor and low income households and microenterprises of the public at large. Such services include retail banking, granting of loans, advances and allied services.

The Bank currently operates from its registered office and has thirty-seven (37) branches located at Obalende, Ikeja, Garki-Abuja, Wuse Abuja, Port-Harcourt, Kano, Osogbo, Benin, Akure, Onitsha, Sokoto, Lokoja, Lafia, Bauchi, Yola, Enugu, Kaduna, Oji River, Ibadan, Abeokuta, Ikorodu, Tejuosho, Asaba, Calabar, Aba, Aswani, Awka, Port Harcourt 2, Jos, Ilorin, Minna, Uyo, Owerri, Ekiti, Makurdi, Maiduguri and Gwagwalada.

The bank has 5.99 billion outstanding shares and a market capitalization of N9.52 billion.