2007 · annual report 2007 chairman’s statement nigeria new administration in 2007, nigeria...

Annual ReportNew Beginnings 2007

Citibank Nigeria Limited

Annual Report 2007

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Annual Report 2007

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Annual Report 2007

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Our Name Change

In 2008 our bank changed its registered name from Nigeria Inter-

national Bank Limited to Citibank Nigeria Limited, thus aligning

our registered name with our brand identity - the Citi logo. The

name change will enable us to better leverage the global brand

equity of Citi - one of the world’s largest financial institutions - and

clearly identify us to our clients worldwide as part of ‘One Citi’.

Emeka Emuwa

Managing Director

Annual Report 2007

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Annual General Meeting Notice

NOTICE IS HEREBY GIVEN THAT THE TWENTY FOURTH ANNUAL GENERAL MEETING OF THE MEMBERS OF NIGERIA INTERNATIONAL BANK LIMITED WILL BE HELD AT 27, KOFO ABAYOMI STREET, VICTORIA ISLAND, LAGOS ON THURSDAY APRIL 17 2008 AT 12 NOON FOR THE TRANSACTION OF THE FOLLOWING BUSINESS:

ORDINARY BUSINESS:

1. To receive the Report of the Directors, the Balance Sheet as at 31st December, 2007 together with the Profit and Loss Account for the year ended on that date and the Report of the Auditors thereon.

2. To declare a dividend.

3. To re-elect Directors.

4. To authorize the Directors to fix the remuneration of the Auditors.

5. To elect members of the Audit Committee.

SPECIAL BUSINESS:

1. To receive the Report on the Board performance review.

BY ORDER OF THE BOARD

OLUSOLA FAGBURE

Company Secretary

Dated this 18th day of March 2008

27, Kofo Abayomi Street

Victoria Island, Lagos

NOTE

A member of the Company entitled to attend and vote at the above meeting is entitled to appoint a proxy to attend and vote instead of him and such proxy need not also be a member. A form of proxy is enclosed and if it is to be valid for the purposes of the meeting, it must be completed and deposited at the registered office of the Company not less than 48 hours before the time for holding the meeting.

Annual Report 2007

6 | Emeka Emuwa Managing Director

Funmi Ade-Ajayi Chief Operating Officer

PRODUCTS AND CUSTOMERS

Munir S. Nanji Global Transactions Services

Kaleem Rizvi Corporate Bank

Emeka Okonkwo Commerical Bank

Akin Dawodu Fixed Income, Currencies & Commodities

SERVICE

Eddy Ogbogu Operations and Technology

Suleiman Yusuf Finance

Remi Odunlami Risk Management

Franklyn Bennie Compliance

Olusola Fagbure Company Secretary & Legal

Omayuli Wale-Ajayi Human Resources

Ogochukwu Sylvia Ekezie Public Affairs

Management Committee

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Annual Report 2007

2007 In Perspective

Our New Head Office

2007 was a landmark year

for your bank. After 24 years,

the bank finally opened and

moved into its brand new

head office building on Kofo

Abayomi Street, in Victoria

Island, Lagos.

This momentous occasion

which most of you witnessed

at the opening ceremony on

September 17, 2007, not only

marks a major milestone for

the bank, but also further reaf-

firms the bank’s commitment

to ‘planting deeper roots’ here

in Nigeria and doing business

here for the long term.

The facilities and infrastruc-

ture of the new building are

unrivalled and we finally have

a head office that is a true

representation of our brand

and of which each of us can

be truly proud.

I would like to once again

thank the Executive Governor

of Lagos State, Mr. Babatunde

Raji Fashola, SAN, the Oba

of Lagos, Oba Rilwan Akiolu

II, the former Head of State,

Chief (Dr.) Ernest Shonekan,

and other dignitaries as well

as our customers, friends

and former colleagues who

showed us great support at

the opening ceremony.

Chairman’s Statement

Ladies and Gentlemen:

I am very pleased to welcome you to the twenty-fourth Annual

General meeting of your Bank, Nigeria International Bank Lim-

ited and to present to you, your Bank’s financial statements,

for the year ended 31st December 2007. Before I present the

report, permit me to share some perspectives of the past year

with you.

Chief (Dr.) C.S. Sankey

Chairman

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Annual Report 2007


Global

Financial Markets Turmoil

2007 was a very challenging

year for the global financial

markets. Following the steep

drop in market valuations of

U.S. mortgage-backed securi-

ties from the middle of the

year, global markets entered

a phase of heightened un-

certainty. This subsequently

had spill-over effects in other

areas of the global economy

and was reflected in increased

levels of volatility in the equity

and bond markets, commod-

ity prices and exchange rates,

particularly in the latter part

of the year. The global finan-

cial markets therefore ended

the year on a much more

unpredictable note. It is antici-

pated that this turmoil which

has resulted in much credit

and liquidity tightening within

the financial markets, is likely

to continue through much of

2008.

By the last quarter, the top

US Wall Street banks includ-

ing Citigroup were reporting

significant write-downs to

correct the valuations of their

mortgage-backed and other

exposures. Several firms in-

cluding Citigroup took cor-

rective actions to strengthen

their capital positions. As

at 31st December 2007,

Citigroup held Total Assets

of $2.2 trillion and reported a

Net Income of $3.6 billion for

the full year 2007. With a new

CEO in position, Citigroup has

repositioned its global fran-

chise in 2008, to ensure bet-

ter management of the firm’s

capital and risk resources for

improved efficiency, profit-

ability, stronger client-focus

and future growth. Important

emerging markets like Nigeria

will continue to receive its

close attention and support.

Notwithstanding the increased

volatility, impact on developing

economies had been relatively

less severe. Aggregate growth

in developing countries con-

tinues to be relatively strong,

reflecting improved funda-

mentals in many countries,

sizable revenues from com-

modity exports and continued

access to international finance

at moderately higher cost.

However despite some resil-

ience demonstrated by the

global economy, risks continue

to exist in the coming year.

Increased volatility, tighter

credit conditions and increased

risk of a US recession, have

made some emerging market

economies more vulnerable to

financial disturbance, particu-

larly those which hold large

current account deficits, have

fixed exchange rates, or pos-

sess domestic banking sectors

with vulnerability to the inter-

national markets.

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Annual Report 2007


Global Economic Growth

Global economic growth in

2008 is expected to moder-

ate down to around 3.3%

due to higher costs of capital

and tighter credit and liquid-

ity levels. Emerging market

economies are forecast to

grow much faster than the

OECD countries, with devel-

oping countries forecast to

grow at approximately 5.7%

(excluding China and India).

2008 global economic growth

will be affected by the turmoil

in financial markets high-

lighted above, and its levels

will be less predictable than in

previous years, being subject

to several volatile variables.

Various factors such as global

financial availability, capital

flows, commodity prices and

foreign exchange rates, are

now relatively more difficult to

forecast than in the past

OECD Countries

In 2008, it is anticipated

that weak domestic demand,

volatile financial markets and

the continued credit crunch,

would keep US GDP growth

below 2%. Europe had in

2007, experienced relatively

higher levels of growth, and

the Japanese economy wit-

nessed some stronger signs in

the last quarter of 2007, but

weaker US demand will con-

tinue to affect these markets

through 2008, and it is an-

ticipated that European GDP

growth will drop slightly to

2.1%, whilst Japan is expected

to ease down from 2% overall

in 2007, to 1.8% in 2008.

Emerging and Transition

Economies

China and India are expected

to remain important engines

of growth for the world

economy, though some soft-

ening in US demand might

have certain modest effects.

Within the emerging markets,

the Russian, Middle Eastern,

and Asian economies are also

expected to maintain strong

levels of growth in 2008. The

extent to which stronger de-

mand from these economies

would assist to offset weaker

growth within the US and the

other OECD countries, would

drive the aggregate growth

of the world economy. Growth

in the emerging economies

would continue to boost

energy and commodity prices

“ Closer to home, growth in Sub-Saharan

Africa (SSA) is anticipated to remain

robust through 2008.”

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Annual Report 2007


and to fuel capital accumula-

tion by resource-rich coun-

tries.

As stated above, 2007 also

witnessed record highs expe-

rienced by certain commod-

ity prices, many of which are

forecast to continue through

2008. Vegetable oils and

grains (particularly wheat),

rose steeply through 2007

resulting in an overall 15%

increase in the World Bank

index of agricultural prices

and a 20% rise in food prices

across the board. Oil prices

also attained further record

highs of over $100 per bar-

rel in November 2007, and

remained strong throughout

the last quarter, driven by

relatively higher demand of

the strong-growth emerging

economies with no corre-

sponding increases in produc-

tion levels by OPEC.

Africa

Closer to home, growth in

Sub-Saharan Africa (SSA) is

anticipated to remain robust

through 2008. SSA GDP is

forecast to grow by 6% p.a.

through 2007-2009, notwith-

standing slower demand from

the United States and Europe.

SSA GDP grew strongly in

2007 and is anticipated to end

the year at 6.1% as a whole.

These growth levels in SSA

have largely been driven by

the much improved economic

fundamentals of the African

economies. Global commodity

demand and prices in 2007

were higher than in previous

years (driven by the strong eco-

nomic expansion and demand

of China and other emerging

market growth economies).

Sub-Saharan oil exporting

economies were also able to

benefit from historic petro-

leum prices in 2007.

Generally the improved macro-

economic stability of the SSA

region, with freer exchange

rate markets and more stable

levels of inflation also encour-

aged higher levels of domes-

tic and foreign investment.

Debt relief across the region

in recent years has also freed

up budgetary resources for

investment in infrastructure

and social programs such as

education and health. There

has been a common trend

across the SSA economies

with increased capital spend-

ing focused on key sectors

such as telecommunications,

transport and construction.

It is anticipated that these

trends will continue through

2008, though inflation will be

a factor to watch.

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Annual Report 2007


Nigeria

New Administration

In 2007, Nigeria witnessed a

successful change in govern-

ment to that of President Um-

aru Musa Yar’Adua. The new

administration outlined its

Seven-Point Plan, which places

priority focus on the following

sectors: Power & Energy; Food

Security & Agriculture; Wealth

Creation & Employment; Mass

Transportation; Security; Land

Reform and Qualitative &

Functional Education, whilst

maintaining a continued focus

on the situation in the Niger

Delta, poverty reduction and

the fight against corruption.

The new administration also

signalled its intention to

continue with the economic

reform momentum of the past

administration, particularly as

spelt out by the National Eco-

nomic Empowerment and De-

velopment Strategy (NEEDS)

program.

Macro-Economic Outlook

The macro economic outlook

continued to be positive for

Nigeria and the country closed

the year with a very strong

balance sheet. High oil prices

and strong external reserves

boosted the economy whilst

the policies of the government

remained focused on the main-

tenance of macroeconomic

stability and sustainable eco-

nomic growth. These policies

and trends are expected to

be sustained through 2008.

Nigeria maintained a strong

external position as at the end

of 2007, with reserves in excess

of $50 billion and a healthy cur-

rent account surplus at 6% of

GDP, which is expected to rise

to over 9% of GDP in 2008.

Nigeria’s External Debt at $6

billion remains very modest

compared to previous years,

and represents less than 5%

of Nigeria’s GDP, the lowest of

any of its peer nations.

Nigeria International Rating

Affirmed in 2007

In March 2007, the interna-

tional credit rating agencies

of Fitch and Standard & Poors

affirmed the Federal Republic

of Nigeria’s long term foreign

and local currency Issuer

Default Ratings (“IDR”) of

BB-, both with a Stable Out-

look. The rating agencies

confirmed Nigeria’s very

strong and improving finan-

cial ratios, reform progress

and robust growth driven by

the non-oil sector. However

these were balanced against

significant developmental

challenges: structural and

institutional weaknesses, in-

adequate infrastructure and

risks and uncertainty related

to the presidential elections

as well as the situation in the

Niger Delta.

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Annual Report 2007


At BB- Nigeria’s rating peers

include countries such as

Indonesia, Turkey, Ukraine,

Venezuela and Vietnam.

Monetary & Fiscal Policy

In 2007, the Central Bank of

Nigeria (CBN) continued with

the implementation of its

“Financial System Strategy

(FSS 2020)” commenced in

previous years. These reforms

have resulted amongst others,

in swifter access to credit for

the private sector and growth

in longer-tenor capital. Ad-

ditionally, the CBN achieved

its reserved money and broad

money targets and retained

inflationary pressures down

within single digits (at ap-

proximately 7.2%) at the end

of 2007. On the exchange rate,

the CBN continued its drive to

ensure stability of the Naira,

with 2007 witnessing an 8%

appreciation in the Naira. The

CBN has signalled its inten-

tion to continue with these

reforms by continuing to en-

courage a full liberalization of

the foreign exchange market,

continued focus on inflation

and the efficient management

of Nigeria’s external reserves.

As a result, foreign interest in

the Nigerian market continues

to evolve.

The benchmark Monetary Pol-

icy Rate (MPR) was changed

during three of the six bi-

monthly meetings held, with

noticeably greater rate vola-

tility during the second half of

the year. The MPR ultimately

closed at 9.5% for the year.

Monetary policy in the coming

year will be dominated by the

CBN’s response to inflation.

Results

The performance of your

bank during the financial year

under review was impressive;

notwithstanding the non

repetition of certain epi-

sodic income items of about

N1.5billion reported for the

financial year ended 2006.

The bank recorded gross

earnings of N17.3 billion for

the financial year under con-

sideration. This represents a

5% increase over N16.5 billion

reported for the 2006 finan-

cial year.

Net interest margin stood at

N9.0 billion for the financial

year ended December 2007

compared to the reported

figure of N9.6 billion for the

year 2006

Profit after tax for the year

ended was N7.0 billion, com-

pared to the reported figure of

N7.7 billion for the year 2006.

| 13

Annual Report 2007


Total Assets and Contingent

liabilities of the bank grew to

N194.7 billion as at December

31st 2007, from N141.3 billion

in 2006. Shareholders funds

also rose to N35 billion, re-

flecting a growth of 4% over

the 2006 position of N33.8

billion.

Adjusted for the non-recurring

items, our core business grew

by 15%.

All these amply demonstrate

that 2007 was a successful

financial year for our bank.

2008 Outlook

In 2008 it is expected that

the country would be able to

sustain its impressive pace of

growth and build upon the re-

markable improvement in its

external and public balance

sheets. To sustain the coun-

try’s economic momentum,

the challenge for the new

administration remains effi-

cient implementation of poli-

cies designed to strengthen

and encourage the business

environment. Focused and

result-driven investments are

required into the country’s

energy and infrastructure

stock and are considered a

key precursor for sustaining

future growth in the economy.

Oil prices are forecast to re-

main relatively high. However,

Nigeria’s sustained oil pro-

duction levels will depend on

this administration seeking

lasting solutions to the Niger

Delta crisis.

Nigeria is forecast by the World

Bank to grow by 7.2% in 2008

with strong contribution again

expected from the non-oil

sector which witnessed close

to 10% growth in 2007 and

remains a strong driver for the

economy. It is anticipated that

investment should continue to

flow into the energy, commu-

nications, trade, financial and

other services and construc-

tion segments of the economy,

which all witnessed significant

growth in 2007. However, con-

tinued focus on the manufac-

turing sector of the Nigerian

economy is required, if non-oil

growth is to reach its full poten-

tial with stronger contribution

from this segment. This and

other sectors of the Nigerian

economy currently do not per-

form to their full potential due

to lack of a coherent enabling

environment, very low levels

of electricity supply and weak

infrastructure.

14 |

Annual Report 2007


It is heartening to note that

this administration has stated

its willingness to address

these weaknesses in its Seven-

Point Plan.

Within the context of a grow-

ing economy and focused

policy implementation, it is

anticipated that there would

continue to be strong growth

within the business environ-

ment in Nigeria. Significant

capital investments are there-

fore anticipated in such strate-

gic segments of the economy

as listed above. Your bank

continues to ensure that it is

positioned to take maximum

advantage of these opportuni-

ties as and when they present

themselves.

The Bank

In addition to the move into

the new head office building,

there were some personnel

changes in the bank.

Within the course of the

year, the Deputy Managing

Director Mr. Dele Babade and

Mr. Ebenezer Olufowose, an

Executive Director, left the

bank to pursue other career

opportunities. I am sure you

will join me in thanking Mr.

Babade and Mr. Olufowose for

their contributions to NIB and

Citigroup, and to wish them all

the best in the future.

In January 2008, Funmi Ade-

Ajayi joined your bank and

her appointment as Chief

Operating Officer and Execu-

tive Director with responsibil-

ity for the Public Sector, has

been approved by CBN. Miss

Ade-Ajayi has had a distin-

guished 10-year career within

Citigroup. Her last position

was as Managing Director

of the Citigroup franchise in

Gabon.

In addition, Mrs. Remi Odun-

lami, Mr. Eddy Ogbogu and Mr.

Munir Nanji, were also con-

firmed by CBN as Executive

Directors of your bank. I am

convinced that the addition

of these distinguished profes-

sionals to our Board of Direc-

tors will serve to strengthen

our board level deliberations.

Finally, on behalf of the Board

of Directors and our fellow

Shareholders, I wish to thank

our valued customers for their

continued patronage and sup-

port which resulted in another

year’s laudable performance.

We look forward to being of

greater service to you, in the

years to come.

I also wish to express our deep

appreciation for the zeal and

commitment of the Manage-

ment and Staff in achieving

an excellent financial and

| 15

Annual Report 2007


operating performance during

the year. I thank them most

sincerely for their contribu-

tions to our growth.

Lastly, my sincere thanks go

to my fellow members of the

Board of Directors of our

Bank for their constant and

continued support and total

commitment to the progress

of our bank.

Thank You

Chief (Dr.) C. S. Sankey

Chairman

Annual Report 2007

16 |

Business Reports

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Annual Report 2007

Global Transaction Services

The Citi® Global Transaction Services [GTS] business is a lead-

ing provider of a broad range of cash management, trade and

securities services to corporate clients and financial institu-

tions around the world. We leverage our vast network in over

100 countries and our experience to enhance our customers’

businesses through an array of world-class products, services and electronic banking solutions.


GTS embeds the Citi® global

strategy by working with cli-

ents and regulators in the Ni-

gerian banking environment.

Our vision is to be the best

in class by providing superior

efficiency and cutting edge

solutions co-innovated with

clients while demonstrating

thought leadership in every

aspect of domestic and cross

border flows.

GTS Nigeria comprises three

core pillars; Products [Cash

and Trade], Service and Im-

plementation. These are sup-

ported by a solid information

technology back bone and

business discipline as well as

a team of solid professionals

who are heavily exposed to

both the Citi® culture and the

Nigerian market. This places

our organization as the best

GTS bank in Nigeria.

We generated strong mo-

mentum this year evidenced

by the 25% overall growth

in revenues in the entire GTS

business. Our cash manage-

ment and trade businesses

maintained their status as the

leading business in the Sub

Saharan region and the larg-

est business in the Europe,

Middle East and Africa region

respectively.

Munir S. Nanji

Head, GTS

Global Transaction Services Team

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Annual Report 2007

Cash Management

Cash management is the family of products and services pro-

vided by the bank that help the customer handle their account

operations, their collections, payments, account reconciliation,

and short term liquidity/investments.


We continued to use tech-

nology to deploy products

that meet our customers’

requirements, and increase

our collections and payments

networks. The improvements

in the payment infrastructure

in the country also aided our

deployment of new products.

Payments

Consistent with our drive to

bring convenience and ef-

ficiency to the operations of

our clients, we implemented

Real Time Gross Settlement

[RTGS] on our electronic bank-

ing platform CitiDirect®. Our

clients can now access all

our payment products on the

same front end, enabling them

to achieve payment efficiency

using our award-winning Citi-

Direct® platform.

We organized seminars to

show case the capabilities of

CitiDirect® in bringing effi-

ciency to payments process-

ing and cost effectiveness.

We continue to drive improve-

ments in the financial sector

by participating actively in the

various committees set up by

the Central Bank of Nigeria to

drive the achievement of the

objectives of Vision 2020 for

the Payments System.

Collections

Our cash management team

demonstrated thought leader-

ship by being the first bank in

Emmanuel Umukoro

Head, Cash Management

Annual Report 2007

| 19


Nigeria to have direct debits

which can be initiated by the

customer on our electronic

banking platform CitiDirect®.

Our drive to extend our col-

lections network was further

boosted in 2007. We suc-

ceeded in leveraging on

technology to provide the

same value on collections

irrespective of channel used

[our branches or the branches

of our correspondent banks].

This innovation allows our

customers immediate access

to information about deposits

made into their accounts

across our correspondent

partner’s counters.

In 2007, our team was also the

first to successfully implement

the Electronic Check Deposit

Product (Check 21) in Nigeria

showcasing our competence

in servicing both corporate

and financial institutions. The

product leads to expedited

clearing of US Dollar checks

and increased process ef-

ficiency as it eliminates the

manual intervention previous-

ly required thereby position-

ing us to achieve unmatched

clearing transit times in the

Nigerian market today.

We also launched our Post-

Dated Cheques Collection

product, which enables our

customers to warehouse their

post-dated cheques with us,

as they collect them from

their own customers. Further

to this, we are now an active

participant in the collection

of statutory taxes and utility

bills. We are a collecting bank

for PHCN and FIRS, and other

utility companies including

telecommunication providers.

Liabilities/Liquidity

Management

During the year we also

launched Treasury Vision, a

tool that enables corporates

to manage their cash and

treasury needs from one

portal. This simplifies the la-

borious process of obtaining

the balances and transaction

information in their various

accounts across the globe,

and enables the treasurer

have full visibility and control

over account information.

Annual Report 2007

20 |

We launched our Supplier Fi-

nance Program in 2007 with

the supplier-centric proposi-

tion focused on Account Re-

ceivable Financing. This prod-

uct is available to suppliers

of multinational companies

whose confirmed invoices are

discounted while they await

payment from their princi-

pals. This would be followed

soon with the buyer-centric

proposition which aims to

offer payable discounting to

multinational companies. This

would enable these compa-

nies negotiate more favorable

supply terms. In line with the

phenomenal growth being

experienced in the Telecom-

munications sector, we also

developed a Telecoms Dealer

Finance Program. This pro-

gram offers multiple choice


Trade Products

Trade services and finance had an exciting year in 2007. While

the economy recorded growth, the liberalization of the Foreign

Exchange environment in the country complemented growth

and encouraged trade flows. With increasing flow of Foreign

Direct Investment [FDI] into Nigeria and domestic flow occa-

sioned by strong oil prices, Trade product was well positioned to take advantage of these flows,

delivering value added products to our clients. Leveraging on Citi’s global reach we were able to

structure significant Cross border Trade deals for our key clients in the Oil and gas, telecommu-

nications and Financial service sectors doing business with counterparties in Europe, USA, Asia,

Africa and the middle East. Our product offering covers Structured Letters of Credit, guarantees

and specialized trade structures. With these offerings we recorded landmark deals with our

clients in the fast moving consumer group and the Oil and Gas sectors in 2007. Significant

accomplishments in the year included a cross border trade finance structure for one of our key

clients and structured trade deal in the oil and gas sector.

Segun Adaramola

Head, Trade Products

Annual Report 2007

| 21


financing options to selected

dealers of telecoms operators

in Nigeria.

A major service initiative

taken by Trade product during

the year was the Platinum

Trade Service initiative. This

initiative provides exceptional

quality service delivery to top

Trade clients of the banks. This

is a first class service initiative

that has led to increase in

customer satisfaction and in-

creasing transaction volume.

The unit closed the year with

a Trade Day event where top

trade customers of the bank

were hosted to a “thank-you”

event. The event also gave us

the opportunity to get useful

feedback from our customers

as well as discuss our new

product offerings. For Trade

product, 2007 was a suc-

cessful year. Thanks to all our

customers who made all the

difference.

OUTLOOK FOR 2008

In 2008 we intend to remain the foremost trade business in Nigeria and Sub-saharan Africa delivering

innovative trade solutions to our target market. We would focus on emerging trade flow from Asia into

Nigeria in addition to trade flows from traditional sources such as Europe and the United States of

America, leveraging on our global reach and local expertise. We also plan to optimize the use of technol-

ogy as a platform for product delivery and ensure service excellence.

“ Significant accomplishments in

the year included a cross border

trade finance structure for one of

our key clients and structured deal

in the oil and gas sector.”

Annual Report 2007

22 |

Electronic Banking &

Implementations

Our award winning global

platform, CitiDirect® remains

unique in the industry for its

reach, interoperability and

flexibility. It is a sophisticated,

user-centered interface of-

fering our Clients global

access on a uniform software,

to securely process domestic

and cross-border transactions,

straight-through, for enhanced

operational efficiency, and real-

time access to information.

In 2007, monthly payments

processed on CitiDirect® in

Nigeria remained strong,

proof of increased customer

confidence. Further to this, for

the 6th year running, in 2007,

Global Finance announced

Citi® as the best Corporate /

Institutional Internet Bank in

Nigeria, and in various other

countries in EMEA.

In 2007 we continued to build

on the successes of last year,

leading to an exponential

increase in clients actively

using electronic banking and

increase in payments volume

and value processed via CitiDi-

rect by over 100%. During the

year Nigeria was consistently

in the top 10 countries in ef-

fective CitiDirect® usage - yet

another endorsement from

our clients.

We held a Payroll Seminar and

an Electronic Baking Univer-

sity event both of which have

resulted in increased usage

of our products and have led

to the first “dividend” pay-

ments using Paylink cheques

being processed for one of

our clients. More Clients have

also started using CitiDirect®

actively for Duty Payments

and Trade.

During the year, client transac-

tions also doubled on the back

of increased client usage both

on the corporate and the fi-

nancial institutions segments.

This was further boosted by

our teams successful integra-

tion of the client’s processing

system with CitiDirect® such

that transactions processed

on their back-end system are

automatically imported to

CitiDirect®.


Client Delivery

Client Delivery consists of Client Service [Citiservice], Imple-

mentations and Electronic Banking. We are committed to deliv-

ering consistent client satisfaction, providing global coverage

with regional and local expertise, and building strong client relationships.

Bola Osagie

Head, Client Delivery

Annual Report 2007

| 23


CitiService

CitiService a special concept

created by the bank for its

clients, makes the difference

between Nigeria International

Bank and other banks on the lo-

cal market. It provides a single

point of contact where highly

trained professionals are com-

mitted to handle all customer

inquiries. Citiservice is dedi-

cated to providing quality after

sales service to the customers,

acts as a key link between the

customers and other units

within the bank and represents

strong management commit-

ment to continuous process

improvement and customer’s

satisfaction.

Our People

In June 2007, management’s

commitment to quality service

was further demonstrated with

the launch of the CitiService

Representative [CSR] of the

month award created to en-

hance productivity and boost

morale. This has yielded favor-

able results as demonstrated

in the overall improvements

in service quality which are at-

tested by client feedback and

are recognized offshore with

one of our customer service

representatives also receiv-

ing recognition as one of GTS

Europe Middle East and Africa

Client Delivery Top 100.

Ijeoma Iro [pictured left] was

awarded the CSR for the

month in July, August and No-

vember of this year. Due to her

customer focused attitude and

consistent understanding of

the customers’ needs, Ijeoma

was also crowned CSR of the

Year 2007.

Our Commitment to Service

In 2007, Citiservice also demon-

strated leadership and continual

improvement in service quality

which peaked from August to

December with 17 consecutive

weeks with of the highest cus-

tomer satisfaction index. This

means that all clients calling

the bank for assistance were

“ CitiService a special concept created

by the bank for its clients, makes the

difference between Nigeria Interna-

tional Bank and other banks on the

local market.”

Ijeoma Iro

Annual Report 2007

24 |


attended to by our represen-

tatives with the highest level

of professionalism, efficiency

and service. This client sat-

isfaction index exceeded the

prescribed global standards

in the Europe Middle East and

Africa [EMEA] region and at-

tests to the tenacity and team

spirit that is the trademark of

the CitiService team at Nigeria

International Bank.

We Listen…We Hear…

We Act

In response to the feedback

received in the Customer

Satisfaction Survey, we also

extended service hours and

enhanced our problem resolu-

tion mechanism to ensure that

our client’s needs are attended

to with speed and efficacy.

OUTLOOK FOR 2008

In 2008, our paradigm remains unparalleled as we steer through the dynamic challenges and opportuni-

ties in the market place. We’ll continue to onboard new transactions services and business even as we

continuously upgrade technology innovations with no compromise to service quality bearing in mind that

the convenience of our clients remains at the forefront in our product innovation and delivery strategy.

As Nigeria continues to place its mark in the global market place and with the growing influence the

emerging markets [China/India] will have on the global economic landscape our strategy will evolve

to encapsulate these new transaction flows. We remain confident to maintain our leadership in global

transaction services.

Annual Report 2007

| 25

As reported last year, compe-

tition continues to intensify in

all segments of the banking

industry. NIB’s main focus

continues to be at the high

end of Corporate Finance and

Investment Banking. As the

economy continues to grow

and our client needs become

more sophisticated, NIB has

stayed ahead of the competi-

tion by successfully leverag-

ing our global knowledge and

execution capabilities to help

our clients undertake complex

projects which require advi-

sory, structuring and capital

raising skills. In this vein, we

are pleased to say that NIB

is playing its due part in con-

tributing to the growth in the

Nigerian economy by leading

and assisting in a number of

key deals in the industry.

2007 Overview:

2007 marked another land-

mark year in the evolution of

the Nigerian banking system

as well as the economy. Post

capitalization, banks contin-

ued to access local as well

as international debt and

equity capital markets to

fortify their balance sheets

and position appropriately for

enhanced competition. With

the elections in the first half

of the year, economic activity,

especially, investment deci-

sions related to large projects

in key sectors like oil and gas,

showed a slow down.

At the same time, during the

first half of the year, we saw

land mark transactions like

the US$ 1.4 billion refinanc-

ing of Celtel Nigeria Limited,

a subsidiary of MTC Kuwait.

This deal was underwritten

and executed by Citi Corpo-

rate Finance teams in London

and Lagos.

In the Energy segment, we

continued to work with our

key clients, engaging in pro-

active dialogue and providing

solutions to help meet their

strategic objectives. We con-

tinue our strong focus on all

Corporate Bank

Business Objectives

The NIB Corporate Bank and Corporate Finance Group provides

high end, value added products and services to customers in

a number of strategically important segments of the Nigerian

economy. We offer a broad range of products including Corporate Finance, Fixed Income and

Investment Banking services, Transaction Services (Cash Management and Trade Products) and

routine working capital finance.

Kaleem Rizvi

Head, Corporate Bank

Annual Report 2007

26 |

Corporate Bank

segments within the oil and

gas industry with special em-

phasis on increasing presence

in the upstream segment as

well as supporting the Nige-

rian Local Content initiative.

OUTLOOK FOR 2008

Given the sustained improvements in Nigeria’s economic fundamentals as well as continued high oil

prices, the positive trends towards investments in various segments continue. These key segments

include oil and gas, telecoms, infrastructure projects like cement, steel and aluminum as well as packag-

ing. Continued growth in these sectors, which also reflect the underlying strength of the economy and

gradual improvements in consumer buying power, also bodes well for future business opportunities.

2008 is expected to throw up new challenges in the local and international banking environment, as

well as considerable opportunities. Accordingly, appropriate structuring, returns and a strong focus on

risk management would be key towards not only successfully executing major deals, but also to ensure

sustained performance in future.

Working with our product partners across cash, trade, treasury, corporate finance and investment bank-

ing, our objective continues to be trusted advisors to our clients, be their first port of call and to ensure

that we deliver the best possible products and services to them.

Along with our clients who remain highly supportive of NIB, the Corporate Bank and Corporate Finance

teams remain our single most important asset and as always we continue to look at new ways to retain

and develop their skill base, so as to ensure that we can take advantage of new opportunities and chal-

lenges in the market to deliver on our shared goals.

Corporate Bank Team

Annual Report 2007

| 27

The Global Commercial Bank

client base derives from cus-

tomers formerly housed in

the Commercial Banking Unit,

augmented by transfers from

the Corporate Bank, and in-

cludes clients of varying sizes

and complexity operating in

key sectors of the Nigerian

economy.

The product spectrum ranges

from core Trade (services

and finance), Cash and For-

eign Exchange products to

selectively applied Corporate

Finance products. The im-

minent establishment of a

Custody business in Nigeria

coupled with the ongoing

growth in the Nigerian Capital

Markets, will complement this

suite of products and enhance

our access to opportunities

within a new group of clients.

The strategic focus of the

CCB is to re-establish NIB as a

leading player in the Nigerian

Corporate and Commercial

Banking sector, providing

clients with efficiently priced

and value added products

and services that enable

them compete in their

various industries. Given the

import driven nature of the

Nigerian economy and the fit

with our product capabilities,

the trading and manufactur-

ing segment of the market

will represent an important

area of growth for us going

forward.

Our aim is to deliver world

class relationship manage-

ment services to our client

base. To this end, we will

continue to emphasise train-

ing and coaching as a means

of developing our people

and staying above the ever

increasing competitive pres-

sure in the market place. We

will continue to work closely

with our product partners to

ensure that we continuously

develop appropriate new

products and deploy them on

a timely basis, so as to retain

our position as trusted advi-

sors to our clients

Global Commercial Banking

Overview

In August 2007, the Global Commercial Banking Business

(CCB) evolved out of the former Commercial Banking Busi-

ness (CBU) as part of a global Citibank strategy to optimize

client delivery. The objective is to focus on clients whose requirements are predominantly served

by Trade and Cash products as against those with a need for structured Corporate Finance type

products, and to cover a broader spectrum of clients within the existing target market definition.

Emeka Okonkwo

Head, Global Commercial Banking

Annual Report 2007

28 |

Global Commercial Banking

Given the successful outcome

of the 2007 elections and im-

proving economic indicators,

the outlook for the Nigerian

economy in 2008 is positive;

the challenges of the Niger

Delta and the power sector,

amongst others, notwithstand-

ing. For our clients, this means

exciting opportunities in the

years to come and the CCB

Nigeria business is well posi-

tioned to support them.

“ The strategic focus of the CCB is to

re-establish NIB as a leading player in

the Nigerian Corporate and Commer-

cial Banking sector, providing clients

with efficiently priced and

value added products and services

that enable them compete in their

various industries.”

Global Commercial Banking Team

Annual Report 2007

| 29

The objectives of the new

group as it relates to the local

market are:

• To extend our mandates

into new asset classes and

clients

• To closely align our

enhanced product platform

with our unparalleled global

distribution footprint

This internal change mirrored

the broader evolution cur-

rently occurring in Nigeria’s

financial sector. Economic

reforms and sector liberaliza-

tion continued apace during

the year and these contrib-

uted to an improving macro-

economic environment which,

in turn, facilitated enhanced

risk taking opportunities and

revenues within the various

financial markets.

The inter-bank foreign ex-

change market continued to

deepen during the year. The

relative autonomy and ef-

ficiency of the two-way quote

mechanism has resulted in a

far more market-driven ex-

change rate than in past years.

NIB’s foreign exchange trading

capabilities are strong and

our focus in this area remains

intense. We continue to lead

various initiatives focused on

developing the skills and ca-

pabilities of market operators

as well as encouraging the

adoption of high standards of

ethical and professional con-

duct between counter-parties.

We also continue to act as one

of the conduits between the

Nigerian professional markets

and the international fund

management community as

portfolio investments in local

securities continued to grow.

Investments are now diversify-

ing to include various money

market products as well as

the traditional interest in FGN

sovereign securities.

In the securities market, the

issuance of 10 yr. FGN bonds

by the Debt Management Of-

fice (DMO) further lengthened

the government’s debt profile

Fixed Income, Currencies and Commodities (FICC)

Overview

The erstwhile Sales and Trading Group changed its name to

Fixed Income, Currencies and Commodities (FICC) during

2007. This change represents the combination of the Global

Fixed Income and Emerging Markets Sales and Trading divi-

sions, as a natural evolution toward providing an integrated

global platform best positioned to serve our clients.

Akin Dawodu

Head, Fixed Income, Currencies and Commodities (FICC)

Annual Report 2007

30 |


and deepened the secondary

market. The commencement

of the Money Market Dealer

system for Treasury Bills

in July 2007 has helped to

develop the short end of

the yield curve as well as

introducing the discipline of a

two-way quote regime to the

zero coupon government debt

market. As primary dealers in

both government securities

markets, NIB remains in the

vanguard of Treasury prod-

uct and market development

initiatives in Nigeria. As the

markets become more so-

phisticated and the products

more complex and efficient,

NIB will continue to strive to

optimally adapt international

best practices to domestic

market conditions in order

to maintain our traditional

market competitiveness and

leadership.

The development of arbitrage

and gapping skills on the

Money Market (MM) side cou-

pled with product diversifica-

tion initiatives significantly

boosted our trading capabili-

ties and revenue generation

during the past year. The

CBN’s development of the

Real Time Gross Settlement

System for interbank and cus-

tomer money market settle-

ments also, after unsurprising

teething problems, improved

the efficient flow of transac-

tions across the market. The

continuing refinement of the

new Monetary Policy Rate

(MPR) regime to better aid the

Central Bank’s implementa-

tion of monetary policy while

improving the efficiency of its

transmission mechanism to

the wider economy was also

another feature of 2007. This

made for a dynamic and fluid

money market environment

in the past year and there is

little sign that the coming

year will be any different.

In addition to the existing

products, i.e. spot FX, MM de-

posits and asset intermediation,

there is a growing pipeline of

structured/derivative deals.

We have also employed a vari-

ety of tools to drive client and

flow business acquisition. We

have continued to focus on e-

banking solutions by develop-

ing our various eCommerce

platforms which bring signifi-

cant efficiencies to customers

in terms of their transaction

execution capabilities on both

the foreign exchange and

money markets. NIB is a clear

leader in this segment of the

Nigerian financial markets.

Overall, the macro-economic

stability and growth fos-

tered by recent reforms have

created a very conducive

environment for the devel-

opment and growth of the

financial markets in Nigeria.

The outlook for 2008 is very

positive with strong economic

Annual Report 2007

| 31


expansion and greater public

transparency likely to come

increasingly to the fore. The

regulatory authorities appear

to have anticipated the likely

threats to the current benign

economic outlook and have

continually demonstrated their

willingness and ability to act

promptly to preempt these.

The NIB FICC team remains

focused on growing its market

leadership capabilities while

helping the bank to continue

to deliver superior returns to

its shareholders. To this end,

we will continue to leverage

on the global Citi brand in or-

der to ensure that Nigerian

market practices and pro-

cedures are in keeping with

international standards. Our

focus will continue to be on

our customers and on how

we can optimally align our

services and products to

their needs so our mutually

beneficial relationships are

continually reinforced.

“�We continue to lead various initiatives focused on develop-

ing the skills and capabilities of market operators as well as

encouraging the adoption of high standards of ethical and

professional conduct between counter-parties.”

Fixed Income, Currencies and Commodities Team

Annual Report 2007

32 |

The Bank’s continued success

in safeguarding shareholder

investments and guaranteeing

continued business growth is

largely supported by our ro-

bust control framework. This

continues to aid management

awareness of Operational risks

and objective evaluation of

the strength of our business

processes. Our confidence in

this was boosted by impres-

sive results in various inde-

pendent audits carried out

during the year.

Focusing on the customer in

2007, our priority was to find

innovative solutions; anticipate

needs and provide a rewarding

experience in our interactions

with them. By leveraging the

depth of cumulative experi-

ence in Operations and Tech-

nology, we took a proactive

approach to our service deliv-

ery to raise the quality bar on

various service indices. We in-

troduced customer segmenta-

tion and actively participated

in customer calls and new

business propositions, thereby

successfully redefining the op-

erations role in the traditional

service delivery business. This

has translated into efficiency

gains as we are better able to

meet customer expectations

and prioritize our resource

allocations.

We successfully completed

our new head office building

project. This is an ultra-mod-

ern premises showcasing the

best of building technology in

our continued commitment to

lead the market in innovation

as well as provide an ergo-

nomic working environment

for our employees. We took

advantage of this to revamp

our technology infrastructure

through the provisioning of a

Operations & Technology

Overview

Operations and Technology continues to be an integral and

important component of our service delivery model which

was designed to drive customer satisfaction and ensure their

continued loyalty. We provide an integrated solutions platform that supports business growth

and diversification objectives. By executing on our business goals, maximizing our resource

allocations and leveraging our competitive advantages, we consistently deliver quality service

for our numerous clients. In 2007 we have continued to improve Operations by developing our

employees and executing on our identified priorities. All these were done with an eye to our

strategic intent of placing the Customer first.

Eddy Ogbogu

Head, Operations & Technology

Annual Report 2007

| 33


state-of-the-art Data Centre,

high-performance servers with

enhanced storage capacity,

new desktop hardware, shared

service centers for repro-

graphics, world class power

and data cable management,

enhanced communications

infrastructure and services

including direct inward dialing

features. We also upgraded

the network links of 6 key

branches to higher capacities

on fiber optic cabling.

Several application upgrades

were completed to enhance

our delivery platform and pro-

ductivity. A transaction events

notification solution via e-mail

and SMS for cash and cheque

processing was deployed on

our banking application suite.

This is to meet the increasing

demand by customers for on-

line, real-time advises. Direct

Debits and Real Time Gross

Settlement (RTGS) products

were created on Citidirect

platform in addition to the

already existing products. Our

customers are able to initiate

a full range of Funds Transfer

instructions from the comfort

of their offices and homes.

We were able to integrate

incoming SWIFT transaction

notifications to achieve fully

automated backend process-

ing. This has significantly

streamlined our process and

reduced the turnaround

time on crediting custom-

ers for local and foreign

currency inflows. This and

other initiatives undertaken

in Operations are enabling us

to achieve Straight-Through-

Processing (STP) with minimal

or no human intervention in

the transaction flows. These

investments will continue to

position us as a preferred ser-

vice provider to our clients.

We continue to place a lot

of emphasis on employee

growth, development and

recognition as the quality

of human capital is integral

to our delivery framework.

“�We successfully completed our new

head office building project. This is an

ultra-modern premises showcasing

the best of building technology in our

continued commitment to lead the

market in innovation as well as provide

an ergonomic working environment for

our employees.”

Annual Report 2007

34 |


Staff members are continu-

ally trained in line with their

developmental needs and to

empower them to function

effectively. The breadth of

coverage is extensive with a

primary focus to build busi-

ness knowledge, execution,

management skills and instill

a pervasive quality culture.

We continue to develop our

people through participation

in projects and assignments

within and outside the coun-

try. Operations and Technol-

ogy staff continue to win

awards and receive “rave”

reviews for their impeccable

service delivery.

OUTLOOK FOR 2008

With the growing world interest in Nigeria following the continued improvement in economic indicators,

we expect customer service needs to grow as well. We will continue to leverage our global coverage and

operational capabilities to enrich our client experience. Our strategy is to actively listen to the Customer

by participating proactively in customer calls; seek feedback on our service delivery and thus broaden

our understanding of their needs to appropriately direct our efforts. We will achieve this through our

continued strategic partnership with the business and product teams as well as completing the various

technology initiatives that will increase our efficiency level.

Operations & Technology Team

Annual Report 2007

| 35

Diversity, Recognition

and Rewards

In 2007, NIB, as part of its

Citigroup Shared Respon-

sibilities and in particular

our ‘Shared Responsibility to

Each Other’, also maintained

various initiatives intended to

celebrate the uniqueness of

NIB Staff. In 2007 we contin-

ued to build on our Diversity

and Inclusiveness Program,

with a view to enhance career

prospects for our women

across the board. The Bank

also recognized and rewarded

excellent performance of em-

ployees, with special awards

being handed out to deserving

employees for their contribu-

tions. These awards from

within the Country, Division

and Regional offices, ensure

that we consistently recognize

individual and team perfor-

mances, some of which are

celebrated on these pages.

Human Resources

Training and Staff Development

The Bank’s strong 2007 financial performance was made

possible by the quality and caliber of our Staff, in whom we

take great pride. In a consolidating financial industry, Staff

recruitment, development and retention remained the utmost priority for the NIB HR Depart-

ment. In 2007, as part of our overall development strategy, several staff benefited from useful

developmental opportunities both within Nigeria and within Citigroup franchises all over the

world. We were also able to successfully execute a number of local and international programs

covering Management, Leadership, as well as other function-specific courses. Several organi-

zational changes were also made, in order to strengthen and empower the HR role across all

functions. NIB HR also expanded its traditional areas of recruiting in partnership with Citigroup

institutions round the world and with leading academic institutions within and outside Nigeria.

Our Management Associate (MA) and Mentoring Programs were also fully established, with NIB

playing host to various MA’s drawn from all over Africa (including Nigeria). Finally in 2007, NIB

celebrated all our staff by moving into our new Head Office Building, designed with Staff welfare

and comfort utmost in mind.

Omayuli Wale Ajayi

Head, Human Resources

Annual Report 2007

36 |

Human Resources

OUTLOOK FOR 2008

In 2008, we will continue with our Vision to celebrate our Staff as our most valued resource and to

ensure that NIB remains a great place to work. Amongst others, our 2008 priorities are to ensure that

all departments of the bank remain involved in integrated Talent Inventory and Planning. Through this,

we will retain a healthy pipeline of skilled staff, who remain the best trained, most respected and most

experienced within the industry. We will continue to invest strongly in qualitative Training and Career

Development initiatives, as well as continuing to enhance our staff benefits and working environment.

We will continue to leverage on the Citi global network to expose our staff to “best-in-class” career

development opportunities, best practices and processes. We will seek to ensure that we reward ap-

propriately and provide the best opportunities available, for our best people. Our Staff are encouraged

to fully benefit from and utilize the Citi Careers Management Websites and other Citigroup tools such

as: “You @ Citigroup”; The Employee Portal; The Careers Portal and Citigroup Online Learning (GLMS),

to manage their careers.

“�...we will continue with our Vision to

celebrate our Staff as our most valued

resource and to ensure that NIB

remains a great place to work.”

Annual Report 2007

| 37

Financial Statements

Annual Report 2007

38 |

Annual Report 2007


38 |

The directors have pleasure in presenting their annual report on the affairs of Nigeria International

Bank Limited (the “Bank”), together with the financial statements and auditor’s report for the year

ended 31 December 2007.

Legal Form and Principal Activity

The Bank is a limited liability company. The principal activity of the Bank continues to be the provi-

sion of banking services in all its ramifications to corporate customers.

Operating Results

Highlights of the Bank’s operating results are as follows:

For the year ended 31 December 2007

Directors’ Report

2007 2006

N’000 N’000

Gross earnings 17,344,949 16,522,399

Interest expense (2,096,096) (1,670,869)

Net revenue 15,248,853 14,851,530

Operating expenses (6,206,72 1) (4,690,284)

Write-back/(provision) on risk assets (net) (628,721 ) 394,239

Profit before taxation 8,413,4 1 1 10,555,485

Taxation (1,467,3 1 3) (2,833,371 )

Profit after taxation 6,946,098 7,722,1 14

Transfer to statutory reserve (1,041,9 15) (1,158,3 17)

Transfer to small scale industries reserve - (772, 2 1 1)

Transfer to general reserve (5,904,1 83) (5,791,586)

Retained earnings for the year - -

Annual Report 2007

| 39

Annual Report 2007


| 39

Dividend

The board recommends for the approval of the shareholders the payment of a dividend of

N5,866,932,181 (N2.10k per share) from the outstanding balance in the general reserve account as

at 31 December 2007. The dividends are subject to deduction of withholding tax.

Directors and their interests

The following directors of the Bank held office during the year and had interests in the shares of

the Bank as noted:

Number of Ordinary Shares of N1

2007 2006

Chief C. S. Sankey Chairman 36,344,299 33,259,733

Mr. Emeka Emuwa Managing Director - -

Mr. Dele Babade Deputy Managing Director - -

(Resigned 29 June, 2007)

Mr. Ebenezer Olufowose Executive Director - -

Resigned 29 May, 2007)

Mr. Eddy Ogbogu Executive Director - -

(Appointed 7 June, 2007)

Mrs. Remi Odunlami Executive Director - -

(Appointed 7 June, 2007)

Mr. Munir S. Nanji (British) Executive Director - -

(Appointed 16 October, 2007)

Ms. Funmi Ade-Ajay Executive Director - -

(Appointed 16 October, 2007)

Chief E. J. Amana 20,461,831 20,4 14,221

Alhaji M. H. Koguna 6,295,280 6,280,632

Professor I. O. Oladapo 13,523,757 13,492,290

Mr. Khalid Qurashi (British) - -

Mr. Ade Ayeyemi - -

Mr. Zdenek Turek (Czech Rep) - -

Annual Report 2007

40 |

Annual Report 2007


40 |

The directors to retire by rotation at the next Annual General Meeting are Chief C.S. Sankey and

Alhaji M.H. Koguna who, being eligible, offer themselves for re-election.

Since the last Annual General meeting Mr. Eddy Ogbogu, Mrs. Remi Odunlami, Mr. Munir S. Nanji

and Ms. Funmi Ade-Ajayi were appointed directors. In accordance with the Companies and Allied

Matters Act 1990, Mr. Ogbogu, Mrs. Odunlami, Mr. Nanji and Ms. Ade-Ajayi will retire and offer

themselves for re-election.

Statement of directors’ responsibilities in relation to the financial statements for the year

ended 31 December 2007

In accordance with the provisions of Sections 334 and 335 of the Companies and Allied Matters Act

of Nigeria, and Sections 24 and 28 of the Banks and Other Financial Institutions Act of Nigeria, the

Directors are responsible for the preparation of annual financial statements which give a true and

fair view of the state of affairs of the Bank and the profit for the financial year.

The responsibilities include ensuring that:

a) Appropriate internal controls are established both to safeguard the assets of the

Bank and to prevent and detect fraud and other irregularities.

b) The Bank keeps accounting records which disclose with reasonable accuracy, the

financial position of the Bank and which ensure that the financial statements comply

with the requirements of the Companies and Allied Matters Act of Nigeria and Banks

and Other Financial Institutions Act of Nigeria.

c) The Bank has used appropriate accounting policies, consistently applied and sup-

ported by reasonable and prudent judgments and estimates, and that all applicable

accounting standards have been followed.

d) The financial statements are prepared on a going concern basis unless it is presumed

that the Bank will not continue in business.

Fixed Assets

Information relating to changes in the tangible fixed assets of the Bank is given in Note (8) to the

financial statements.

Annual Report 2007

| 41

Annual Report 2007


| 41

Charitable Contributions and Other Donations

In order to identify with the aspirations of the community and the environment within which we

operate, a total sum of N7,500,000 (2006: N7,500,000) was given out as donations and charitable

contributions during the financial year. Details of these donations and charitable contributions are

as follows:

N

Nigerian Red Cross 400,000

Sickle Cell Club, Lagos 400,000

SOS Children’s Village, Lagos 400,000

Pacelli School for the Blind 400,000

Wesley School 1 for Deaf Children 300,000

Wesley School 2 for Deaf Children 300,000

Atunda Olu School For Physically Handicapped Children 400,000

National Orthopedic Special School, Igbobi 400,000

Child Life Line, Yaba & Ikorodu, Lagos 300,000

Modupe Cole Memorial Child Care 200,000

Arrows of God Orphanage 200,000

Cheshire Home, Borokiri, Port Harcourt 400,000

Motherless Babies Home, Borokiri, Port Harcourt 400,000

Rosalie Home for Destitutes, Eleme, Port Harcourt 400,000

The Child (For Mentally Retarded Children) Port Harcourt 400,000

Compassion Home for the Physically Handicapped Children, Port Harcourt 400,000

St. Anne’s Orphanage, Warri 150,000

Our Lady of Mercy Orphanage, Warri 150,000

Right Steps Incorporated, Aba 250,000

Ngwa Road Motherless Babies Home, Aba 250,000

Seventh-Day Adventist Motherless Babies Home, Aba 250,000

Motherless Babies Home, Kuje, Abuja 250,000

Motherless Babies Home, Nyanya, Abuja 250,000

Medical Missionaries of Mary, Hospital, Lugbe 250,000

TOTAL 7,500,000

Annual Report 2007

42 |

Annual Report 2007


42 |

During the year the Bank did not make any donation to other non-political organizations (2006:

nil).

Health and Safety at Work

The Bank’s employees are adequately insured against occupational hazards. In addition, medical

facilities are provided to employees and their immediate families at the Bank’s expense.

Employment of Disabled Persons

The Bank has a non-discriminatory policy on recruitment. Applications would always be welcomed

from suitably qualified disabled persons and are reviewed strictly on qualification. The Bank’s

recruitment policy is that the highest qualified persons are recruited irrespective of physical condi-

tion, sex, state of origin, ethnicity and religion. The policy is non-discriminatory and welcomes

applications from qualified disabled persons.

During the year under review, the Bank did not employ any disabled persons.

Employee Consultation and Training

The Bank places a high premium on consultation with employees on matters affecting them. Formal

and informal channels of communication are employed in keeping staff abreast of various factors

affecting them and the performance of the Bank.

The Bank draws extensively on Citigroup’s training programs offered around the world. The pro-

grams include on the job training, classroom sessions and web-based training programs which are

available to all staff.

Auditors

KPMG Professional Services have indicated their willingness to continue in office as auditors in

accordance with Section 357(2) of the Companies and Allied Matters Act of Nigeria.

27, Kofo Abayomi Street BY ORDER OF THE BOARD

Victoria Island

Lagos

7 March 2008 Olusola Fagbure, Company Secretary

Annual Report 2007

| 43

Annual Report 2007


| 43

Corporate Governance Report

Nigeria International Bank Limited (NIB) is committed to ensuring the implementation of good

corporate governance principles in all its activities. NIB adheres to Citigroup corporate governance

principles and to the provisions of the Central Bank of Nigeria Code on Corporate Governance for

Banks in Nigeria- Post Consolidation (‘the Code’).

The Board of Directors

The Board of Directors currently consists of twelve members comprising the Chairman, the Manag-

ing Director, six Non Executive Directors and four Executive Directors. The Directors and their

shareholdings are listed in the Directors’ report.

The Board is responsible for the oversight of executive management, ensuring that the Bank’s

operations are conducted in accordance with legal and regulatory requirements, approving and

reviewing corporate strategy and performance and for ensuring that the rights of the sharehold-

ers are protected at all times. The members of the Board possess the necessary experience and

expertise to exercise their oversight functions.

In accordance with the provisions of the Code, the office and responsibilities of the Chairman and

the Managing Director/Chief Executive are separate.

The Board meets quarterly and additional meetings are convened as required. In 2007 the Board

met six times.

The Board has delegated some of its responsibilities to the following standing board committees:

Risk Management Committee, Audit Committee and the Credit Committee.

Each of these committees reports to the board on its activities. The Chairman of the Board is not a

member of any of the board committees.

Board Committees

a) Risk Management Committee

The Risk Management Committee consists of five directors, two of whom, including the Chairman

of the Committee, are Non- Executive Directors. The Committee is responsible for overseeing the

Bank’s Risk Management policies and procedures in the areas of franchise, operational, credit and

market risk. The Committee meets quarterly and met four times during the year.

Annual Report 2007

44 |

Annual Report 2007


44 |

b) The Credit Committee

The Credit Committee consists of five directors, three of whom, including the Chairman of the

committee are Non- Executive Directors. The Committee is responsible for approving credits above

such limits as may be prescribed by the Board of Directors from time to time. The Committee meets

quarterly and met four times during the year.

c) The Audit Committee

The Audit Committee consists of two shareholders and two non-executive directors. The Chairman

of the Committee is a shareholder.

The Committee’s responsibilities include the review of the integrity of the Bank’s financial reporting,

oversight of the independence and objectivity of the external auditors, the review of the reports of

external auditors and regulatory agencies and management responses thereto, and the review of

the effectiveness of the Bank’s system of accounting and internal control.

During the year the Committee approved the external auditor’s terms of engagement and scope of

work and also reviewed the internal auditors audit plan. The Committee received regular internal

audit reports from the Bank’s internal auditor. Members of the Committee have unrestricted access

to the Bank’s external auditors.

The Committee meets quarterly and met five times during the year.

General Meetings

During the year, two shareholders’ meetings were held. An Annual General Meeting was held on 22

March 2007 and an Extra-Ordinary General Meeting was held on 13 September 2007. A quorum of

shareholders was present at both meetings.

Risk and Controls

In line with Citigroup policies, the Bank maintains a strong control environment. The internal con-

trol system is designed to achieve efficiency and effectiveness of operations; reliability of financial

reporting and compliance with applicable laws and regulations at all levels of the Bank as required

by the Code.

Robust risk management policies and mechanisms have been put in place to ensure identification

of risk and effective control. The Board Risk Management Committee oversees the Bank’s risk

management policies.

Annual Report 2007

| 45

Annual Report 2007


| 45

To the Members of Nigeria International Bank Limited

Report on the Financial Statements

We have audited the accompanying financial statements of Nigeria International Bank Limited,

which comprise the balance sheet as at 31 December, 2007, and the profit and loss account, state-

ment of cash flows and value added statement for the year then ended, and the statement of

accounting policies, notes to the financial statements and the five year financial summary, as set

out on pages 47 to 81.

Directors’ Responsibility for the Financial Statements

The directors’ are responsible for the preparation and fair presentation of these financial state-

ments in accordance with Statements of Accounting Standards applicable in Nigeria and in the

manner required by the Companies and Allied Matters Act of Nigeria, the Banks and Other Finan-

cial Institutions Act of Nigeria, and relevant Central Bank of Nigeria circulars. This responsibility

includes: designing, implementing and maintaining internal control relevant to the preparation and

fair presentation of financial statements that are free from material misstatement, whether due

to fraud or error; selecting and applying appropriate accounting policies; and making accounting

estimates that are reasonable in the circumstances.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We

conducted our audit in accordance with International Standards on Auditing. Those standards

require that we comply with ethical requirements and plan and perform the audit to obtain reason-

able assurance whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures

in the financial statements. The procedures selected depend on the auditor’s judgment, including

the assessment of the risks of material misstatement of the financial statements, whether due to

fraud or error. In making those risk assessments, the auditor considers internal control relevant to

the entity’s preparation and fair presentation of the financial statements in order to design audit

procedures that are appropriate in the circumstances, but not for the purpose of expressing an

opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the

appropriateness of accounting policies used and the reasonableness of accounting estimates made

by the directors, as well as evaluating the overall presentation of the financial statements.

Independent Auditor’s Report

Annual Report 2007

46 |

Annual Report 2007


46 |

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis

for our audit opinion.

Opinion

In our opinion, the financial statements give a true and fair view of the state of affairs of Nigeria

International Bank Limited as at 31 December, 2007, and of its profit and cash flows for the year

then ended in accordance with Statements of Accounting Standards applicable in Nigeria and in

the manner required by the Companies and Allied Matters Act of Nigeria, Banks and Other Financial

Institutions Act of Nigeria and relevant Central Bank of Nigeria circulars.

Report on Other Legal and Regulatory Requirements

Compliance with the requirements of Schedule 6 of the Companies and Allied Matters Act

of Nigeria

In our opinion, proper books of account have been kept by the Bank, so far as appears from our

examination of those books and the Bank’s balance sheet and profit and loss account are in agree-

ment with the books of accounts.

Compliance with Section 27 (2) of the Banks and Other Financial Institutions Act of Nigeria

and Central Bank of Nigeria circular BSD/1/2004

i. The Bank did not incur any penalties in respect of contraventions of the Banks and Other Finan-

cial Institutions Act in respect of the year ended 31 December 2007.

ii. Related party transactions and balances are disclosed in note (28) of the financial statements in

compliance with the Central Bank of Nigeria circular BSD/1/2004.

7 March 2008

Lagos, Nigeria

Annual Report 2007

| 47

Annual Report 2007


| 47

Notes 2007 2006

N’000 N’000

ASSETS:

Cash and short-term funds 1 45,437,1 1 2 38,041,624

Short term investments 2 24, 1 17,679 24,367,085

Loans and advances 3 42,386,004 35,489,755

Other facilities 4 560,936 885,41 5

Advances under finance lease 5 97,246 145,227

Other assets 6 4,033,018 1 ,024,957

Long-term investments 7 15,600,006 8,750,332

Fixed assets 8 3,646,988 2,676,840

Total assets 135,878,989 111,381,235

LIABILITIES:

Deposits and other accounts 9 79,134,721 61 ,06 1,974

Other facilities 10 566,602 894,359

Other liabilities 1 1 18,570,906 1 1 ,792,683

Provisions 12 331,325 378,839

Taxation payable 13 1 ,813,365 3,376,72 1

Deferred taxation 14 430,262 63,706

TOTAL LIABILITIES 100,847,18 1 77,568,282

Net assets 35,031,808 33,812,953

CAPITAL AND RESERVES:

Share capital 15 2,793,777 2,793,777

Share premium 16 1 1,643,995 1 1 ,643,995

Reserves 17 20,594,036 19,375, 1 8 1

Shareholders’ funds 35,031,808 33,812,953

Acceptances, bonds, guarantees and other

obligations for the account of customers 18 58,856,226 29,924,882

SIGNED ON BEHALF OF THE BOARD OF DIRECTORS BY:

Chief (Dr.) C. S. Sankey Mr. Emeka Emuwa

Chairman Managing Director

Approved by the Board of Directors on 7 March 2008.

The accompanying notes form an integral part of this balance sheet.

As at 31 December 2007

Balance Sheet

Annual Report 2007

48 |

Annual Report 2007


48 |


Profit and Loss Account

Notes 2007 2006

N’000 N’000

GROSS EARNINGS: 17,344,949 16,522,399

Interest and discount income 20 1 1 ,668,408 10,809,434

Lease finance income 12,444 16,682

Interest expense 21 (2,096,096) (1 ,670,869)

9,584,756 9,155,247

(Provisions)/write-backs on risk assets (net) 3 (628,72 1 ) 394,239

Net interest margin 8,956,035 9,549,486

Other income 22 5,664,097 5,696,283

14,620,132 15,245,769

Operating expenses 23 (6,206, 721 ) (4,690,284)

Profit before taxation 23 8,413,41 1 10,555,485

Taxation 13 (1 ,467, 3 1 3 ) (2,833,37 1 )

Profit after taxation 6,946,098 7,722, 1 14

APPROPRIATIONS:

Transfer to statutory reserve 17 (1,04 1 ,91 5 ) (1 , 1 58,3 1 7)

Transfer to small scale industries reserve 17 - (772,2 1 1 )

Transfer to general reserve 17 (5,904, 1 83) (5,791 ,586)

- -

Earnings per share 24 249k 276k

The accompanying notes form an integral part of this profit and loss account.

Annual Report 2007

| 49

Annual Report 2007


| 49


Statement of Cash Flows

Notes 2007 2006

N’000 N’000

OPERATING ACTIVITIES:

Net cash flow from operating activities

before changes in operating assets 25 9,206,944 10,427,015

Changes in operating assets 26 1 4,686, 1 76 12,029,578

Income tax paid 13 (2,664, 1 1 3 ) (1 ,030,203)

Net cash flow from operating activities 21,229,007 21,426,390

INVESTING ACTIVITIES:

Purchase of fixed assets 8 (493,867) (321 ,590)

Work in-progress on head office project 8 (885,490) (641,075)

Purchase of investments 7 (6,849,674) (3,236, 1 97)

Investment income 22 33,0 1 6 1 3,635

Proceeds from sale of fixed assets 89,739 83,926

Net cash flow from investing activities (8,106,276) (4,101 ,301)

FINANCING ACTIVITIES:

Proceeds from rights issue 15 - 3 1 0,446

Dividend paid 17 (5,727,243 ) (2,339,788)

Net cash flow from financing activities (5,727,243) (2,029,342)

Net increase in cash and short-term funds 7,395,488 1 5,295,747

Cash and short-term funds, beginning of year 38,041 ,624 22,745,877

Cash and short-term funds, end of year 1 45,437, 1 1 2 38,041 ,624

The accompanying notes form an integral part of this statement of cash flows.

Annual Report 2007

50 |

Annual Report 2007


50 |

A summary of the principal accounting policies, applied consistently throughout the current and

prior year, is set out below.

(a) Basis of accounting

The financial statements are prepared under the historical cost convention.

(b) Cash and short-term funds

Cash and short-term funds comprise cash balances on hand, cash deposited with the Central

Bank of Nigeria, cash deposited with other banks (local and foreign) other than the Central Bank,

placements with local and foreign banks, which are subject to insignificant risk of changes in their

carrying value.

(c) Investments

Investments are classified as either short term or long term investments. Investments with an

outstanding tenor to maturity not exceeding one year and investments held for trading are classi-

fied as short-term investments while the others are classified as long term investments.

Short-term investments comprise investments in bonds and treasury bills issued by the Federal

Government of Nigeria and are carried at net realizable value. Gains or losses resulting from mar-

ket valuation are recognized in the profit and loss account. The original cost is disclosed.

Treasury bills not held for trading are presented net of unearned discount. Unearned discount is

deferred and amortized as earned. Unearned discount is not recognized on treasury bills held for

trading. Interest earned while holding short term securities is reported as interest income.

Long-term investments comprise of investment in bonds and equity securities and are carried at

cost. Provisions are made for permanent diminution in the value of such investments. The market

value of quoted securities is disclosed. Income earned as dividend on equity securities held as

long-term investments is reported as other income, while interest earned on bonds is reported as

interest income.

Any discount or premium arising on acquisition of bonds is included in the original cost of the

investment and is amortized over the period of purchase to maturity.

(d) Loans and advances

Loans and advances are financial assets with fixed or determinable payments. Loans and advances

are stated net of provision for bad and doubtful debts.

The provision is determined by a specific assessment of each customer’s account in accordance

with the Central Bank of Nigeria’s (CBN) circular on Prudential Guidelines for licensed banks as

follows:

Statement of Accounting Policies

Annual Report 2007

| 51

Annual Report 2007


| 51

Number of days outstanding of principal/interest Required provision

%

90 days but less than 180 days 10

180 days but less than 360 days 50

Over 360 days 100

A minimum of 1% general provision is made on all loans and advances, which have not been spe-

cifically provided for, in line with the Prudential Guidelines. Bad debts are written off when it is

determined that they are uncollectible.

(e) Advances under finance lease

Advances under finance lease are stated net of unearned lease finance income. Lease finance

income is recognized in a manner, which provides a constant yield on the outstanding net invest-

ment over the lease period.

In accordance with the Prudential Guidelines for licensed banks, a minimum of 1% general provi-

sion is made on the aggregate net investment in finance lease. Specific provision is made on lease

rentals that are doubtful of collection in line with CBN Prudential Guidelines for licensed banks and

the Bank’s standard policy on loans.

(f) Fixed assets

• Fixed assets are stated at cost less accumulated depreciation.

• Subsequent costs incurred in replacing part of an item of property or equipment is recog-

nized in the carrying amount if it is probable that the future economic benefits embodied

within the part will flow to the bank. The costs of the day to day servicing of fixed assets are

recognized in the profit and loss account as incurred.

• Depreciation is provided on a straight-line basis at rates calculated to write off the cost of

each asset over its estimated useful life. Land is not depreciated. The depreciation rates

were charged at the following annual rates:

Annual Report 2007

52 |

Annual Report 2007


52 |

Leasehold improvements Over the lease period

Building 2%

Furniture and equipment 20%

Computers and computer equipment 33 1/3%

Motor vehicles 25%

• Capital work-in-progress is not depreciated. Upon completion the attributable cost

of each asset is transferred to the relevant asset category.

• Gains or losses on the disposal of fixed assets are included in the profit and loss

account.

(g) Deposit liabilities

Deposit liabilities are the Bank’s sources of debt funding. Deposit liabilities are carried at cost.

(h) Provisions

A provision is recognized if, as a result of a past event, the Bank has a present legal or constructive

obligation that can be estimated reliably and it is probable that an outflow of economic benefits will

be required to settle the obligation.

(i) Taxation

• Income tax payable is provided on taxable profits at the current tax rate.

• Income tax expense comprises current and deferred tax and is recognized in the profit and

loss account.

(j) Deferred taxation

Deferred taxation, which arises from temporary timing differences in the recognition of items for

accounting and tax purposes, is calculated using the liability method. Deferred tax is provided on

timing differences, which are expected to reverse in the foreseeable future at the rates of tax likely

to be in force at the time of reversal.

(k) Off balance sheet transactions

Transactions to which there are no direct balance sheet risks to the Bank are reported and

accounted for as off balance sheet transactions and comprise:

Acceptance/direct credit substitutes:

Acceptances comprise undertakings by the Bank to pay bills of exchange drawn on

customers. The Bank expects most acceptances to be settled simultaneously with the

Annual Report 2007

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Annual Report 2007


| 53

reimbursement from customers.

Acceptances, which meet the conditions, set out in Central Bank of Nigeria (CBN)

Guidelines on the treatment of Bankers Acceptances and Commercial Papers are ac-

counted for and disclosed as contingent liabilities. The income and expense relating to

these acceptances are reported net in the financial statements.

Guarantees and performance bonds:

The Bank provides financial guarantees and bonds to third parties on the request of

customers in form of bid and performance bonds or advance payment guarantees. These

agreements have fixed limits and generally do not extend beyond the period stated in

each contract.

The amounts reflected in the financial statements for bonds and guarantees represent

the maximum accounting loss that would be recognized at the balance sheet dates

if counterparties failed completely to perform as contracted. Commissions and fees

charged to customers for services rendered in respect of bonds and guarantees are

recognized over the life of such bonds and guarantees.

Transaction-related contingencies:

Transaction related contingencies comprise letters of credit and commitments to deliver

on sales and/or purchase of foreign exchange in the future.

(i) Letters of credit

The Bank provides letters of credit to guarantee the performance of

customers to third parties. Confirmed letters of credit for which the cus-

tomer has not provided cash cover are reported off balance sheet.

(ii) Commitments to deliver on sales or purchase of foreign exchange in the

future:

Commitments to deliver on sales and/or purchases of foreign exchange

transactions in future at contracted rates are recognized as contingent

liabilities. Foreign Exchange commitments are converted at contracted

rates at the balance sheet date.

(l) Income recognition

Income in the Profit and loss account is recognized as follows:

• Interest is accrued monthly on all interest-bearing assets. Risk assets are classified as

non-performing when they are overdue for more than 90 days. Interest income aris-

ing therefrom is recognized only to the extent that cash is received. The income and

Annual Report 2007

54 |

Annual Report 2007


54 |

expense relating to acceptances disclosed as contingent liabilities are reported net in

the financial statements.

• Credit-related fee income is systematically spread over the life of the credit facility.

• Commissions and fees charged to customers for services rendered are recognized at the

time the service or transaction is effected, except for commissions earned on letters of

credit transactions, which are amortized over the life of the letters of credit.

• Dividend income is recognized in the profit and loss account when the Bank becomes

entitled to the dividend.

• Recoveries of previously written-off loans and advances are written back to profit and

loss account on a cash basis.

(m) Foreign currency items

Transactions in foreign currencies are converted into Naira at the rates of exchange ruling at the

date of each transaction (or where appropriate the rate of the related forward contracts). Monetary

assets and liabilities denominated in foreign currencies are reported at the rates of exchange prevail-

ing at the balance sheet date. Any gain or loss arising from a change in exchange rates subsequent

to the date of the transaction is included in the profit and loss account.

(n) Pension scheme

The Bank operates a defined contributory pension scheme. The scheme is fully funded and is managed

by licensed Pension Fund Administrators. Membership of the scheme is automatic upon commence-

ment of duties at the Bank. The employee and the Bank contribute 7.5% each of the employee’s

annual basic salary as well as housing and transport allowances to the scheme. The Bank’s contribu-

tions to this scheme are charged to profit and loss account in the period to which they relate.

(o) Earnings per share

Basic earnings per share (EPS) is calculated by dividing the profit or loss attributable to ordinary

shareholders of the Bank by the weighted average number of ordinary shares outstanding during

the year.

(q) Segment reporting

The Bank defines a segment as a distinct or distinguishable unit of the Bank that is engaged in pro-

viding financial products or services subject to risks and rewards that are different from those of

other segments. The Bank’s primary format for segment reporting is based on business segments.

The Bank currently operates in one geographical segment, which is Nigeria and, as such, does not

have a secondary segment reporting format.

Annual Report 2007

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Annual Report 2007


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Notes to the Financial Statements

1. Cash and short-term funds

(a) Cash and short-term funds comprise:

2007 2006

N’000 N’000

Cash and foreign monies 1 ,851,340 1 ,194,400

BALANCES HELD WITH CENTRAL BANK OF NIGERIA:

Current accounts 7,492,029 3,423,072

Restricted balance (see (b) below) 784,725 784,725

Cash reserve (see (c) below) 2,091,498 6,241 ,309

BALANCES HELD WITH OTHER BANKS AND CHEQUES IN COURSE OF COLLECTION:

In Nigeria:

Current accounts 8 1 9,732 618,990

Secured placements 14,000,000 1,000,000

Unsecured placements 1,750,000 -

Outside Nigeria:

Current accounts 9,085,232 10,380,873

Placements with other Citigroup branches - 8,970,500

Placements held on account of customers’

obligations (see (d) below) 7,562,556 5,427,755

45,437,1 12 38,041,624

(b) This represents restricted funds held by the Central Bank of Nigeria in respect of investment

in SMEEIS not yet undertaken by the Bank.

(c) In line with the current CBN policy on cash reserve, this represents 3% of two weeks average

daily balances of deposit liabilities.

(d) This represents the Naira value of foreign currencies held on behalf of customers to cover

letter of credit transactions. The corresponding liability for this amount is included in other

liabilities (see Note 11).

Annual Report 2007

56 |

Annual Report 2007


56 |

2. Short term investments:

(a) These comprise:

2007 2006

N’000 N’000

Treasury bills – trading 3,415,277 -

FGN bonds - trading 1,836,074 2,963,5 1 3

Treasury bills - others (see (b) below) 16,199,78 1 1 9,903,572

FGN bonds – others 2,666,547 1 ,500,000

24,117,679 24,367,085

(b) Treasury bills – others are stated as follows:

2007 2006

N’000 N’000

Face value (see (c) below) 16,963,556 20,794,5 7 1

Unearned income (737,7 14) (890,999)

Revaluation loss (26,06 1) -

Net investment 16,199,781 19,903,572

(c) Included in the treasury bills - others is N1,855,556,000 (2006: N2,005,556,000) pledged as

collateral.

(d) The original cost of the bills and bonds at the balance sheet date was N19,554,779,000 (2006:

N19,903,572,000) and N4,441,256,000 (2006: N4,463,513,000) respectively.

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3. Loans and advances

(a) The classification of loans and advances is as follows:

2007 2006

N’000 N’000

Otherwise secured 2 , 6 1 1 , 5 1 3 905,1 69

Unsecured 42,372,629 37,284,679

44,984,142 38,189,848

Loan loss provision (see (b) below)

- Specific (1 , 1 99,983) (827,708)

- General (374,434) (434,078)

(1 ,5 74,4 1 7) (1 ,26 1 ,786)

Interest in suspense (see (c) below) (1 ,023, 7 2 1 ) (1 ,438,307)

(2,598, 1 38) (2,700,093)

42,386,004 35,489,755

No loan was secured against real estate (2006: Nil).

(b) The movement on the loan loss provision account during the year was as follows:

2007 2006

N’000 N’000

Balance, beginning of year 1 ,26 1 ,786 1 ,459,474

Write-backs on recoveries ( 1 42,878) (104,9 1 3)

Provisions during the year 775,362 1 03,666

Provisions on loans written-off (3 1 9,853) (1 96,44 1 )

Balance, end of year 1 ,574,417 1,261,786

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58 |

Annual Report 2007


58 |

(c) The movement on the interest in suspense account during the year was as follows:

2007 2006

N’000 N’000

Balance, beginning of year 1 ,438,307 1 ,627,038

Interest suspended during the year 1 5 1 ,793 273,4 1 6

Interest recovered (85,243) (56,978)

Interest written-off (48 1 ,136) (405, 1 69)


(d) Write-backs on risk assets comprise:

2007 2006

N’000 N’000

Write-backs on recoveries 142,878 104,9 1 3

Provisions on loans and advances (775,362) ( 1 03,666)

Write-back on guarantees - 390,300

Write-backs on other facilities (see Note 4 (b)) 3,278 2 ,76 1

Write-backs/(provisions) on advances under

finance lease (see Note 5(c)) 485 (69)

(628,721) 394,239

(e) The maturity profile of loans and advances is as follows:

2007 2006

N’000 N’000

Under 1 month 4,9 2 1 ,478 3,855,023

1 - 3 months 2,938,204 8,508,7 1 6

3 - 6 months 6, 0 1 6,723 6,364,633

6 - 12 months 26,794,518 15,863,599

Over 12 months 4, 3 1 3 ,219 3,597,877

44,984,142 38,189,848

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(f) The analysis of loans and advances by performance is as follows:

2007 2006

N’000 N’000

Performing 36, 1 99, 1 29 35,9 1 9, 1 75

Non-performing

- Principal 7,76 1 ,292 832,366

- Interest in suspense 1 ,023,72 1 1 ,438,307

44,984,142 38,189,848

(g) The analysis of non-performing loans and advances and related provisions is as follows:

Number of 2007 2006

days past due N’000 N’000

Balance Provision % Balance Provision %

90 - 180 7,1 78,509 717,850 10 941 94 10

180 - 360 201,300 100,650 50 7,622 3,8 1 1 50

Over 360 1,405,204 1 ,405,204 100 2,262, 1 1 0 2,262,1 10 100

8,785,013 2,223,704 100 2,270,673 2,266,015 100

(h) The analysis of loan loss provision and interest in suspense on performing and non-perform-

ing loans and advances is as follows:

2007 2006

N’000 N’000

Performing 374,434 434,078

Non-performing 2,223,704 2,266,0 1 5

2,598,138 2,700,093

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60 |

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60 |

4. Other facilities

(a) The Bank acts as an intermediary for FMO Netherlands in respect of loans and advances (see

Note 10). The classification of the outstanding balance as at year-end is as follows:

2007 2006

N’000 N’000

Unsecured 566,602 894,359

General provision (5,666) (8,944)

560,936 885,415

(b) The movement on the loan loss provision for other facilities during the year was as follows:

2007 2006

N’000 N’000

Balance, beginning of year 8,944 1 1 ,705

Write-backs during the year (see Note 3(d)) (3,278) (2,76 1 )

Balance, end of year 5,666 8,944

(c) The maturity profile of other facilities is as follows:

2007 2006

N’000 N’000

3 - 6 months 1 34,950 137,505

6 - 12 months 139,437 14 1,862

Over 12 months 292,2 1 5 614,992

566,602 894,359

(d) The only outstanding facility was performing as at year end.

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5. Advances under finance lease

(a) The classification of advances under finance lease is as follows:

2007 2006

N’000 N’000

Otherwise secured 98,228 146,694

General provision (see (c) below) (982) (1 ,467)

97,246 145,227

(b) Advances under finance lease are stated as follows:

2007 2006

N’000 N’000

Gross investment 1 1 1 ,320 1 70,802

Unearned income (13,092) (24, 1 08)

Net investment 98,228 146,694

(c) The movement on provision for advances under finance lease during the year was as follows:

2007 2006

N’000 N’000

Balance, beginning of year 1 ,467 1 ,398

(Write-back)/provision during the year (see Note3(d)) (485) 69

Balance, end of year 982 1,467

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(d) The maturity profile of advances under finance lease is as follows:

2007 2006

N’000 N’000

Under 1 month 90 -

1 - 3 months 1 22 997

3 - 6 months 2,306 238

6 - 12 months 1 ,9 1 8 4,772

Over 12 months 93,792 1 40,687

98,228 146,694

(e) All advances under finance lease were performing as at year end.

6. Other assets:

(a) Other assets comprise:

2007 2006

N’000 N’000

Treasury bills sold under open buy-back transactions 3,000,000 -

Interest receivable on placements and securities 558,978 358,082

Prepayments 203, 1 56 173,408

Sundry receivables 1 1 4,259 54,050

Fees and commissions receivable 1 28,0 1 1 254,267

Purchased coupon on FGN bond 34,6 1 5 1 90,963

Prepaid interest and discounts - 1 88

4,039,019 1,030,958

Provisions on sundry receivables (6,00 1 ) (6,00 1 )

4,033,018 1,024,957

(b) (i) There was no movement on the provision on other assets during the year.

(ii) Adequate provisions have been made for diminution in the value of other assets at the

balance sheet date.

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7. Long-term investments

(a) Long-term investments comprise:

2007 2006

N’000 N’000

Federal Government bonds 14,957,356 8, 139,370

Investment in Nigeria International Debt Fund (NIDF)

Notes (see Note (b) below) 298,700 298,700

Investments in SME Companies (See Note (c) below) 279, 1 5 1 258,7 14

Investments in Nigeria Interbank Settlement System

(NIBBS) (see Note (d) below) 47,548 47,548

Investments in Valucard Nigeria Plc (See Note (e) below) 23,0 1 9 23,01 9

Investment in Central Securities Clearing System Limited

(See Note (f) below) 6,000 6,000

Investment in Vectis Nigeria GP (See Note (g) below) 1 1,2 5 1 -

15,623,025 8,773,351

Provision for impaired investments (23,0 1 9) (23,0 19)

(See (h) below)

15,600,006 8,750,332

(a) These represent investments in Federal Government of Nigeria bonds with outstanding tenor

to maturity exceeding one year and not held for trading. Market value as at balance sheet date

was N15,139,546,000 (2006: N8,552,188,670).

(b) The market and net asset values of the investment in NIDF notes at the balance sheet date

were N293,056,050 and N495,425,824 respectively.

(c) This represents the Bank’s direct equity investment in Accion Micro Finance (N117.489 million)

and indirect equity investment in Falcongaz Limited, Alvac Company Limited, Freezone Plant

Fabrication International, Nigerian Starch Mills Limited, Oakwood Park Limited, S&B Ince

Limited, Orbital Track & Fleet Management, Weltek Limited and Impex Worldwide through SME

II Partnership. Additional investments of N20.437 million were made during the year.

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(d) This represents the Bank’s 4% equity participation in Nigerian Interbank Settlement System

Plc.

(e) This represents the Bank’s 3.27 % equity investment in Valucard Nigeria Plc.

(f) This represents the Bank’s 1.06% equity investment in Central Securities Clearing System

Limited.

(g) This represents the Bank’s 6.85% equity investment in Vectis Nigeria GP made during the

year.

(h) There was no movement on the provision on long-term investments during the year.

(i) The directors are of the opinion that there has been adequate provision made for the

diminution in the value of investments at the balance sheet date.

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8. Fixed assets

(a) The movement on these accounts during the year was as follows:

Work Leasing Land & Furniture & Motor

In-Progress Buildings Equipment Vehicles Total

N’000 N’000 N’000 N’000 N’000

COST:

Balance, beginning

of year 1 ,699,850 390,833 1 ,438,284 584,628 4, 1 1 3,595

Additions 885,490 - 3 1 9,078 174,789 1 ,379,357

Transfers (2,5 7 7,202) 1 ,232,045 1 ,345, 1 5 7 - -

Disposals - - (80,787) (163,018) (243,805)

Balance, end of year 8,138 1,622,878 3,021,732 596,399 5,249,147

ACCUMULATED DEPRECIATION:

Balance, beginning

of year - 53,227 1 ,103,957 279,571 1 ,436,755

Charge for the year - 7,792 1 86,456 1 33,593 327,841

Disposals - - (62,270) (100, 1 67) (162,437)

Balance, end of year - 61 ,019 1 ,228, 1 43 312 ,997 1 ,602 ,159

NET BOOK VALUE:

End of year 8,138 1 ,561 ,859 1 ,793,589 283,402 3,646,988

Beginning of year 1,699,850 337,606 334,327 305,057 2,676,840

(b) As at 31 December 2007, the Bank’s head office building has been put to use and a total

amount of N2.557 billion was transferred to the relevant asset categories. Authorized and

committed contracts stood at N2.916 billion and N0.18 billion respectively (2006: N3.685

billion and N1.841billion)

(c) The land is held under a statutory right of occupancy.

(d) No leased movable assets are included in the above fixed asset accounts.

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9. Deposits and other accounts

(a) Deposits and other accounts comprise:

2007 2006

N’000 N’000

Demand 62,003,061 52,478,354

Term 10,939,891 8,348,544

Savings 240,101 235,076

Interbank (see note (c) below) 3,000,000 -

Due to other Citigroup branches 2,951,668 -

79,134,721 61,061,974

(b) The maturity profile of deposits and other accounts is as follows:

2007 2006

N’000 N’000

Under 1 month 73,693,596 59,470, 149

1 - 3 months 266,239 1 ,432,637

3 - 6 months 621,656 159,1 88

6 - 12 months 4,553,230 -

79,134,721 61,061,974

(c) This represents secured open buy-back interbank takings.

10. Other facilities

(a) Other facilities comprise:

2007 2006

N’000 N’000

Due to FMO Netherlands 566,602 894,359

566,602 894,359

(b) Other facilities from FMO Netherlands bears interest rate of 2.4% above LIBOR rates and is

repayable semi-annually expiring in December 2009.

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(c) The maturity profile of amounts received from FMO Netherlands for on-lending (Note 4) is as

follows:

2007 2006

N’000 N’000

3 - 6 months 1 34,950 137,505

6-12 months 139,437 1 4 1,862

Over 12 months 292,2 1 5 614,992

566,602 894,359

11. Other liabilities

Other liabilities comprise:

2007 2006

N’000 N’000

Placements held on account of

customers’ obligations (see Note 1(d)) 7,562,556 5,427,755

Deposit for foreign exchange 4,032,668 1 ,0 70,562

Managers’ cheques 4,610,777 4,026,481

Accrued expenses 1 ,059,987 516,918

Unearned income 408,973 307,897

Interest payable 1 46,97 1 52,998

Collections 50,245 1 26, 1 34

Foreign currency drafts payable 35,0 1 2 77, 1 2 3

Others 663,7 1 7 1 86,8 1 5

18,570,906 11,792,683

12. Provisions

(a) Provisions comprise:

2007 2006

N’000 N’000

Gratuity provision (see Note (b) below) 255,244 308,492

Others 76,08 1 70,347

331,325 378,839

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(b) The movement on gratuity provision account during the year was as follows:

2007 2006

N’000 N’000

Balance, beginning of year 308,492 372,386

Payments during the year (59,872) (64, 108)

Interest earned on investment 6,624 2 14


(c) Gratuity provision

Prior to 1 July 2005, the Bank operated a gratuity scheme under which employees were entitled to

certain benefits based on the terms of the scheme. Effective from 1 July 2005, the gratuity scheme

was terminated and replaced by a pension plan.

Under the terms of the termination, amounts payable to employees will be paid when such employ-

ees leave the service of the Bank and the amount payable is calculated on a pro-rata basis.

13. Taxation payable

(a) The movement on this account during the year was as follows:

2007 2006

N’000 N’000

Balance, beginning of year 3,376,72 1 1 ,439,335

Payments during the year (2,664, 1 1 3) (1 ,030,203)

Current year charge (see Note (b) below) 1 ,100,757 2,967,589


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(b) The tax charge for the year comprises:

2007 2006

N’000 N’000

Current tax charge 1 , 1 00,757 2,918,266

Prior year under provision - 49,323

1 ,100,757 2,967,589

Deferred taxation (note 14) 366,556 (1 34,218)

1,467,313 2,833,371

The current tax charge has been computed at the rate of 30% on the profit for the year after

adjusting for certain items of income and expenditure, which are not deductible or chargeable for

tax purposes, plus 2% Education Levy for the year.

14. Deferred taxation

(a) Movement on deferred tax account during the year was as follows:

2007 2006

N’000 N’000

Balance, beginning of year 63,706 197,924

Charge/(reversal) during the year (note 13) 366,556 (134,218)


(b) The Bank’s exposure to deferred tax has been fully provided for in the financial statements.

The directors are of the opinion that these timing differences are likely to reverse in the

foreseeable future.

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15. Share capital

(a) Share capital comprises:

2007 2006

N’000 N’000

AUTHORISED:

3.0 billion Ordinary shares of N1.00 each 3,000,000 3,000,000

ISSUED AND FULLY PAID:

2.794 billion Ordinary shares of N1.00 each 2,793,777 2,793,777

(b) Movement in share capital account during the year was as follows:

2007 2006

N’000 N’000

Balance, beginning of year 2,793,777 2,762,733

Rights issue - 31 ,044

Balance, end of year 2,793,777 2,793,777

16. Share premium

Movement in share premium account during the year was as follows:

2007 2006

N’000 N’000

Balance, beginning of year 1 1 ,643,995 11 ,364,593

Premium from rights issue - 279,402

Balance, end of year 11,643,995 11,643,995

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17. Reserves

(a) Reserves comprise:

2007 2006

N’000 N’000

Statutory reserve 6,674,354 5,632,439

General reserve (see Note (b)) 10,543, 7 8 1 10,366,84 1

Small and medium enterprises equity

investment scheme (SMEEIS) reserve 3,375,9 0 1 3,375,90 1

20,594,036 19,375,1 81

(b) The movements on these accounts during the year were as follows:

Statutory General SMEEIS Total

Reserve Reserve Reserve

N’000 N’000 N’000 N’000

Balance, beginning of year 5,632,439 10,366,841 3,375,901 1 9,375, 1 8 1

Transfer from profit and loss account 1,041,915 5,904,183 - 6,946,098

Paid out as dividend during the year - (5,727,243) - (5,727,243)

Balance, end of year 6,674,354 10,543,781 3,375,901 20,594,036

In accordance with existing legislation, 15% (2006:15%) of profit after taxation of the Bank has

been transferred to statutory reserve.

In accordance with the Banker’s committee and Central Bank of Nigeria’s revised position on provi-

sion for SMEEIS, additional appropriation was not made for small scale industries reserve in 2007

(10% of PBT in 2006).

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18. Acceptances, bonds, guarantees and other obligations for the account of customers

(a) These comprise:

2007 2006

N’000 N’000

Acceptances/direct credit substitutes 666,236 372,370

Foreign exchange commitments 1 1 ,230,995 232,743

Letter of credit 22,239,482 14,665,787

Bonds and guarantees 24,7 1 9,5 1 3 14,653,982

58,856,226 29,924,882

(b) Included in bonds and guarantees is a standby letter of credit granted by the Bank to AES

Nigeria Barge Limited on behalf of Power Holding Company of Nigeria (PHCN) for the sum

of $60,000,000 (2006: $60,000,000). The facility, which is secured by a comprehensive

guarantee of the Federal Government of Nigeria, is renewable annually, though the underly-

ing contract will expire in the year 2014. 50% of the sum has been guaranteed by another

Nigerian Bank.

19. Litigations and claims

There are litigations and claims against the Bank as at 31 December 2007 amounting to

N1,400,512,340 (2006: N1,036,642,186). These litigations and claims arose in the normal course

of business and are being contested by the Bank. The directors, having sought professional legal

counsel are of the opinion that no significant liability will crystallize from these litigations; there-

fore no provisions are deemed necessary.

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20. Interest and discount income

Interest and discount income comprises:

2007 2006

N’000 N’000

SOURCE:

Lending to financial institutions 1,229,082 650,098

Lending to non-bank customers 6,55 1 ,606 4,686, 1 74

Interest/discount income on securities 3,887,720 5,473,1 62

11,668,408 10,809,434

GEOGRAPHICAL LOCATION:

Earned in Nigeria 10,492, 3 1 5 10,009,282

Earned outside Nigeria 1 , 1 76,093 800, 1 52

11,668,408 10,809,434

21. Interest expense

Interest expense comprises:

2007 2006

N’000 N’000

SOURCE:

Borrowing from banks 130,8 7 1 286,85 1

Other customers 1,965,225 1,384,018

2,096,096 1,670,869

GEOGRAPHICAL LOCATION:

Paid in Nigeria 1,622,097 1,496,5 1 0

Paid outside Nigeria 473,999 1 74,359

2,096,096 1,670,869

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22. Other income

Other income comprises:

2007 2006

N’000 N’000

Commissions 2,562,635 3,338,1 7 1

Income from foreign exchange transactions 1 ,299,83 1 1 , 145,962

Fees 885,9 1 7 959,888

Gain on sale of short-term investments 752,685 223,3 1 4

Revaluation gain on short term investments 121 ,642 -

Investment income 33,0 1 6 1 3,635

Gain on sale of fixed assets 8,3 7 1 1 5,3 1 3

5,664,097 5,696,283

23. Profit before taxation

(a) General

Profit before taxation for the year is stated after charging the following operating expenses:

2007 2006

N’000 N’000

Staff cost (see note (b)) 2,494,233 1,992,482

Deposit insurance premium 553,880 4 1 2,673

Depreciation 327,841 294,7 1 7

Outsourced services 3 1 7,9 1 7 253,205

Communications 1 62,875 165,804

Transport and travel 104, 1 53 82,575

Rentals 93,808 90,444

Auditor’s remuneration 25,000 17,500

Other administrative expenses 2 , 1 27,014 1 ,380,884

6,206,721 4,690,284

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(b) Staff and Directors’ costs

i. Cost of employees, including executive directors, during the year amounted to:

2007 2006

N’000 N’000

Wages and salaries 2,2 1 4,102 1 ,760,983

Pension costs 99,654 85,283

2,3 13,756 1,846,266

Other indirect employee costs 180,477 1 46,2 1 6

2,494,233 1,992,482

ii. The average number of persons employed during the year was:

2007 2006

Number Number

282 285

iii. Employees, other than directors, earning more than N60,000 per annum, whose duties were

wholly or mainly discharged in Nigeria, received emoluments (excluding pension contributions

and certain benefits) in the following ranges:

2007 2006

Number Number

N1,000,001 - N2,000,000 36 42

N2000,001 - N3,000,000 38 55

N3000,001 - N4,000,000 39 38

N4,000,001 - N5,000,000 32 25

Above N5,062,000 137 125

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(c) Directors’ remuneration

Directors’ remuneration was provided as follows:

2007 2006

N’000 N’000

Fees as directors 1 6,700 4,500

Other emoluments 1 16,303 1 02,282

133,003 106,782

The directors’ remuneration shown above (excluding pension contributions and certain benefits)

includes:

2007 2006

N’000 N’000

Chairman 6,350 5,277

Highest paid director 37,800 37,800

The emoluments of all other directors fell within the following ranges:

2007 2006

Number Number

Nil (Foreign non-executive directors) 2 2

Above N2,000,000 8 6

24. Earnings per share

Earnings per share are based on the profit after taxation for the year and the ordinary shares of

2.794 billion in issue during the year.

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25. Net cash flow from operating activities before changes in operating assets

This comprises:

2007 2006

Number Number

Profit before taxation 8,4 1 3,4 1 1 10,555,485

Adjustments to reconcile profit before

taxation to net cash flow from operations:

- depreciation 327,84 1 294,71 7

- gain on disposal of fixed assets (8,37 1 ) (15,313)

- provision on risk assets 628, 7 2 1 (394,239)

- investment income (33,0 1 6) (13,635)

- revaluation gain on short-term investments (1 2 1,642) -

Net cash flow from operating activities 9,206,944 10,427,015

26. Changes in operating assets

This comprises:

2007 2006

Number Number

(Increase)/decrease in operating assets:

- Short term investments 371 ,048 2,868,791

- Loans and advances (7,528,733) (7,900,342)

- Other facilities 327,757 276,184

- Other assets (3,008,06 1) (504,784)

- Advances under finance lease 48,466 (6,885)

Increase/(decrease) in operating liabilities:

- Deposits and other accounts 18,072,747 16,092,703

- Other facilities (327,757) (276,184)

- Other liabilities 6 ,778,223 1 ,587,873

- Provisions (47,5 14) (107,778)

14,686,176 12,029,578

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27. Business segment reporting

The segment information is presented in respect of the Bank’s business segments.

The Bank operates the following main business segments:

Corporate Banking - Includes loans, deposits and other transactions and balances

with corporate customers.

Commercial Banking - Includes loans, deposits and other transactions and balances

with medium- sized customers.

Financial Institutions - Includes transactions in investment and trading securities, inter-

bank placements and takings, loans, deposits and other transac-

tions and balances with other financial institutions.

The Bank’s business reporting information comprises:

Corporate Commercial Financial Total

banking banking institutions

N’000 N’000 N’000 N’000

REVENUE:

Interest income 3, 77 1 , 1 86 2,792,864 5, 1 1 6,802 11,680,852

Other income 98,52 1 3, 1 24,052 2,441 ,524 5,664,097

Total revenue 3,869,707 5,916,916 7,558,326 17,344,949

Loan loss recoveries/(expense) (738,600) 69,606 40,273 (628,7 2 1 )

Interest expense (433,994) (1 ,2 1 2,350) (449,752) (2,096,096)

2,697, 1 1 3 4,774,172 7,148,847 14,620,1 32

EXPENSES:

Depreciation 76, 1 62 1 1 7,374 134,305 327,84 1

Other operating expenses 1 ,589,967 2,272,330 2,016,583 5,878,880

1 ,666,129 2,389,704 2,150,888 6,206,72 1

Profit on ordinary activities

before taxation 1 ,030,984 2,384,468 4,997,959 8,413, 4 1 1

ASSETS AND LIABILITIES:

Total assets 51,302,303 5,655,194 78,921,492 135,878,989

Total liabilities 28,420,865 65,712,400 6,713,916 100,847, 1 8 1

Net assets 22,881,438 (60,057,206) 72,207,576 35,031,808

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28. Related party transactions

(a) 81.9% of the Bank’s share capital is held by Citibank Overseas Investment Corporation.

(b) In the normal course of the Bank’s business, the Bank enters into business transactions with

other Citigroup branches at commercial rates.

(c) Certain of the Bank’s directors are also directors of other companies with whom the Bank does

business. All such transactions are conducted at arm’s length.

(d) At the end of the year, the Bank had an outstanding credit facility of N226,283,377 with a

company in which a director of the Bank is also a director. The credit facility which was granted

at terms comparable to other credit facilities in the Bank’s credit portfolio was performing.

29. Contraventions

The Bank did not contravene any of the applicable laws and guidelines in the financial year ended

31 December 2007 (2006: nil).

30. Prior-year comparatives

Certain prior year balances have been reclassified in line with current year classifications.

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2007 2006

N’000 % N’000 %

Gross earnings 1 7,344,949 16,522,399

Interest expense:

- Foreign (473,999) ( 1 74,359)

- Local (1 ,622,097) (1 ,496,5 1 0)

15,248,853 14,851 ,530

Loan loss (provision)/write-backs (net) (628, 72 1 ) 394,239

Bought-in materials and services - Local (3,384,647) (2,403,085)

11 ,235,485 100 12,842,684 100

Applied to pay:

- Employee costs 2,494,233 22 1,992,482 16

- Government as taxes 1 ,467,3 1 3 13 2,833, 3 7 1 22

Retained in the business:

- Depreciation 327,84 1 3 2 94,7 1 7 2

- Profit for the year

(including statutory and

small scale industries reserves) 6,946,098 62 7 ,722, 1 14 60

11 ,235,485 100 12,842,684 100

Statement of Value Added

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2007 2006 2005 2004 2003

N’000 N’000 N’000 N’000 N’000

Cash and short-term funds 45,437, 1 1 2 38,041 ,624 22,745,877 28,615,709 32,297,864

Short term investments 24, 1 1 7,679 24,367,085 27,235,876 18,238,200 18,352,257

Loans and advances 42,386,004 35,489,755 27,588,166 15,940,41 6 21,900,047

Other facilities 560,936 885,4 1 5 1 , 158,838 1 ,326,993 2,598,210

Advances under finance lease 97,246 1 45,227 1 38,4 1 1 226,203 660,793

Other assets 4,033,018 1 ,024,957 520, 173 537,724 589,683

Long-term investments 15,600,006 8,750,332 5,514, 135 322,700 304,700

Fixed assets 3,646,988 2,676,840 2,077,505 1 ,039,4 1 9 932,137

135,878,989 111,381,235 86,978,981 66,247,364 77,635,691

Deposits and other accounts 79, 134,721 61,061,974 44,969,271 42,066,574 37,683,615

Other facilities 566,602 894,359 1 , 1 70,543 1 ,398,922 2,883,766

Other liabilities 18,570,906 11,792,683 10,204,810 8,496,691 24,243,776

Provisions 331 ,325 378,839 876,917 - -

Taxation payable 1 ,813,365 3,376,72 1 1 ,439,335 1 ,734,957 1 ,556,891

Deferred tax 430,262 63,706 197,924 177,083 172,863

Share capital 2,793,777 2,793,777 2,762,733 1,500,000 1,500,000

Share premium 11 ,643,995 11 ,643,995 1 1 ,364,593 - -

Reserves 20,594,036 19,375,181 13,992,855 10,873, 137 9,594,780

135,878,989 111,381,235 86,978,981 66,247,364 77,635,691

Other commitments and

Contingencies 58,856,226 29,924,882 46,697,950 23,068,094 28,210,364

Gross earnings 17,344,949 16,522,399 10,032,697 9,881 , 104 10,538,591

Profit before taxation 8,4 13,4 1 1 10,555,485 4,365,658 5,3 5 1 ,342 4,822,887

Taxation 1 ,467,313 (2,833,371) (1 ,245,940) (1 ,772,985) (1 ,5 1 9,327)

Profit after taxation 6,946,098 7,722,1 14 3, 1 1 9,718 3,578,357 3,303,560

Earnings per share 249k 276k 187k 239k 220k

Declared dividend per share* 205k 140k - 153k 228k

Number of Ordinary shares of

N1.00 (million) 2,794 2,794 2,763 1 ,500 1 ,500

* Declared dividend represents the dividend proposed for the preceding year but declared during

the year.

Five-Year Financial Summary

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Year in Pictures

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Year in Pictures

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Year in Pictures

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Year in Pictures

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Year in Pictures

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Year in Pictures

Annual Report 2007

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Year in Pictures

Citibank Nigeria Limited (formerly Nigeria International Bank Ltd.)

27 Kofo Abayomi Street

Victoria Island, Lagos, Nigeria

Tel: +234 1 279 8400 or 463 8400

2007 · annual report 2007 chairman’s statement nigeria new administration in 2007, nigeria...

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