CBN records N35.4b income in 2014

The Guardian Nigeria|Chijioke Nelson

Appraises 200 applications for N300b real sector fund 
The Central Bank of Nigeria (CBN) has posted a net income N35.4 billion for its 2014 financial year, compared to N209.6 billion recorded in 2013.
The development, which represented an 83.1 per cent fall in apex bank’s net income in the period under review, was however, not attributed to any development at the moment, but may not be totally unconnected to the nation’s economic challenges in the last one year.
CBN, in the audited financial statements for 2013 and 2014, said it fully adopted the International Financial Reporting Standards (IFRS) for the report and already approved by its noard in accordance with the provisions of the CBN Act 2007.
The IFRS is one of the frameworks internationally recognized and accepted, which mandates its adopters to prepare consolidated financial statements.
The IFRS requirement implies that the financial statement of the CBN be consolidated with those of its investee entities- Nigeria Export-Import Bank, Abuja Securities and Commodities Exchange, Bank of Industry, Bank of Agriculture, Nigeria Interbank Settlement System, National Economic Reconstruction Fund, Financial Markets Dealers Quotation, African Finance Corporation and Agricultural Credit Guarantee Fund.
The development also showed that CBN has full IFRS-compliant financial statements now and going forward, which hitherto, had been prepared under the Central Bank of Nigeria (CBN) framework.
Already, 80 per cent of the two net income of the bank has been remitted to the Federal Government, according to a statement from the bank, in accordance with the Fiscal Responsibility Act, while the balance of 20 per cent has been transferred to the Reserves within the bank.
Explaining the challenges associated with the framework for central Banks all over the world, the bank in a note to The Guardian, listed the non-profit-oriented mandates of central banks in their roles of price and financial system stability and economic growth that could be contradicted by the application of some of these IFRS standards, which are for direct profit-motivated commercial entities.
Another challenge, it noted, is the statutory constraints on the central banks, which have inhibited seamless adoption, while on the other hand, some central banks which claim IFRS adoption did so partially within statutory constraints.
CBN pointed out that it was however, able to conclude IFRS adoption within a period of two years, against global experience that indicated that many of the IFRS adopting central or reserve banks took longer periods of time to do so.
Meanwhile, the apex bank said it is still processing the applications of over 200 persons, who have indicated interest in raising investible fund trough its N300 billion Real Sector Support Facility (RSSF).
Explaining that it is yet to disburse any fund to any real sector operator or entrepreneur, a statement signed by the Director of Corporate Communications, CBN, Alhaji Ibrahim Mu’azu, noted that it is imperative to clear the air, given speculations making the rounds.
RSSF was scripted to provide long-term and low-interest financing intervention as a support to the real sector of the Nigerian economy, as well as increase output, create jobs and conserve the country’s foreign exchange.
“The appraisal of the applications of the Small and Medium Enterprises for the N300 billion Real Sector Support Facility is still in progress and in strict compliance with the eligibility criteria of the facility,” he said.
Assuring that recommendations would be made to management of the bank for approval and subsequent disbursement that as soon as the appraisals are concluded, he appealed for a little patience to enable a thorough work.
CBN had in March this year, announced the establishment of the RSSF, which would be administered at an all-interest rate charge of nine per cent per yearly, payable on a quarterly basis, with the central entitled to earn three per cent, while commercial banks take the remaining six per cent spread.
The guidelines for accessing the fund also noted that large enterprises are to entitled to support as well as start-ups with expansion financing needs of N500 million up, to a maximum of N10 billion.