2928
FINANCIAL REPORTS
3130
DIRECTORS, OFFICERS AND ADVISORS
DIRECTORS
MrOlayemiCardoso Chairman
MrOmarHafeez ManagingDirector
MrAkinsowonDawodu ExecutiveDirector
MrFataiKarim ExecutiveDirector
MrTariqMasaud ExecutiveDirector
MrsFunmiOgunlesi ExecutiveDirector
MrAdeAyeyemi NonExecutiveDirector
MrMichaelMurray-Bruce NonExecutiveDirector
DrHilaryOnyiuke NonExecutiveDirector
MrKhalidQurashi NonExecutiveDirector
ChiefArthurMbanefoCON IndependentDirector
Prof.YemiOsinbajoSAN IndependentDirector
MrsOlusolaFagbure CompanySecretary
CORPORATE HEAD OFFICE
CitibankNigeriaLimited
CharlesS.SankeyHouse
27,KofoAbayomiStreet
VictoriaIsland,Lagos.
Telephone: +234012798400
+234014638400
Website: www.citigroup.com/nigeria
AUDITORS
PricewaterhouseCoopers
252E,MuriOkunolaStreet,
VictoriaIsland,Lagos
Telephone: +234(1)2711700
Website: www.pwc.com/ng
EngagementPartner:PatrickObianwa
FRCno.:FRC/2013/ICAN/00000000880
DIRECTORS’ REPORTFOR THE YEAR ENDED 31 DECEMBER 2013
ThedirectorshavepleasureinpresentingtheirannualreportontheaffairsofCitibankNigeriaLimitedanditssubsidiaries
(“theGroup”)togetherwiththefinancialstatementsandauditors’reportfortheyearended31December2013.
LEGAL FORM
TheBankwasincorporatedinNigeriaundertheCompaniesActasaprivatelimitedliabilitycompanyon2May1984.Itwas
grantedalicenseon14September1984tocarryonthebusinessofcommercialbankingandcommencedbusinesson14
September1984.
PRINCIPAL ACTIVITY AND BUSINESS REVIEW
TheprincipalactivityoftheGroupistheprovisionofcommercialbankingservicestoitscustomers.Suchservicesinclude
transactionalservices,corporatefinance,provisionoffinance,custodialbusinessandmoneymarketandtradingactivities.
TheBankhasasubsidiary,NigeriaInternationalBankNomineesLimited.Thecompanyisanomineecompanythatactsas
theregisteredholderofsecuritiespurchasedforcustomersoftheBank’sCustodialbusiness.
OPERATING RESULTS
TheNetoperatingincomeincreasedby1%andprofitbeforetaxoftheGroupalsoincreasedmarginallyoverprioryear.The
directorsrecommendtheapprovalofafinaldividendofN11,733,864,361.80(N4.20kpershare)(2012:N11,035,420,054.55
(N3.95kpershare))fromtheoutstandingbalanceintheretainedearningsaccountasat31December2013.Thedividends
aresubjecttodeductionofwithholdingtaxof10%.ThereisnofurtherpotentialtaxontheGrouparisingfrompaymentof
dividends.
HighlightsoftheGroup’soperatingresultsfortheyearunderreviewareasfollows:
2013 2012
N’000 N’000
NetoperatingIncome 28,573,453 28,157,312
Profitbeforetax 16,910,222 16,899,258
Incometaxexpense (3,267,092) (3,874,866)
Profitfortheyear 13,643,130 13,024,392
Othercomprehensiveincomefortheyear,netoftax (1,858,058) 4,788,575
Totalcomprehensiveincomefortheyear 11,785,072 17,812,967
3332
DIRECTORS’ SHAREHOLDING
ThefollowingdirectorsoftheBankheldofficeduringtheyearandhaddirectandindirectinterestsintheissuedsharecapital
of theBankasrecorded in theregisterofdirectors’shareholdingand/orasnotifiedbythedirectors for thepurposesof
sections275and276oftheCompaniesandAlliedMattersAct,asnotedbelow:
Direct Shareholding
Director Position Date of appointment/ Number of Number of
Resignation Ordinary Shares Ordinary Shares
held held
in 2013 in 2012
1.Mr.OlayemiCardoso Chairman - -
2.Mr.OmarHafeez
(Pakistani) ManagingDirector - -
3.Mr.Akinsowon
Dawodu ExecutiveDirector Appointed-July25,2013 - -
4.Mr.FataiKarim ExecutiveDirector - -
5.Mr.TariqMasaud
(Pakistani) ExecutiveDirector - -
6.Mrs.FunmiOgunlesi ExecutiveDirector - -
7.Mr.AdeAyeyemi NonExecutiveDirector - -
8.Mr.Michael
Murray-Bruce NonExecutiveDirector - -
9.Dr.HilaryOnyiuke NonExecutiveDirector - -
10.Mr.KhalidQurashi
(British) NonExecutiveDirector - -
11.Mr.NaveedRiaz
(American) NonExecutiveDirector Resigned-October4,2013 - -
12.ChiefArthurMbanefo
CON IndependentDirector - -
13.Prof.YemiOsinbajo
SAN IndependentDirector - -
Dr.HilaryOnyiukehasanindirectshareholdingthroughGauthierInvestmentsLtdwhichhasashareholdingof33,445,769
ordinaryshares.
Mr.OlayemiCardosohasanindirectshareholdingthroughtheEstateofF.B.Cardosowhichhasashareholdingof30,196,109
ordinaryshares.
Mr. Michael Murray-Bruce has an indirect shareholding through Manilla Properties Limited which has a shareholding of
6,490,360ordinaryshares.
SincethelastAnnualGeneralMeeting,Mr.NaveedRiazresignedfromtheboardandMr.AkinsowonDawoduwasappointed
totheBoard.
ThedirectorstoretirebyrotationatthenextAnnualGeneralMeeting(AGM)areMr.OlayemiCardoso,Mr.AdeAyeyemiand
Mr.KhalidQurashi.
PROPERTY AND EQUIPMENT
InformationrelatingtochangesinpropertyandequipmentisgiveninNote25ofthefinancialstatements.
SHAREHOLDING ANALYSIS
TheshareholdingpatternoftheGroupasat31December2013isasstatedbelow:
Share Range No. of Percentage of No. of Holdings Percentage
Shareholders Shareholders (%) Holdings
500,001 – 1,000,000 1 4 950,011 -
1,000,001 – 5,000,000 - - - -
5,000,001 – 10,000,000 5 19 34,365,234 1
10,000,001 – 50,000,000 18 69 409,856,643 15
50,000,001 – 100,000,000 1 4 60,416,666 2
100,000,001 – 500,000,000 - - - -
500,000,001 – 1,000,000,000 - - - -
ForeignShareholdersAbove 1,000,000,000 1 4 2,288,188,675 82
TOTAL 26 100 2,793,777,229 100
SUBSTANTIAL INTEREST IN SHARES
Accordingtotheregisterofmembersasat31December2013,noshareholderheldmorethan5%oftheissuedshare
capitaloftheBank,exceptthefollowing:
Shareholder No. of shares held Percentage of shareholding
CitibankOverseasInvestmentCorporation 2,288,188,675 81.9%
DIRECTORS
Directors’remunerationwaspaidasfollows:
2013 2012
N’000 N’000
Feesandsittingallowances 51,750 37,400
Executivecompensation 161,100 190,002
TOTAL 212,850 227,402
3534
Citibank Nigeria Limited Donations N
1 AbujaChildren’sHome 400,000
2 ArrowofGodOrphanage 500,000
3 AtundaOluSchool(ForPhysicallyHandicappedChildren) 750,000
4 BemaHomesfortheLessPriviledged 400,000
5 CareOrganizationPublicEnlightenment(COPE) 500,000
6 CCWAInternational 400,000
7 ChesireHome(Borokiri) 300,000
8 ChildLifeLine(Yaba&Ikorodu) 700,000
9 ChildrenEmergencyReliefFoundation 500,000
10 CompassionHomeforthePhysicallyHandicapped 300,000
11 DeMarillacCentre,PortHarcourt 400,000
12 DownSyndromeAssociationofNigeria 500,000
13 GreenPastureandHomeInitiative 500,000
14 HeartofGoldChildren’sHospice 1,000,000
15 HomefortheElderly,PortHarcourt 400,000
16 MedicalMissionariesofMaryHospital(Lugbe) 400,000
17 ModupeColeMemorialChildCareandTreatmentHome 1,000,000
18 NationalOrthopedicSpecialSchool(Igbobi) 500,000
19 NgwaRoadMotherlessBabiesHome 400,000
20NigerianRedCross 500,000
21 OurLadyofMercyOrphanage 400,000
22PacelliSchool(FortheBlind) 500,000
23PortHarcourtChildren’sHomo,Borokiri 300,000
24RightStepsIncorporated 400,000
25RosaliHomeRehabilitationCentre(Eleme,PH) 400,000
26SeventhDayAdventistMotherlessBabiesHome 400,000
27SickleCellClub 500,000
28SOSChildren’sVillage 500,000
29St.Anne’sOrphanage 400,000
30StartRightConsulting 400,000
31 TheBookTrust 400,000
32TheChild(ForMentallyRetardedChildren) 400,000
33WesleySchool1(ForDeafChildren) 500,000
34WesleySchool2(ForDeafChildren) 500,000
Sub- total 16,350,000
Citigroup Foundation Donations N
1 CitiMicro-entrepreneurshipAwardsProgram 9,604,800
3 FateFoundation 6,403,200
4 HopeWorldwide 4,962,480
5 JuniorAchievement 6,403,200
6 Leadership,Effectiveness,AccountabilityandProfessionalism 6,403,200
Sub-total 33,776,880
TOTAL 50,126,880
EMPLOYMENT OF DISABLED PERSONS
TheGroupcontinuestomaintainapolicyofgivingfairconsiderationtoapplicationforemploymentmadebydisabledpersons
withdueregardtotheirabilitiesandaptitudes.TheGroup’spoliciesprohibitdiscriminationagainstdisabledpersonsinthere-
cruitment,trainingandcareerdevelopmentofemployees.Intheeventofmembersofstaffbecomingdisabled,effortswillbe
madetoensurethattheiremploymentwiththeGroupcontinuesandappropriatetrainingarrangedtoensurethattheyfitinto
theGroup’sworkingenvironment.
HEALTH, SAFETY AND WELFARE AT WORK
TheGroupenforcesstricthealthandsafetyrulesandpracticesattheworkenvironment,whicharereviewedandtested
regularly.Inaddition,medicalfacilitiesareprovidedforstaffandtheirimmediatefamiliesattheGroup’sexpense.
Firepreventionandfire-fightingequipmentareinstalledinstrategiclocationswithintheGroup’spremises.
TheGroupoperatesbothGroupPersonalAccidentandWorkmen’sCompensationInsurancecoverforthebenefitofits
employees.ItisalsofullycompliantwiththeprovisionsoftheEmployeeCompensationAct.TheGroupalsooperatesa
contributorypensionplaninlinewiththePensionReformAct,2004.
EMPLOYEE INVOLVEMENT AND TRAINING
TheGroupensures,throughvariousfora,thatemployeesareinformedonmattersconcerningthem.Formalandinformal
channelsarealsoemployedincommunicationwithemployeeswithanappropriatetwo-wayfeedbackmechanism.
InaccordancewiththeGroup’spolicyofcontinuousdevelopment,theGroupdrawsextensivelyonCitigroup’straining
programmesaroundtheworld.Theprogrammesincludeonthejobtraining,classroomsessionsandweb-basedtraining
programmeswhichareavailabletoallstaff.Inaddition,employeesoftheGrouparenominatedtoattendbothlocallyand
internationallyorganizedcourses.
DIVERSITY IN EMPLOYMENT
TheGrouprecognisesthattherecruitment,involvementandadvancementofwomenandadiverseworkforcearebusiness
imperatives.Duringthefinancialyearended31December2013:
-Therewere88womenoutof243employeescomprising36%ofthetotalnumberofemployees;
-Therewas1womanoutof12DirectorsontheBoardofDirectors;
-Therewere35womenoutof104topmanagementstaff;
-Therewere34womenoutof100topmanagementstaffbetweenAssistantGeneralManagertoGeneralManagergrade;
-Therewas1womanoutof4topmanagementstaffbetweenExecutiveDirectortoChiefExecutiveOfficer;
-Thebankhadnopersonswithdisabilitiesinitsemployment.
TheGroupiscommittedtomaintainingapositiveworkenvironmentandtoconductingbusinessinapositive,professional
mannerbyconsistentlyensuringequalemploymentopportunity.TheGrouphasprogramsaimedatachievinggenderbalance
whichincludedevelopmentalprogramstargetedforwomen;mentoring;andpoliciesthatsupportWork-Lifebalance.
Inaddition,toabovecharitablecontributions,theultimateparentcompany,CitigroupInc,throughCitigroupFoundationmade
thefollowingdonationsinNigeria:
POST BALANCE SHEET EVENTS
TherewerenopostbalancesheeteventswhichcouldhaveamaterialeffectonthefinancialpositionoftheGroupasat31
December2013orthestatementofprofitandlossandothercomprehensiveincomefortheyearendedonthatdatethathave
notbeenadequatelyprovidedforordisclosed.
DONATIONS AND CHARITABLE GIFTS
TheGroupandCitigroupFoundationmadecontributionstocharitableandnon-politicalorganizationsamountingto
N50,126,880(2012:N64,274,150)duringtheyearasanalyzedbelow:
3736
CONSUMER HELP DESK
TheGrouphasestablishedaconsumercomplaintshelpdesktohandleallcategoriesofcustomercomplaints.Duringthe
financialyearended31December,2013,thesummaryofconsumercomplaintsareascontainedinthetablebelow:
S/N Number Amount Claimed Amount Refunded
2012 2013 2012 2013 2012 2013
1 PendingcomplaintsB/F* - 3 - 787,500 - 1,197,000
2 Receivedcomplaints 119 26 86,419,025 26,001,763 22,706,306 10,726,705
3 Resolvedcomplaints 116 28 85,631,525 17,883,613 22,706,306 9,150,720
4 Unresolvedcomplaintsescalatedto
CBNforintervention - 1 - 8,118,151 - 1,575,985
5 Unresolvedcomplaintspendingwith
thebankC/F 3 - 787,500 - 1,197,000 -
*TheamountclaimedB/Fwasbasedononeaccount,whileamountrefundedwasbasedonmultipleaccounts.
Therewerenounresolvedcomplaintsasatyearend.
AUDITORS
PricewaterhouseCoopershaveindicatedtheirwillingnesstocontinueinofficeasauditorsinaccordancewith
Section357(2)oftheCompaniesandAlliedMattersAct.
CharlesS.SankeyHouse BYORDEROFTHEBOARD
27,KofoAbayomiStreet
VictoriaIsland
Lagos
March6,2014 OLUSOLA FAGBURE,CompanySecretary
FRC/2013/CIBN/00000002203
CORPORATE GOVERNANCE REPORTFOR THE YEAR ENDED 31 DECEMBER 2013
Citibank Nigeria Limited is committed to ensuring the implementation of good corporate governance principles in all its
activities.CitibankNigeriaLimitedadherestotheprovisionsoftheCentralBankofNigeriaCodeonCorporateGovernance
forBanksinNigeria-PostConsolidation(‘theCode’)andtoCitigroupcorporategovernanceprinciples.Corporategovernance
complianceismonitoredandamonthlyreportontheBank’scompliancewiththeCodeissubmittedtotheCentralBankof
Nigeria.TheBoardofDirectorsundergoestrainingincorporategovernancebestpractices.
THE BOARD OF DIRECTORS
The Board of Directors consists of twelve members comprising the Chairman, the Managing Director, six Non-Executive
Directors and four Executive Directors. Two of the Non-Executive Directors are Independent Directors, appointed based
oncriterialaiddownbytheCentralBankofNigeria.NeitheroftheIndependentDirectorshasanyshareholdinginterestor
businessrelationshipwiththeBank.TheDirectorsandtheirshareholdingsarelistedintheDirectors’report.
TheBoardisresponsiblefortheoversightofexecutivemanagement,ensuringthattheBank’soperationsareconductedin
accordancewithlegalandregulatoryrequirements,approvingandreviewingcorporatestrategyandperformance,andfor
ensuringthattherightsoftheshareholdersareprotectedatalltimes.ThemembersoftheBoardpossessthenecessary
experienceandexpertisetoexercisetheiroversightfunctions.
InaccordancewiththeprovisionsoftheCode,theofficeandresponsibilitiesoftheChairmanandtheManagingDirector/Chief
Executiveareseparate.
The Board meets quarterly and additional meetings are convened as required. The Board may take decisions between
meetingsbywayofwrittenresolution,asprovidedforintheArticlesofAssociationoftheBank.In2013theBoardmetfive
times.
TheBoardhasdelegatedsomeofitsresponsibilitiestothefollowingstandingboardcommittees:RiskManagementCommittee,
AuditCommittee,CreditCommitteeandtheExecutiveDirectorsRemunerationCommittee.Eachofthesecommitteesreports
totheBoardonitsactivities.TheChairmanoftheBoardisnotamemberofanyoftheboardcommittees.
Board Committees
a) The Risk Management Committee
TheRiskManagementCommitteeconsistsofsevendirectors,twoofwhom,includingtheChairmanoftheCommittee,areNon-
ExecutiveDirectors.TheCommitteeisresponsibleforoverseeingtheBank’sRiskManagementpoliciesandproceduresinthe
areasoffranchise,operational,creditandmarketrisk.TheCommitteemeetsquarterlyandmetfourtimesduringtheyear.
b) The Credit Committee
TheCreditCommitteeconsistsoffivedirectors,twoofwhom,includingtheChairmanoftheCommitteeareNon-Executive
Directors.TheCommitteeisresponsibleforapprovingcreditsabovesuchlimitsasmaybeprescribedbytheBoardofDirectors
fromtimetotime.TheCommitteemeetsquarterlyandmetfourtimesduringtheyear.
c) The Audit Committee
TheAuditCommitteeconsistsoftwoshareholdersandtwonon-executivedirectors.TheChairmanoftheCommittee isa
shareholder.
3938
The Committee’s responsibilities include the review of the integrity of the Bank’s financial reporting, oversight of the
independenceandobjectivityoftheexternalauditors,thereviewofthereportsofexternalauditorsandregulatoryagencies
andmanagementresponsesthereto,andthereviewoftheeffectivenessoftheBank’ssystemofaccountingand internal
control.
DuringtheyeartheCommitteeapprovedtheexternalauditors’termsofengagementandscopeofworkandalsoreviewedthe
internalauditor’sauditplan.TheCommitteereceivedregularinternalauditreportsfromtheBank’sinternalauditor.Members
oftheCommitteehaveunrestrictedaccesstotheBank’sexternalauditors.
TheCommitteemeetsquarterlyandmetfourtimesduringtheyear.
d) Executive Directors Remuneration Committee
TheCommitteeismadeupofthreenon-executivedirectorsandisresponsiblefordeterminingtheremunerationofExecutive
Directors.
GENERAL MEETINGS
ThelastAnnualGeneralMeetingwasheldonApril25,2013.AnExtra-ordinaryGeneralMeetingwasheldonDecember5,
2013.
RISK AND CONTROLS
InlinewithCitigrouppolicies,theBankmaintainsastrongcontrolenvironment.Theinternalcontrolsystemisdesignedto
achieveefficiencyandeffectivenessofoperations,reliabilityoffinancialreportingandcompliancewithapplicablelawsand
regulationsatalllevelsoftheGroupasrequiredbytheCode.
Robustriskmanagementpoliciesandmechanismshavebeenputinplacetoensureidentificationofriskandeffectivecontrol.
TheBoard,throughtheBoardRiskManagementCommittee,overseestheBank’sriskmanagementpolicies.
WHISTLE BLOWING PROCEDURES
InlinewiththeBank’scommitmenttoinstillbestcorporategovernancepractices,theBankhasestablishedawhistleblowing
procedurethatensuresanonymity.TheBankhasadedicatedwhistleblowinghotlineande-mailaddress.TheChiefCompliance
OfficerforwardsmonthlyreturnstotheCentralBankofNigeriaonallwhistle-blowingreportsandcorporate
governancebreaches.
CODE OF CONDUCT
TheBankhasaCodeofConductwhichallofficersoftheBankareexpectedtoadhereto.Allstaffareexpectedtostriveto
maintainthehigheststandardsofethicalconductandintegrityinallaspectsoftheirprofessionallifeasprescribedinthe
CodeofConduct.
MANAGEMENT SUCCESSION
TheBankhasastrongmanagementteamandadocumentedsuccessionplanforeveryexecutiverolewithintheBank.
STATEMENT OF RESPONSIBILITY AND APPROVALFOR THE YEAR ENDED 31 DECEMBER 2013
Responsibility for Annual Financial Statements
InaccordancewiththeprovisionsoftheCompaniesandAlliedMattersActandtheBanksandOtherFinancialInstitutions
Act,thedirectorsareresponsibleforthepreparationoftheannualfinancialstatementswhichgiveatrueandfairviewofthe
stateofaffairsoftheGroupattheendoftheyearandofthefinancialperformanceandcashflowsfortheyearthenended.
Theresponsibilitiesincludeensuringthat:
i. theGroupkeepsproperaccountingrecordsthatdisclose,withreasonableaccuracy,thefinancialpositionofthe
GroupandcomplywiththerequirementsoftheCompaniesandAlliedMattersActandtheBanksandOtherFinancial
InstitutionsAct;
ii. appropriateandadequateinternalcontrolsareestablishedtosafeguarditsassetsandtopreventanddetectfraudand
otherirregularities;
iii. theGrouppreparesitsfinancialstatementsusingsuitableaccountingpoliciessupportedbyreasonableandprudent
judgementsandestimates,thatareconsistentlyapplied;and
iv. itisappropriateforthefinancialstatementstobepreparedonagoingconcernbasis.
The directors accept responsibility for the annual financial statements, which have been prepared using appropriate
accountingpoliciessupportedbyreasonableandprudentjudgementsandestimates,inconformitywith,
-InternationalFinancialReportingStandards;
-PrudentialGuidelinesforLicensedBanks;
-RelevantcircularsissuedbytheCentralBankofNigeria;
-TherequirementsoftheBanksandOtherFinancialInstitutionsAct;
-TherequirementsoftheCompaniesandAlliedMattersAct;and
-TherequirementsoftheFinancialReportingCouncilofNigeriaAct.
Thedirectorsareoftheopinionthatthefinancialstatementsgiveatrueandfairviewofthestateofthefinancialpositionof
theBankandofitsfinancialperformanceandcashflowsfortheyear.
The directors further accept responsibility for the maintenance of accounting records that may be relied upon in the
preparationoffinancialstatements,aswellasadequatesystemsofinternalfinancialcontrol.
NothinghascometotheattentionofthedirectorstoindicatethattheGroupwillnotremainagoingconcernforat least
twelvemonthsfromthedateofthisstatement.
SIGNEDONBEHALFOFTHEBOARDOFDIRECTORSBY:
MR. OLAYEMI CARDOSO MR. OMAR HAFEEZ
Chairman ManagingDirector
March6,2014
4140
REPORT OF THE AUDIT COMMITTEEFOR THE YEAR ENDED 31 DECEMBER 2013
TothemembersofCitibankNigeriaLimited.
ThemembersoftheBoardAuditCommitteeofCitibankNigeriaLimitedherebyreportasfollows:
-WehaveexercisedtheresponsibilitiesassignedtotheBoardAuditCommitteebytheCentralBankofNigeria’sCodeof
CorporateGovernanceforBanksandacknowledgetheco-operationofmanagementandstaffintheconductofthese
responsibilities.WeareoftheopinionthattheaccountingandreportingpoliciesoftheGroupareinaccordancewithle-
galrequirementsandagreedethicalpracticesandthatthescopeandplanningofboththeexternalandinternalaudits
fortheyearended31December2013weresatisfactoryandreinforcetheGroup’sinternalcontrolsystems.
-WearesatisfiedthattheGrouphascompliedwiththeprovisionsofCentralBankofNigeriacircularBSD/1/2004dat-
ed18February2004on“Disclosureofinsiderrelatedcreditsinthefinancialstatementsofbanks”,andherebyconfirm
thatthereisnooutstandingcreditexposureasat31December2013(31December2012:Nil).
-WehavedeliberatedwiththeExternalAuditors,whohaveconfirmedthatnecessarycooperationwasreceivedfrom
Managementinthecourseoftheirstatutoryauditandwearesatisfiedwithmanagement’sresponsestotheExternal
Auditor’srecommendationforimprovementandwiththeeffectivenessoftheGroup’ssystemofaccountingandinter-
nalcontrol.
-WearesatisfiedthattheGrouphasputinplacestronginternalcontrolstructuresandthelevelofcomplianceiscon-
sideredsatisfactory.
CHIEF EDET JAMES AMANA
Chairman,AuditCommittee
March6,2014
MembersoftheAuditCommitteeare:
1 ChiefEdetJamesAmana-Chairman
2 Mr.MichaelMurray-Bruce
3 ChiefArthurMbanefoCON
4ChiefAbelUbeku
DCSL Corporate Services Limited 235 Ikorodu Road Abuja Office: Ilupeju 4th Floor, Bank of Industry Building P. O. Box 965, Marina Central Business District Lagos, Nigeria Abuja, Nigeria Tel: +234 9 4614902-5 Tel: +234 1 2717817 Port-Harcourt Office: Fax: +234 1 2717801 15 Emeyal Street, GRA www.dcsl.com.ng Phase II, Port Harcourt RC NO. 352393
The Chairman Board of Directors Citibank Nigeria Limited 27 Kofo Abayomi Street Victoria Island Lagos REPORT OF THE EXTERNAL CONSULTANTS ON THE EVALUATION OF THE BOARD OF DIRECTORS OF CITIBANK NIGERIA LIMITED FOR THE YEAR ENDED 31 DECEMBER 2013
DCSL Corporate Services Limited was engaged to carry out an evaluation of the Board of Citibank Nigeria Ltd (Citibank) as required by Section 5.4.6 of the Central Bank of Nigeria (CBN) Code of Corporate Governance (“the Code”), covering all aspects of the Board’s structure and composition, responsibilities, processes and relationships for the period-ended 31st December 2013. Our responsibility is to reach a conclusion on the Board’s performance based on work carried out within the scope of our engagement as contained in our engagement letter dated the 9th January 2014. The exercise entailed an appraisal of the Board and benchmarking the Board’s practices against the CBN Code using the following key corporate governance considerations:
Board Structure and Composition Strategy and Planning Board Operations and Effectiveness Measuring and Monitoring Performance Risk Management and Compliance Corporate Citizenship ( social, ethics, environment) Transparency & Disclosure
On the basis of our work, it is our conclusion that nothing has come to our attention which causes us to believe that the Board’s performance does not comply in any material respect with the provisions of the Code. Our recommendations aimed at ensuring the continuation of this stellar performance are contained in our detailed Report. Yours faithfully, For: DCSL Corporate Services Ltd
Bisi Adeyemi Managing Director March, 2014
Directors: ● Abel Ajayi (Chairman) ● Obi Ogbechi ● Seni Ogunsanya ● Adebisi Adeyemi (Managing Director)
4544
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
FOR THE YEAR ENDED 31 DECEMBER Note 2013 2012
N’000 N’000
Interestincome 5. 20,328,700 21,594,061
Interestexpense 6. (4,808,296) (6,187,529)
Net interest income 15,520,404 15,406,532
Feeandcommissionincome 7. 4,205,137 4,184,170
Feeandcommissionexpense 7. (34,160) (20,435)
Netgains/(losses)fromfinancialinstrumentsheldfortrading 8. 5,074,127 6,253,435
Netinvestmentincome 9. 3,622,999 2,157,284
Otheroperatingincome 10. 184,946 176,326
Net operating income 28,573,453 28,157,312
Personnelexpenses 11. (5,334,864) (5,156,267)
Otheroperatingexpenses 12. (5,616,893) (5,231,571)
Amortisationofintangibleassets 26. (7,507) (8,189)
Depreciationofproperty,plantandequipment 25. (345,628) (676,708)
Netcreditlosses 13. (436,536) (241,971)
Operating profit 16,832,025 16,842,606
Shareofprofitofassociatesaccountedforusingequitymethod 24. 78,197 56,652
Profit before tax 16,910,222 16,899,258
Incometaxexpense 14. (3,267,092) (3,874,866)
Profit for the year 13,643,130 13,024,392
Profit attributable to:
Ownersoftheparent 13,643,130 13,024,392
Non-controllinginterests - -
13,643,130 13,024,392
Earnings per share attributable to the equity holders of the parent entity during the year
Basic 15. 4.99 4.76
Diluted 15. 4.99 4.76
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER Notes 2013 2012
N’000 N’000
Profit for the year 13,643,130 13,024,392
Other comprehensive income:
Itemsthatmaybesubsequentlyreclassifiedtoprofitorloss:
Fairvaluereserve(available-for-salesecurities):
Netchangeinfairvalue 21. (756,683) 6 ,886,739
Netamounttransferredtoprofitorloss 21. (1,897,686) (45,917)
Nettaxonitemstakenthroughothercomprehensiveincome 14. 796,311 (2,052,247)
Other comprehensive income for the year, net of tax (1,858,058) 4,788,575
Total comprehensive income for the year 11,785,072 17,812,967
Total comprehensive income attributable to:
Ownersoftheparent 11,785,072 17,812,967
Non-controllinginterests - -
11,785,072 17,812,967
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Thefinancialstatementswerecertifiedby:
ManagingDirector:Mr.OmarHafeez ChiefFinanceOfficer:HildaMucuha
FRC/2013/CIBN/00000002202 FRC/2013/ICAN/00000001241
Thenotes1to43areanintegralpartoftheseconsolidatedfinancialstatements.Thefinancialstatementsonpages44to112
wereapprovedandauthorisedforissuebytheBoardofDirectorsonMarch62014andweresignedonitsbehalfby:
Chairman:Mr.OlayemiCardoso ManagingDirector:Mr.OmarHafeez
FRC/2013/CISN/00000002200 FRC/2013/CIBN/00000002202
31 December 31 December
AS AT Note 2013 2012
N’000 N’000
ASSETS
CashandbalanceswithCentralBankofNigeria 16. 22,996,953 20,762,072
Loansandadvancestobanks 17. 122,258,126 121,241,497
Loansandadvancestocustomers 18. 81,538,729 61,168,214
Tradingsecurities 19. 14,466,556 10,962,881
Derivativefinancialinstruments 20. 14,237 167,107
Investmentsecurities 21. 89,778,262 97,501,871
Assetspledgedascollateral 22. 4,646,152 7,808,015
Otherassets 23. 1,091,075 850,692
Investmentsinassociates 24. 564,864 497,762
Property,plantandequipment 25. 2,606,933 2,618,705
Intangibleassets 26. - 7,508
Deferredtaxasset 34. 359,545 -
Total assets 340,321,432 323,586,324
LIABILITIES
Depositsfrombanks 27. 1,263,243 10,440,127
Depositsfromcustomers 28. 276,901,195 250,158,010
Derivativefinancialinstruments 20. 12,393 93,550
Retirementbenefitobligation 29. 8,063 13,054
Currentincometaxliabilities 30. 3,740,849 3,551,266
Otherborrowedfunds 31. 700,000 2,285,714
Otherliabilities 32. 7,376,514 6,930,799
Provisions 33. 58,488 58,488
Deferredtaxliability 34. - 782,924
Total liabilities 290,060,745 274,313,932
EQUITY
Sharecapital 35. 2,793,777 2,793,777
Sharepremium 35. 11,643,995 11,643,995
Treasurysharereserve 35. (60,417) (60,417)
Statutoryreserves 35. 19,943,575 17,871,399
Fairvaluereserve 35. (1,108,780) 749,278
Retainedearnings 17,048,537 16,274,360
Total equity 50,260,687 49,272,392
Total equity and liabilities 340,321,432 323,586,324
4746
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Attributable to equity holders of the parent N’000
Share Share Treasury Retained Statutory Fair value Regulatory
capital premium shares earnings reserve reserve risk reserve Total
reserve
Balanceat
1January2013 2,793,777 11,643,995 (60,417) 16,274,360 17,871,399 749,278 - 49,272,392
Profit - - - 13,643,130 - - - 13,643,130
Changeinfairvalue
ofavailable-for-sale
securities,netoftax - - - - - (1,858,058) - (1,858,058)
Total comprehensive
income - - - 13,643,130 - (1,858,058) - 11,785,072
Dividendpaid - - - (10,796,777) - - - (10,796,777)
TransfertoStatutory
reserve - - - (2,072,176) 2,072,176 - - -
At
31December2013 2,793,777 11,643,995 (60,417) 17,048,537 19,943,575 (1,108,780) - 50,260,687
FOR THE YEAR ENDED Note 31 December 2013 31 December 2012
N’000 N’000
Cash flows from operating activities
Profit before tax 16,910,222 16,899,258
Adjustments for non-cash items:
Impairmentofloansandadvances 13. 436,536 241,971
Additional/(release)ofimpairmentofequityinvestment 9. - 11,720
(Gain)/lossondisposalofequityinvestment (5,317) (28,321)
Depreciationofproperty,plantandequipment 26. 345,628 676,708
Amortisationofintangibleassets 25. 7,507 8,189
(Gain)/lossondisposalofproperty,plantandequipment 10. (16,225) (2,264)
AssociatesShareofProfitsfromequitymethodinvestments 24. (78,197) (56,652)
Dividendincome 9. (33,939) (16,037)
Dividendpaidontreasuryshares 11. 238,646 178,229
17,804,861 17,912,801
Changes in operating assets and liabilities
(Increase)/decreaseincashreservebalance (3,232,108) (6,418,981)
(Increase)/decreaseinloansandadvancestobanks (7,085,926) (696,943)
(Increase)/decreaseinloansandadvancescustomer (20,776,973) (5,580,835)
(Increase)/decreaseintradingassets (3,284,334) (2,671,398)
(Increase)/decreaseinpledgedassets 3,161,863 (1,576,734)
(Increase)/decreaseinderivativefinancialinstruments 152,870 216,280
(Increase)/decreaseinotherassets (240,383) (507,872)
Increase/(decrease)indepositsfrombanks (9,176,884) 10,192,119
Increase/(decrease)inotherborrowedfunds (1,585,714) (200,286)
Increase/(decrease)indepositsfromcustomers 23,784,140 (63,040,143)
Increase/(decrease)inderivativefinancialinstruments (81,157) (155,376)
Increase/(decrease)inretirementbenefitobligation (4,991) 2,160
Increase/(decrease)inotherliabilities 445,715 330,779
(119,018) (52,194,429)
Incometaxespaid 30. (3,423,668) (2,586,750)
Net cashflows from/(used in) operating activities (3,542,686) (54,781,179)
Cash flows from investing activities
Purchaseofproperty,plantandequipment 25. (382,679) (627,616)
Proceedfromsaleofproperty,plantandequipment 65,048 56,300
Proceedfromsaleofequityinvestment 26,917 62,538
Dividendsreceived 9. 45,034 24,913
Purchaseofdebtinvestmentsecurities 21. (53,516,111) (45,828,781)
Disposalofdebtinvestmentsecurities 21. 58,567,539 19,110,307
Net cash used in investing activities (4,805,748) (27,202,340)
Cash flows from financing activities
Dividendpaid 39. (11,035,420) (8,241,643)
Net cash used in financing activities (11,035,420) (8,241,643)
Cashandcashequivalentsatstartofyear 125,353,142 218,113,721
Increase/(decrease)incashandcashequivalents (9,772,359) (90,225,163)
Effectsofexchange-ratechangesoncashandcashequivalents 2,959,045 (2,535,415)
Cash and cash equivalents at end of year 40. 118,539,828 125,353,142
CONSOLIDATED STATEMENT OF CASHFLOWS
Attributable to equity holders of the parent N’000
Share Share Treasury Retained Statutory Fair value Regulatory
capital premium shares earnings reserve reserve risk reserve Total
reserve
Balanceat
1January2012 2,793,777 11,643,995 (60,417) 13,338,502 15,846,278 (4,039,297) - 39,522,838
Profit - - - 13,024,392 - - - 13,024,392
Changeinfairvalue
ofavailable-for-sale
securities,netoftax - - - - - 4,788,575 - 4,788,575
Total comprehensive
income - - - 13,024,392 - 4,788,575 - 17,812,967
Dividendpaid - - - (8,063,413) - - - (8,063,413)
Transferfromretained
earnings - - - (2,025,121) 2,025,121 - - -
At
31December2012 2,793,777 11,643,995 (60,417) 16,274,360 17,871,399 749,278 - 49,272,392
4948
FOR THE YEAR ENDED 31 DECEMBER Note 2013 2012
N’000 N’000
Interestincome 5. 20,328,700 21,594,061
Interestexpense 6. (4,808,296) (6,187,529)
Net interest income 15,520,404 15,406,532
Feeandcommissionincome 7. 4,205,137 4,184,170
Feeandcommissionexpense 7. (34,160) (20,435)
Netgains/(losses)fromfinancialinstrumentsheldfortrading 8. 5,074,127 6,253,435
Netinvestmentincome 9. 3,634,095 2,166,160
Otheroperatingincome 10. 184,946 176,326
Net operating income 28,584,549 28,166,188
Personnelexpenses 11. (5,096,218) (4,978,037)
Otheroperatingexpenses 12. (5,617,142) (5,231,807)
Amortisationofintangibleassets 26. (7,507) (8,189)
Depreciationofproperty,plantandequipment 25. (345,628) (676,708)
Netcreditlosses 13. (436,536) (241,971)
Profit before tax 17,081,517 17,029,476
Incometaxexpense 14. (3,267,012) (3,874,791)
Profit for the year 13,814,505 13,154,684
Earnings per share for profit attributable to the equity holders of the
parent entity during the year
Basic 15. 4.94 4.71
Diluted 15. 4.94 4.71
BANK STATEMENT OF PROFIT OR LOSS
FOR THE YEAR ENDED 31 DECEMBER Note 2013 2012
N’000 N’000
Profit for the year 13,814,505 13,154,685
Other comprehensive income:
Itemsthatmaybesubsequentlyreclassifiedtoprofitorloss
Fairvaluereserve(available-for-salesecurities):
Netchangeinfairvalue 21. (756,683) 6,886,739
Netamounttransferredtoprofitorloss 21. (1,897,686) (45,917)
Nettaxonitemstakenthroughothercomprehensiveincome 14. 796,311 (2,052,247)
Other comprehensive income for the year, net of tax (1,858,058) 4,788,575
Total comprehensive income for the year 11,956,447 17,943,260
BANK STATEMENT OF COMPREHENSIVE INCOME
5150
BANK STATEMENT OF FINANCIAL POSITION
Thefinancialstatementswerecertifiedby:
ManagingDirector:Mr.OmarHafeez ChiefFinanceOfficer:HildaMucuha
FRC/2013/CIBN/00000002202 FRC/2013/ICAN/00000001241
Thenotes1to43areanintegralpartoftheseconsolidatedfinancialstatements.Thefinancialstatementsonpages44to112
wereapprovedandauthorisedforissuebytheBoardofDirectorsonMarch62014andweresignedonitsbehalfby:
Chairman:Mr.OlayemiCardoso ManagingDirector:Mr.OmarHafeez
FRC/2013/CISN/00000002200 FRC/2013/CIBN/00000002202
AS AT: Note 31 December 2013 31 December 2012
N’000 N’000
ASSETS
CashandbalanceswithCentralBankofNigeria 16. 22,996,953 20,762,072
Loansandadvancestobanks 17. 122,258,126 121,241,497
Loansandadvancestocustomers 18. 81,538,729 61,168,214
Tradingsecurities 19. 14,466,556 10,962,881
Derivativefinancialinstruments 20. 14,237 167,107
Investmentsecurities 21. 89,778,262 97,501,871
Assetspledgedascollateral 22. 4,646,152 7,808,015
Otherassets 23. 1,091,075 850,692
Investmentsinassociates 24. 398,020 398,020
Investmentinsubsidiary 41. 1,000 1,000
Property,plantandequipment 25. 2,606,933 2,618,705
Intangibleassets 26. - 7,508
Deferredtaxasset 34. 359,545 -
Total assets 340,155,588 323,487,582
LIABILITIES
Depositsfrombanks 27. 1,263,243 10,440,127
Depositsfromcustomers 28. 276,902,420 250,159,008
Derivativefinancialinstruments 20. 12,393 93,550
Retirementbenefitobligation 29. 8,063 13,054
Currentincometaxliabilities 30. 3,740,717 3,551,190
Otherborrowedfunds 31. 700,000 2,285,714
Otherliabilities 32. 7,376,770 6,931,057
Provisions 33. 58,488 58,488
Deferredtaxliability 34. - 782,924
Total liabilities 290,062,094 274,315,112
EQUITY
Sharecapital 35. 2,793,777 2,793,777
Sharepremium 35. 11,643,995 11,643,995
Statutoryreserves 35. 19,943,575 17,871,399
Fairvaluereserve 35. (1,108,780) 749,278
Retainedearnings 16,820,927 16,114,021
Total equity 50,093,494 49,172,470
Total equity and liabilities 340,155,588 323,487,582
BANK STATEMENT OF CHANGES IN EQUITY
Attributable to equity holders of the bank N’000
Share Share Retained Statutory Fair value Regulatory
capital premium earnings reserve reserve risk reserve Total
Balanceat
1January2013 2,793,777 11,643,995 16,114,021 17,871,399 749,278 - 49,172,470
Profit - - 13,814,505 - - - 13,814,505
Changeinfairvalue
ofavailable-for-sale
securities,netoftax - - - - (1,858,058) - (1,858,058)
Total comprehensive
income - - 13,814,505 - (1,858,058) - 11,956,447
Dividendpaid - - (11,035,422) - - - (11,035,422
TransfertoStatutory
reserve - - (2,072,176) 2,072,176 - - -
Transfertoregulatory
creditreserve - - - - - - -
At31December2013
2,793,777 11,643,995 16,820,928 19,943,575 (1,108,780) - 50,093,494
Attributable to equity holders of the bank N’000
Share Share Retained Statutory Fair value Regulatory
capital premium earnings reserve reserve risk reserve Total
Balanceat
1January2012 2,793,777 11,643,995 13,226,099 15,846,278 (4,039,297) - 39,470,852
Profit - - 13,154,685 - - - 13,154,685
Changeinfairvalue
ofavailable-for-sale
securities,netoftax - - - - 4,788,575 - 4,788,575
Total comprehensive
income - - 13,154,685 - 4,788,575 - 17,943,260
Dividendpaid - - (8,241,642) - - - (8,241,642)
Transferfromretained
earnings - - (2,025,121) 2,025,121 - - -
At31December2012
2,793,777 11,643,995 16,114,021 17,871,399 749,278 - 49,172,470
5352
FOR THE YEAR ENDED Note 31 December 31 December
2013 2012
N’000 N’000
Cash flows from operating activities
Profit before tax 17,081,517 17,029,477
Adjustments for non-cash items:
Impairmentofloansandadvances 13. 436,536 241,971
Additional/(release)ofimpairmentofequityinvestment 9. - 11,720
(Gain)/lossondisposalofequityinvestment (5,317) (28,321)
Depreciationofproperty,plantandequipment 25. 345,628 676,708
Amortisationofintangibleassets 26. 7,507 8,189
(Gain)/lossondisposalofproperty,plantandequipment 10. (16,225) (2,264)
Dividendincome 9. (45,034) (24,913)
17,804,612 17,912,566
Changes in operating assets and liabilities
(Increase)/decreaseincashreservebalance (3,232,108) (6,418,981)
(Increase)/decreaseinloansandadvancestobanks (7,085,926) (696,943)
(Increase)/decreaseinloansandadvancescustomer (20,776,973) (5,580,835)
(Increase)/decreaseintradingassets (3,284,334) (2,671,398)
(Increase)/decreaseinpledgedassets 3,161,863 (1,576,734)
(Increase)/decreaseinderivativefinancialinstruments 152,870 216,280
(Increase)/decreaseinotherassets (240,383) (507,872)
Increase/(decrease)indepositsfrombanks (9,176,884) 10,192,119
Increase/(decrease)inotherborrowedfunds (1,585,714) (200,286)
Increase/(decrease)indepositsfromcustomers 23,784,367 (63,040,326)
Increase/(decrease)inderivativefinancialinstruments (81,157) (155,376)
Increase/(decrease)inretirementbenefitobligation (4,991) 2,160
Increase/(decrease)inprovision - -
Increase/(decrease)inotherliabilities 445,713 331,196
(119,045) (52,194,429)
Incometaxespaid 30. (3,423,644) (2,586,750)
Netcashflowsfrom/(usedin)operatingactivities (3,542,689) (54,781,180)
Cash flows from investing activities
Purchaseofproperty,plantandequipment 25. (382,679) (627,616)
Proceedfromsaleofproperty,plantandequipment 65,048 56,300
Proceedfromsaleofequityinvestment 26,917 62,538
Dividendsreceived 45,034 24,913
Purchaseofdebtinvestmentsecurities 21. (53,516,111) (45,828,781)
Maturity/Salesofdebtinvestmentsecurities 21. 58,567,539 19,110,306
Net cash used in investing activities 4,805,748 (27,202,340)
Cash flows from financing activities
Dividendpaid 39. (11,035,420) (8,241,643)
Netcashusedinfinancingactivities (11,035,420) (8,241,643)
Cashandcashequivalentsatstartofyear 125,353,142 218,113,721
Increaseincashandcashequivalents (9,772,359) (90,225,164)
Effectsofexchange-ratechangesoncashandcashequivalents 2,959,045 (2,535,415)
Cash and cash equivalents at end of year 40. 118,539,828 125,353,142
BANK STATEMENT OF CASHFLOWS NOTES TO THE ANNUAL FINANCIAL STATEMENTS
1. GENERAL INFORMATION
Citibank Nigeria Limited (“the Bank”) is a company domiciled in Nigeria. The address of the Bank’s registered office is 27
KofoAbayomiStreet,Victoria Island,Lagos.Theseconsolidatedfinancialstatements for theyearended31December2013
arepreparedfortheBankanditssubsidiaries(together,“theGroup”).TheGroupisprimarilyinvolvedincommercialbanking
thatincludestransactionalservices,corporatefinance,provisionoffinance,custodialbusinessandmoneymarketandtrading
activities
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
2.1 Introduction to the summary of significant accounting policies
Theprincipalaccountingpoliciesadoptedinthepreparationoftheseconsolidatedfinancialstatementsaresetoutbelow.
Thesepolicieshavebeenconsistentlyappliedtoalltheyearspresented,unlessotherwisestated.
2.2 Basis of preparation
The consolidated financial statements for the year 2013 have been prepared in accordance with International Financial
Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). Additional information
requiredbynationalregulationsisincludedwhereappropriate.
2.2.1 Basis of measurement
The financial statements are prepared under the historical cost convention, modified to include the fair value of certain
financialinstrumentstotheextentrequiredorpermittedundertheaccountingstandardsassetoutintherelevantaccounting
policies.
TheyhavealsobeenpreparedinthemannerrequiredbytheCompaniesandAlliedMattersActofNigeria,BanksandOther
FinancialInstitutionsActofNigeriaandrelevantCentralBankofNigeriacirculars.
2.2.2 Use of estimates and judgements
Thepreparationoffinancialstatements inconformitywith IFRSrequiresmanagementtomake judgments,estimatesand
assumptionsthataffecttheapplicationofpoliciesandreportedamountsofassetsandliabilitiesanddisclosuresofcontingent
assetsandliabilitiesatthedateofthefinancialstatementsandthereportedamountsofrevenuesandexpensesduringthe
reportedperiod.Theestimatesandassumptionsarebasedonmanagement’sbestknowledgeofcurrentevents,actions,
historicalexperienceandvariousotherfactorsthatarebelievedtobereasonableunderthecircumstances,theresultsof
whichformthebasisofmakingthejudgmentsaboutthecarryingvaluesofassetsandliabilitiesthatarenotreadilyapparent
fromothersources.Actualresultsmaydifferfromtheseestimates.
Theestimatesandunderlyingassumptionsarereviewedonanongoingbasis.Revisionstoaccountingestimatesarerecognised
intheperiodinwhichtheestimateisrevisediftherevisionaffectsonlythatperiodorintheperiodoftherevisionandfuture
periodsiftherevisionaffectsbothcurrentandfutureperiods.
2.2.3 Changes in accounting policy and disclosures
i) New and amended standards adopted by the group
The following standards havebeenadopted by the group for the first time for the financial yearbeginningonorafter 1
January2013andhaveamaterialimpactonthegroup:
• Amendment to IAS 1, ‘Financial statementpresentation’ regardingothercomprehensive income.Themainchange
resulting from these amendments is a requirement for entities to group items presented in ‘other comprehensive
income’(OCI)onthebasisofwhethertheyarepotentiallyreclassifiabletoprofitorlosssubsequently(reclassification
adjustments).
5554
• AmendmenttoIFRS7,‘Financialinstruments:Disclosures’,onassetandliabilityoffseting.Thisamendmentincludes
newdisclosurestofacilitatecomparisonbetweenthoseentitiesthatprepareIFRSfinancialstatementstothosethat
preparefinancialstatementsinaccordancewithUSGAAP.
• IFRS10,‘Consolidatedfinancialstatements’buildsonexistingprinciplesbyidentifyingtheconceptofcontrolasthe
determiningfactorinwhetheranentityshouldbeincludedwithintheconsolidatedfinancialstatementsoftheparent
company.Thestandardprovidesadditionalguidancetoassistinthedeterminationofcontrolwherethisisdifficultto
assess.Seenote41fortheimpactonthefinancialstatements.
• IFRS12,‘Disclosuresofinterestsinotherentities’includesthedisclosurerequirementsforallformsofinterestsin
otherentities,includingjointarrangements,associates,structuredentitiesandotheroffbalancesheetvehicles.See
note41fordisclosureofinterestinotherentities
• IFRIC21,‘Levies’ThisisaninterpretationofIAS37,‘Provisions,contingentliabilitiesandcontingentassets’.IAS37
setsoutcriteria fortherecognitionofa liability,oneofwhich is therequirementfortheentitytohaveapresent
obligationasaresultofapastevent(knownasanobligatingevent).Theinterpretationclarifiesthattheobligating
eventthatgivesrisetoaliabilitytopayalevyistheactivitydescribedintherelevantlegislationthattriggersthe
paymentofthelevy.
• IFRS13,‘Fairvaluemeasurement’,aimstoimproveconsistencyandreducecomplexitybyprovidingaprecisedefinition
offairvalueandasinglesourceoffairvaluemeasurementanddisclosurerequirementsforuseacrossIFRSs.The
requirements,whicharelargelyalignedbetweenIFRSsandUSGAAP,donotextendtheuseoffairvalueaccounting
butprovideguidanceonhowitshouldbeappliedwhereitsuseisalreadyrequiredorpermittedbyotherstandards
withinIFRSs
• IAS27(revised)isrenamed‘Separatefinancialstatements’andnowdealsonlywithseparatefinancialstatements.
Theexistingguidanceforseparatefinancialstatementsisunchanged.
• IAS28(revised)‘Investmentsinassociates’coversequityaccountingforjointventuresaswellasassociates.
ii) New standards and interpretations not yet adopted
ThereareanumberofaccountingstandardsandinterpretationsthathavebeenissuedbytheIASB,butwhicharenotyet
effectivefor31December,2013reporting,theseinclude:
• AmendmentstoIFRS9–FinancialInstruments(2011)-effective1January2015.TheIASBhaspublishedanamendment
to IFRS9, ‘Financial instruments’, thatdelaystheeffectivedatetoannualperiodsbeginningonorafter 1January
2015.Theoriginaleffectivedatewasforannualperiodsbeginningonorafterfrom1January2013.Thisamendment
isaresultoftheboardextending itstimelineforcompletingtheremainingphasesof itsprojecttoreplaceIAS39
(forexample,impairmentandhedgeaccounting)beyondJune2011,aswellasthedelayintheinsuranceproject.The
amendmentconfirmstheimportanceofallowingentitiestoapplytherequirementsofallthephasesoftheprojectto
replaceIAS39atthesametime.Therequirementtorestatecomparativesandthedisclosuresrequiredontransition
havealsobeenmodified.
• Amendments to IAS 32 – Financial Instruments: Presentation - effective 1 January 2014. The IASB has issued
amendments to the application guidance in IAS 32, ‘Financial instruments: Presentation’, that clarify some of the
requirementsforoffsettingfinancialassetsandfinancialliabilitiesonthestatementoffinancialposition.However,the
clarifiedoffsettingrequirementsforamountspresentedinthestatementoffinancialpositioncontinuetobedifferent
fromUSGAAP
TheGroupiscurrentlyintheprocessofevaluatingthepotentialeffectofthesestandards.
2.3 CONSOLIDATION
Thefinancialstatementsofthesubsidiariesusedtopreparetheconsolidatedfinancialstatementswerepreparedasofthe
parentcompany’sreportingdate.
Subsidiaries
TheconsolidatedfinancialstatementsoftheGroupcomprisethefinancialsstatementsoftheparententityandsubsidiaryas
at31December2013.Subsidiariesareallentities(includingstructuredentities)overwhichthegrouphascontrol.Thegroup
controlsanentitywhenthegroupisexposedto,orhasrightsto,variablereturnsfromitsinvolvementwiththeentityandhas
theabilitytoaffectthosereturnsthroughitspowerovertheentity.
ThegroupfinancialstatementsconsolidatethefinancialstatementsoftheBankanditswhollyownedsubsidiarycompany,
NIBNomineesLimited.SubsidiaryundertakingsofthosecompaniesinwhichtheGroup,directlyorindirectly,haspowerto
exercisecontrolovertheiroperations,areconsolidated.
Structuredentitiesareconsolidatedwherethegrouphascontrol.Theactivitiesofthestaffparticipationschemehavebeen
consolidatedintothefinancialstatementsoftheGroupresultingintheassetsofthestaffparticipationscheme,whicharethe
sharesofthebank,beingrecognisedinshareholdersequityasTreasuryshares(Note2.14).
Inter-company transactions, balances and unrealised gains on transactions between companies within the Group are
eliminatedonconsolidation.Unrealisedlossesarealsoeliminatedinthesamemannerasunrealisedgains,butonlytothe
extentthatthereisnoevidenceofimpairment.
ThesubsidiarieswerefullyconsolidatedfromthedatecontrolwastransferredtotheGroup.Theintegrationofthesubsidiaries
intotheconsolidatedfinancialstatementsisbasedonconsistentaccountingandvaluationmethodsforsimilartransactions
andotheroccurrencesundersimilarcircumstances.Intheseperatefinancialstatementsforthebank,theinvestmentinthe
subsidiaryiscarriedatcost.
Associates
Associates are those entities over which the Group has significant influence but not control, generally accompanying a
shareholdingbetween20%and50%ofthevotingrights.Inaddition,itincludesentitieswheretheshareholdingislessthan
20%butsuchsignificantinfluencecanbedemonstratedwiththeexistenceofrepresentationontheboardofdirectorsor
equivalentgoverningbodyoftheinvestee.Investmentinassociatesisaccountedforbytheequitymethodofaccounting.
Undertheequitymethod,theinvestmentisinitiallyrecognisedatcost,andthecarryingamountisincreasedordecreasedto
recognisetheinvestor’sshareofprofitorlossoftheinvesteeaftertheacquisitiondate.
TheGroup’sshareofpost-acquistionprofitor loss is recognised in thestatementofprofitor loss,and itsshareofpost-
acquistionmovementsinothercomprehensiveincomeisrecognisedinothercomprehensiveincomewiththecorresponding
adjustmenttothecarryingamountoftheinvestment.WhentheGroup’sshareoflossesinanassociateequalsorexceedsits
interestintheassociate,includinganyotherunsecuredreceivables,theGroupdoesnotrecognisefurtherlosses,unlessithas
incurredlegalorconstructiveobligationsormadepaymentsonbehalfoftheassociate.
TheGroupdeterminesateachreportingdatewhetherthereisanyobjectiveevidencethattheinvestmentintheassociateis
impaired.Ifthisisthecase,thegroupcalculatestheamountofimpairmentasthedifferencebetweentherecoverableamount
oftheassociateanditscarryingvalueandrecognisestheamountadjacentto“shareofprofit/(loss)ofanassociate”inthe
statementofprofitorloss.
Intheseperatefinancialstatementsforthebank,theinvestmentintheassociateiscarriedatcost.
2.4 Segment Reporting
TheGroupisaprivatecompanythathasnodebtorequitytradedinapublicmarketthereforethereisnodisclosurerequired
forsegmentreporting.
5756
2.5 Foreign currency translation
(a) Functional and presentation currency
ItemsincludedinthefinancialstatementsofeachoftheGroup’sentitiesaremeasuredusingthecurrencyoftheprimary
economic environment in which the entity operates (‘the functional currency’).The consolidated financial statements are
presentedinNaira,whichistheGroup’spresentationcurrency.Thefiguresshownintheconsolidatedfinancialstatements
arestatedinNairathousands.
(b) Transactions and balances
TransactionsinforeigncurrenciesaretranslatedintoNairaattheratesofexchangerulingatthedateofeachtransaction
(or where appropriate the rate of the related forward contracts). Monetary assets and liabilities denominated in foreign
currenciesarereportedattheratesofexchangeprevailingatthestatementoffinancialpositiondate.Anygainorlossarising
fromachangeinexchangeratessubsequenttothedateofthetransactionisincludedinthestatementofprofitorloss.
Changesinfairvalueofmonetarysecuritiesdenominatedinforeigncurrencyclassifiedasavailableforsaleareanalysed
betweentranslationdifferencesresultingfromchangesinamortisedcostofthesecurityandotherchangesinthecarrying
amountofthesecurity.Translationdifferencesrelatedtochangesinamortisedcostarerecognisedinthestatementofprofit
orloss,andotherchangesincarryingamountarerecognisedinothercomprehensiveincome.
2.6 FINANCIAL ASSETS AND LIABILITIES
InaccordancewithIAS39allfinancialassetsandliabilitieshavetoberecognisedintheconsolidatedstatementoffinancial
positionandmeasuredinaccordancewiththeirassignedcategory
2.6.1 Recognition
TheGroupinitiallyrecognisesloans,receivablesanddepositsonthedatethattheyareoriginated.Otherfinancialassetsand
liabilitiesthatincludedebtsecuritiesandassetsandliabilitiesdesignatedatfairvaluethroughprofitorlossarerecognised
onthebasisofsettlementdateaccounting.
Allfinancialinstrumentsaremeasuredinitiallyattheirfairvalueplustransactioncosts,exceptinthecaseoffinancialassets
andfinancialliabilitiesrecordedatfairvaluethroughprofitorloss.Subsequentrecognitionoffinancialassetsandliabilities
isatamortisedcostorfairvalue.
2.6.2 Classification
The classification of financial instruments depends on the purpose and management’s intention for which the financial
instrumentswereacquiredandtheircharacteristics.Seeaccountingpolicies2.6.10to2.6.16.
2.6.3 Derecognition
TheGroupderecognisesafinancialassetwhenthecontractualrightstothecashflowsfromtheassetexpire,orittransfers
therightstoreceivethecontractualcashflowsonthefinancialassetinatransactioninwhichsubstantiallyalltherisksand
rewardsofownershipofthefinancialassetaretransferred.Any interest intransferredfinancialassetsthat iscreatedor
retainedbytheGroupisrecognisedasaseparateassetorliability.
TheGroupderecognisesafinancialliabilitywhenitscontractualobligationsaredischargedorcancelledorexpire.
TheGroupentersintotransactionswherebyittransfersassetsrecognisedonitsstatementoffinancialposition,butretains
eitherallrisksandrewardsofthetransferredassetsoraportionofthem. Ifallorsubstantiallyallrisksandrewardsare
retained,thenthetransferredassetsarenotderecognisedfromthestatementoffinancialposition.Transfersofassetswith
retentionofallorsubstantiallyallrisksandrewardsinclude,forexample,securedborrowingandrepurchasetransactions.
SuchassetsarereportedasAssetspledgedascollateralinthestatementoffinancialposition.
2.6.4 Offsetting of financial assets and liabilities
Financialassetsandliabilitiesareoffsetandthenetamountreportedonthestatementoffinancialpositionwhenthereisa
legallyenforceablerighttoset-offtherecognisedamountandthereisanintentiontosettleonanetbasis,ortorealisethe
assetandsettletheliabilitysimultaneously.
2.6.5 Sale and repurchase agreements
Securitiessoldsubjecttorepurchaseagreements(‘repos’)arereclassifiedinthefinancialstatementsasassetspledgedas
collateralwhenthetransfereehastherightbycontractorcustomtosellorrepledgethecollateral;thecounterpartyliability
isincludedindepositsfrombanksordepositsfromcustomers,asappropriate.Securitiespurchasedunderagreementsto
resell (‘reverse repos’) are recorded as loans and advances to other banks or customers, as appropriate. The difference
betweensaleandrepurchaseprice is treatedas interestandaccruedover the lifeof theagreementsusingtheeffective
interestmethod.Securitieslenttocounterpartiesarealsoretainedinthefinancialstatements.
2.6.6 Amortised cost measurement
Theamortisedcostofafinancialassetorliabilityistheamountatwhichthefinancialassetorliabilityismeasuredatinitial
recognition,minusprincipalrepayments,plusorminusthecumulativeamortisationusingtheeffectiveinterestmethodof
anydifferencebetweentheinitialamountrecognisedandthematurityamount,minusanyreductionforimpairment.
2.6.7 Fair value measurement
Fairvalueisthepricethatwouldbereceivedtosellanassetorpaidtotransferaliabilityinanorderlytransactionbetween
marketparticipantsatthemeasurementdate.
Thefairvalueoftradingassets,financialassetsheldatfairvalueandavailable-for-saleassetsarebasedonquotedmarket
prices,excludingtransactioncosts.Ifaquotedmarketpriceisnotavailableforthefinancialassets,thefairvalueisestimated
usingpricingmodelsordiscountedcashflowtechniques.
Wherediscountedcashflowtechniquesareused,estimatedfuturecashflowsarebasedonmanagement’sbestestimatesand
thediscountrateisamarket-relatedrateatthereportingdateforafinancialassetwithsimilartermsandconditions.Where
pricingmodelsareused,inputsarebasedonmarketrelatedmeasuresatthereportingdate.
2.6.8 Identification and measurement of impairment of financial assets
i) Assets carried at amortised cost
AteachreportingdatetheGroupassesseswhetherthereisobjectiveevidencethatfinancialassetsareimpaired.Financial
assetsareimpairedwhenobjectiveevidencedemonstratesthatalosseventhasoccurredaftertheinitialrecognitionofthe
asset,andthatthelosseventhasanimpactonthefuturecashflowsoftheassetthatcanbeestimatedreliably.
TheGroupconsidersevidenceof impairmentatbothaspecificassetandcollectiveasset level.All individuallysignificant
financialassetsareassessedforspecific impairment.Allsignificantassets foundnottobespecifically impairedarethen
collectively assessed for any impairment that could be incurred but not yet identified. Assets that are not individually
significantarethencollectivelyassessedforimpairmentbygroupingtogetherfinancialassets(carriedatamortisedcost)
withsimilarriskcharacteristics.
Objectiveevidencethatfinancialassets(includingequitysecurities)areimpairedcanincludesignificantfinancialdifficulty,
default on the facility or probability that the obligor will enter bankruptcy, the disappearance of an active market for a
security,orotherobservabledatarelatingtoagroupofassetssuchasadversechangesinthepaymentstatusofborrowers
orissuersinthegroup,oreconomicconditionsthatcorrelatewithdefaultsinthegroup.
InassessingcollectiveimpairmenttheGroupusesstatisticalmodellingofhistoricaltrendsoftheprobabilityofdefault,timing
ofrecoveriesandtheamountoflossincurred,adjustedformanagement’sjudgementastowhethercurrenteconomicand
creditconditionsaresuchthattheactuallossesarelikelytobegreaterorlessthansuggestedbyhistoricalmodelling.The
collectiveimpairmentisdeterminedonaportfoliobasisbasedonthehistorical lossexperienceforassetswithcreditrisk
characteristicssimilartothoseintheGroup.Theloanimpairmentprovisionwouldbebasedonrisk-ratingofobligorandloss
normsattachedtoeachrisk-rating.Thelossnormwouldhavebeenstatisticallyderivedfromhistoricaldata.
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Impairmentlossesonassetscarriedatamortisedcostaremeasuredasthedifferencebetweenthecarryingamountofthe
financialassetsandthepresentvalueofestimatedcashflowsdiscountedattheassets’originaleffectiveinterestrate.Losses
arerecognisedinstatementofprofitorlossandreflectedinanallowanceaccountagainstloansandadvances.Intereston
theimpairedassetcontinuestoberecognisedthroughtheunwindingofthediscount.
If,inasubsequentperiod,theamountoftheimpairmentlossdecreasesandthedecreasecanberelatedobjectivelytoan
eventoccurringaftertheimpairmentwasrecognised(suchasanimprovementintheobligor’screditrating),thepreviously
recognisedimpairmentlossisreversedbyadjustingtheallowanceaccount.Theamountofthereversalisrecognisedinthe
statementofprofitorloss.
ii) Assets classified as available-for-sale
Impairment losses on available-for-sale investment securities are recognised by transferring the difference between the
amortisedacquisitioncostandcurrentfairvalueoutofequitytothestatementofprofitorloss.
Inthecaseofequityinvestmentsclassifiedasavailable-for-sale,asignificantorprolongeddeclineinthefairvalueofthe
securitybelowitscost isobjectiveevidenceof impairmentresulting intherecognitionofan impairment loss. Ifanysuch
evidenceexistsforavailable-forsalefinancialassets,thecumulativeloss–measuredasthedifferencebetweentheacquisition
cost and the current fair value, less any impairment loss on that financial asset previously recognised in the statement
ofprofitor loss – is removed fromequityandrecognised instatementofprofitor loss. Impairment losses recognised in
statementofprofitorlossonequityinstrumentsarenotreversed.
If,inasubsequentperiod,thefairvalueofainvestmentsecuritiesclassifiedasavailable-for-saleincreasesandtheincrease
canbeobjectivelyrelatedtoaneventoccurringaftertheimpairmentlosswasrecognisedinstatementofprofitorloss,the
impairmentlossshallbereversed,withtheamountofthereversalrecognisedinthestatementofprofitorloss.
However, any subsequent recovery in the fair value of an impaired available-for-sale investment security is recognised
directlyinequity.
2.6.9 Regulatory risk reserve
IncompliancewiththePrudentialGuidelinesforLicensedBanks,theGroupassessesqualifyingfinancialassetsusingthe
guidanceunderthePrudentialGuidelines.Theseapplyobjectiveandsubjectivecriteriatowardsprovidingforlossesinrisk
assets.Assetsareclassedasperformingornon-performing.Non-performingassetsare furtherclassedasSubstandard,
DoubtfulorLostwithattendantprovisionasperthetablebelowbasedonobjectivecriteria.
Classification % Provided Basis
Substandard 10% Interestand/orprincipaloverdueby90daysbutlessthan180days.
Doubtful 50% Interestand/orprincipaloverduebymorethan180daysbutlessthan365days.
Lost 100% Interestand/orprincipaloverduebymorethan365days.
Amoreacceleratedprovisionmaybedoneusingthesubjectivecriteria.A1%provisionistakenonallriskassetsnotspecifically
provisioned.
TheresultsoftheapplicationofPrudentialGuidelinesandthe impairmentdeterminedfortheseassetsunder IAS39are
compared.TheIAS39determinedimpairmentchargeisalwaysincludedinthestatementofprofitorloss(Note18.3).Where
thePrudentialGuidelinesprovisionisgreater,thedifferenceisappropriatedfromRetainedEarningsandincludedinanon-
distributablereservecalledStatutoryCreditReserve.WheretheIAS39impairmentisgreater,noappropriationismadeand
theamountoftheIAS39impairmentisrecognisedinthestatementofprofitorloss.
Insubsequentperiods,reversalsoradditionalappropriationsaremadebetweentheStatutoryCreditReserveandRetained
EarningstomaintaintotalprovisionsatthelevelsexpectedbytheRegulator.
2.6.10 Cash and cash equivalents
Cashandcashequivalentsincludenotesandcoinsonhand,unrestrictedbalancesheldwithcentralbanksandhighlyliquid
financialassetswithoriginalmaturitiesoflessthanthreemonths,whicharesubjecttoinsignificantriskofchangesintheir
fairvalue,andareusedby theGroup in themanagementof itsshort-termcommitments.Cashandcashequivalentsare
carriedatamortisedcostinthestatementoffinancialposition
2.6.11 Financial assets and liabilities classified as held for trading
TradingassetsandliabilitiesarethoseassetsandliabilitiesthattheGroupacquiresorincursprincipallyforthepurposeof
sellingorrepurchasinginthenearterm,orholdsaspartofaportfoliothatismanagedtogetherforshort-termprofit.
Tradingassetsandliabilitiesareinitiallyrecognisedandsubsequentlymeasuredatfairvalueinthestatementoffinancial
positionwithtransactioncostsrecognisedinstatementofprofitorloss.Allchangesinfairvaluearerecognisedaspartofnet
tradingincomeinstatementofprofitorloss.
2.6.12 Loans and receivables
Loansandadvancesarenon-derivativefinancialassetswithfixedordeterminablepaymentsthatarenotquotedinanactive
marketandthattheGroupdoesnotintendtosellimmediatelyorinthenearterm.
When the Group is the lessor in a lease agreement that transfers substantially all of the risks and rewards incidental to
ownership of an asset to the lessee, the arrangement is classified as a finance lease and a receivable equal to the net
investmentintheleaseisrecognisedandpresentedaspartofloansandadvancestocustomers.
Loansandadvancesareinitiallymeasuredatfairvalueplusincrementaldirecttransactioncosts,andsubsequentlymeasured
attheiramortisedcostusingtheeffectiveinterestmethod.
2.6.13 Available-for-sale
Available-for-sale investments are non-derivative investments that are not designated as any other category of financial
assets.Allavailable-for-saleinvestmentsarecarriedatfairvalue.
Interestincomeisrecognisedinstatementofprofitorlossusingtheeffectiveinterestmethod.Dividendincomeisrecognised
instatementofprofitorlosswhentheGroupbecomesentitledtothedividend.Foreignexchangegainsorlossesonavailable-
for-saledebtinvestmentsecuritiesarereclassifiedinstatementofprofitorloss.
Other fairvaluechangesare recogniseddirectly inothercomprehensive incomeuntil the investment is soldor impaired
whereuponthecumulativegainsandlossespreviouslyrecognisedinothercomprehensiveincomearerecognisedtostatement
ofprofitorlossasareclassificationadjustmentfornon-equtysecurities,whiletherewillbenoreclassificationadjustmentto
profitorlossinthecaseofequitysecurities
Anon-derivativefinancialassetmaybereclassifiedfromtheavailable-for-salecategorytotheloansandreceivablecategory
ifitotherwisewouldhavemetthedefinitionofloansandreceivablesandiftheGrouphastheintentionandabilitytoholdthat
financialassetfortheforeseeablefutureoruntilmaturity.
2.6.14 Derivative financial instruments
Derivative financial instruments are recognised initially at fair value on the date which the derivative contract is entered
intoandsubsequentlyre-measuredattheirfairvalue.Fairvaluesareobtainedfromquotedmarketpricesinactivemarkets,
includingrecentmarkettransactionsandvaluationtechniques.Allderivativesarecarriedasassetswhenfairvalueispositive
andasliabilitieswhenfairvalueisnegative.Changesinfairvaluearerecognisedimmediatelyinthestatementofprofitorloss.
2.6.15 Non-derivative Financial liabilities
Financialliabilitiesareinitiallymeasuredatfairvaluenetoftransactioncostsattradedate.Subsequently,theyaremeasured
atamortizedcostusingtheeffectiveinterestratemethod.
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2.6.16 Reconciliation of Financials Statement line items to IAS 39 categories
ThetablebelowshowstheclassificationoftheGroup’sFinancialStatementlineitemstodifferentcategoriesinlinewithIAS
39provisions.
Category (as defined by IAS 39) Classes as determined by the Group
Financialassets
Financialassetsatfairvaluethroughprofitorloss
TradingAssets DebtSecurities
Derivativefinancialinstruments
Loansandreceivables
CashandbalanceswithCentralBankofNigeria
LoansandadvancestoBanks
Loansandadvancestocustomers
OtherAssets
AvailableforsaleInvestmentSecurites
DebtSecurities
ListedEquitysecurities
UnlistedEquitysecurities
Assetspledgedascollateral DebtSecurities
Financialliabilities
Financialliabilitiesatfairvaluethroughprofitandloss
Derivativefinancialinstruments
Financialliabilitiesatamortisedcost
DepositfromBanks
DepositsfromCustomers
Otherborrowedfunds
Otherliabilities
2.7 Revenue recognition
Interest income and expense
using theeffective interestmethod.Theeffective interest rate is the rate thatexactlydiscounts theexpectedestimated
futurecashpaymentsandreceiptsthroughtheexpectedlifeofthefinancialassetorliability.Feesanddirectcostsrelating
toloanorigination,refinancingorrestructuringandtoloancommitmentsaredeferredandamortisedtointerestearnedon
loansandadvancesusingtheeffectiveinterestmethod.
Fees and commission income
Feesandcommissionsaregenerallyrecognisedonanincurredbasiswhentherelatedservicesareprovidedoronexecution
ofasignificantact.Feesandcommissionsarisingfromnegotiatingorparticipatinginthenegotiationofatransactionfroma
thirdpartysuchaslettersofcredit,cashclearingarerecognisedonanaccrualbasisastheserviceisprovided.Portfolioand
othermanagementadvisoryandservicefeesarerecognisedbasedontheapplicableservicecontracts,usuallyonatime-
apportionatebasis.Custodyrelatedfeesarerecognizedovertheperiodinwhichtheserviceisprovided.
Net income from financial instruments held for trading at fair value through profit and loss
Net incomeon itemsat fairvalue throughprofitand losscomprisesofallgains less lossesrelatedto tradingassetsand
liabilities and financial instruments designated at fair value, and include all realized and unrealized fair value changes,
togetherwithrelatedinterestandforeignexchangedifferences.
Dividend income
Dividends are recognised in Net Investment income in the statement of profit or loss when the entity’s right to receive
paymentisestablished.
2.8 Property, plant and equipment
Landandbuildingscomprisemainlyheadofficeandbranchoffices.Allproperty,plantandequipmentusedbytheparentor
itssubsidiaryisstatedathistoricalcostlessdepreciation.Historicalcostincludesexpenditurethatisdirectlyattributableto
theacquisitionoftheitems.Subsequentcostsareincludedintheasset’scarryingamountorarerecognisedasaseparate
asset,asappropriate,onlywhenitisprobablethatfutureeconomicbenefitsassociatedwiththeassetwillflowtotheGroup
andthecostoftheassetcanbemeasuredreliably.Allotherrepairsandmaintenancearechargedtothestatementofprofit
orlossduringthefinancialperiodinwhichtheyareincurred.
Landisnotdepreciated.Depreciationofassetsiscalculatedusingthestraight-linemethodtoallocatethecostofproperty
andequipmenttotheirresidualvaluesovertheirestimatedusefullives,asfollows:
-Leaseholdimprovements: Overtheleaseperiodorusefullifewhicheverisshorter
-Building 50years
-Furnitureandequipment 5years
-Computerequipment 3years
-Motorvehicles 4years
Depreciationbeginswhenanassetisavailableforuseandceasesattheearlierofthedatethattheassetisderecognized
orclassifiedasheldforsaleinaccordancewithIFRS5.Anon-currentassetordisposalgroupisnotdepreciatedwhileitis
classifiedasheldforsale
Capitalwork-in-progressisnotdepreciated.Uponcompletionitistransferredtotherelevantassetcategory.
Theassets’residualvaluesandusefullivesarereviewed,andadjustedifappropriate,attheendofeachreportingperiod.
Assetsarereviewedforimpairmentwhenevereventsorchangesincircumstancesindicatethatthecarryingamountmaynot
berecoverable.
Gainsand lossesondisposalsaredeterminedbycomparingproceedswithcarryingamount.Theseare included in ‘other
operatingincome’inthestatementofprofitorloss.
2.9 Intangible assets
Computer software is treated as an intangible asset when the purchased software is not an integral part of the related
hardware.Costsassociatedwithmaintainingcomputersoftwareprogrammesarerecognisedasanexpenseasincurred.The
costsincurredtoacquireandbringtousespecificcomputersoftwarearecapitalised.Thecostsareamortisedonastraight
linebasisovertheexpectedusefullives,whichdoesnotexceedthreeyears.
Computerdevelopmentcoststhataredirectlyassociatedwiththeproductionofidentifiableanduniquesoftwareproducts
thatwillprobablygenerateeconomicbenefitsinexcessofitscostsarecapitalised.Thecostsareamortisedonastraightline
basisovertheexpectedusefullives,whichdoesnotexceedthreeyears.
Othercostsassociatedwithmaintainingsoftwarearerecognisedasanexpenseasincurredinthestatementofprofitorloss.
2.10 Impairment of non-financial assets
Impairmentlossesarerecognisedinthestatementofprofitorloss.Impairmentlossesrecognisedinrespectofassetsare
allocatedtoreducethecarryingamountoftheassets.
Impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has
decreasedornolongerexists.Animpairmentlossisreversediftherehasbeenachangeintheestimatesusedtodetermine
therecoverableamount.Animpairmentlossisreversedonlytotheextentthattheasset’scarryingamountdoesnotexceed
thecarryingamountthatwouldhavebeendetermined,netofdepreciationoramortisation,ifnoimpairmentlosshadbeen
recognised.
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2.11 Provisions
Aprovisionisrecognisedif,asaresultofapastevent,theGrouphasapresentlegalorconstructiveobligationthatcanbe
estimatedreliablyanditisprobablethatanoutflowofeconomicbenefitswillberequiredtosettletheobligation.Provisions
aredeterminedbythepresentvalueoftheexpendituresexpectedtosettletheobligationusingapre-taxratethatreflects
currentmarketassessmentsofthetimevalueofmoneyand,whereappropriate,therisksspecifictotheliability.
2.12 Income taxation
Current income tax
Thetaxexpensefortheperiodcomprisescurrentanddeferredincometax.Taxisrecognisedinstatementofprofitorloss,
excepttotheextentthatitrelatestoitemsrecognisedinothercomprehensiveincomeordirectlyinequity.Inthiscase,the
taxisalsorecognisedinothercomprehensiveincomeordirectlyinequityrespectively.
Thecurrentincometaxchargeiscalculatedonthebasisoftaxlawsenactedorsubstantivelyenactedatthereportingdate.
Thedirectorsperiodicallyevaluatepositionstakenintaxreturnswithrespecttosituationsinwhichapplicabletaxregulation
issubjecttointerpretation.Theyestablishprovisionswhereappropriate,onthebasisofamountsexpectedtobepaidtothe
taxauthorities.
Deferred income tax
Deferredtaxarisesfromtemporarydifferencesintherecognitionofitemsforaccountingandtaxpurposesandiscalculated
usingtheliabilitymethod.Deferredtaxisprovidedontimingdifferences,whichareexpectedtoreverseintheforeseeable
futureattheratesoftaxlikelytobeinforceatthetimeofreversal.Deferredincometaxisdeterminedusingtaxrates(and
laws) thathavebeenenactedorsubstantiallyenactedby thereportingdateandareexpectedtoapplywhentherelated
deferredincometaxassetisrealisedorthedeferredincometaxliabilityissettled.
Deferredincometaxassetisrecognisedonlytotheextentthatitisprobablethatfuturetaxableprofitwillbeavailableagainst
whichthetemporarydifferencescanbeutilised.
Deferredincometaxassetsandliabilitiesareoffsetwhenthereisalegallyenforceablerighttooffsetcurrentincometax
assetsagainstcurrentincometaxliabiltitesandwhenthedeferredincometaxesassetsandliabilitiesrelatetoincometaxes
leviedbythesametaxationauthorityoneitherthesameentityordifferenttaxableentitieswherethereisanintentionto
settlethebalancesonanetbasis.
Deferredtaxrelatedtofairvaluemeasurement,afterinitialrecognition,ofavailable-for-salesecurities,isrecognisedinother
comprehensiveincome.
2.13 Employee benefits
Defined contribution scheme
TheGroupoperatesadefinedcontributorypensionscheme.TheschemeisfullyfundedandismanagedbylicensedPension
FundAdministrators.MembershipoftheschemeisautomaticforanemployeeuponcommencementofdutiesattheGroup.
TheemployeeandtheGroupcontribute7.5%eachoftheemployee’sannualbasicsalaryaswellashousingandtransport
allowancestothescheme.TheGroup’scontributionstothisschemearechargedtothestatementofprofitor loss inthe
periodtowhichtheyrelate.
2.14 Share Capital
Dividend on ordinary shares
DividendonordinarysharesisappropriatedfromretainedearningsintheyearitisapprovedbytheGroup’sshareholders.
Dividendpershareiscalculatedbasedonthedeclareddividendduringtheyearandthenumberofsharesinissueatthedate
ofthedeclarationandqualifyingfordividend.
DividendforthecurrentyearthatisapprovedbytheDirectorsafterthestatementoffinancialpositiondateisdisclosedin
thesubsequenteventsnotetothefinancialstatements.
DividendproposedbyDirectors’butnotyetapprovedbymembersisdisclosedinthefinancialstatementsinaccordance
withtherequirementsoftheCompaniesandAlliedMattersActofNigeria.
Treasury shares
WheretheBankoranymemberoftheGrouppurchasestheBank’ssharecapital,theconsiderationpaid,ifany,isdeducted
fromtheshareholdersequityastreasurysharesuntiltheyarecancelledordisposed,asdisclosedinnote35.2.Wheresuch
sharesaresubsequentlysoldorreissued,anyconsiderationreceivedisincludedinshareholdersequity
2.15 Contingent assets and liabilities
Contingentassets
Contingentassetisapossibleassetthatarisesfrompasteventsandwhoseexistencewillbeconfirmedonlybytheoccurrence
ornonoccurrenceofoneormoreuncertainfutureeventsnotwhollywithinthecontroloftheGroup.Contingentassetsare
disclosedinthefinancialstatementswhentheyarise.
Contingentliabilities
Contingentliabilityisaprobableobligationthatarisesfrompasteventsandwhoseexistencewillbeconfirmedonlybythe
occurrenceornon-occurrenceofoneormoreuncertainfutureeventsnotwhollywithinthecontroloftheGroup.Contingent
liabilitiesaredisclosedinthefinancialstatements.Howevertheyarerecognized,ifitisprobablethatanoutflowofeconomic
resourceswillberequiredtosettletheobligationandtheamountcanbereliablyestimated.
Financialguarantees
FinancialguaranteesarecontractsthatrequiretheGrouptomakespecifiedpaymentstoreimbursetheholderfora loss
it incursbecauseaspecifieddebtor fails tomakepaymentwhendue inaccordancewith the termsofadebt instrument.
Financialguaranteeliabilitiesarerecognisedinitiallyattheirfairvalue,andtheinitialfairvalueisamortisedoverthelifeof
thefinancialguarantee.Thefinancialguaranteeliabilityissubsequentlycarriedatthehigherofthisamortisedamountand
thepresentvalueofanyexpectedpaymentwhenapaymentundertheguaranteehasbecomeprobable.Financialguarantees
areincludedwithinotherliabilities.Thefeeincomeearnedisrecognisedonastraight-linebasisoverthelifeoftheguarantee.
2.16 Comparatives
Except when a standard or an interpretation permits or requires otherwise, all amounts are reported or disclosed with
comparativeWhereIAS8applies,comparativefigureshavebeenadjustedtoconformwithchangesinpresentationinthe
currentyear.
3 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including
expectationsoffutureeventsthatarebelievedtobereasonableunderthecircumstances.
Thegroupmakesestimatesandassumptionsconcerningthefuture.Theresultingaccountingestimateswill,bydefinition,
seldomequal therelatedactual results.Theestimatesandassumptionsthathaveasignificantriskofcausingamaterial
adjustmenttothecarryingamountsofassetsandliabilitieswithinthenextfinancialyearareaddressedbelow.
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3.1. Impairment losses on loans and advances
TheGroupreviewsitsloanportfoliostoassessimpairmentperiodically.Indeterminingwhetheranimpairmentlossshouldbe
recordedinstatementofprofitorloss,theGroupmakesjudgementsastowhetherthereisanyobservabledataindicatingan
impairmenttrigger,followedbymeasurabledecreaseintheestimatedfuturecashflowsfromtheportfolioofloans,beforethe
decreasecanbeidentifiedwiththatportfolio.Thisevidencemayincludeobservabledatathatindicatessignificantfinancial
difficulty,defaultonthefacilityorprobabilitythattheobligorwillenterbankruptcy,orotherobservabledatarelatingtoa
groupofassetssuchasadversechangesinthepaymentstatusofborrowersorissuersinthegroup,oreconomicconditions
thatcorrelatewithdefaultsinthegroup.TheGroupusesestimatesbasedonhistoricallossexperienceforassetswithcredit
riskcharacteristicsandobjectiveevidenceofimpairmentsimilartothoseintheportfolio.Theloanimpairmentprovisionwas
basedonriskratingofobligorandlossnormsattachedtoeachriskrating.Thelossnormsarestatistisicallyderivedfrom
historicaldataandwerethesetodifferby+/-1basispoint,theimpairmentlosswouldbeN9,424,533higherorlower.Note18.3
detailsthemovementintheimpairmentprovisiononloansandadvancesfortheyear.
3.2. Impairment losses of available-for-sale equity investments
TheGroupdeterminesthatavailable-for-saleequityinvestmentsareimpairedwhentherehasbeenasignificantorprolonged
declineinthefairvaluebelowitscost.Thisdeterminationofwhatissignificantorprolongedrequiresjudgement.Inmaking
thisjudgement,theGroupevaluatesamongotherfactors,thedeteriorationinthefinancialhealthoftheinvestee,industry
andsectorperformance,changesintechnology,andoperationalandfinancingcashflows.
Had all the declines in fair value below cost for all equity investments been recognised in total, the Group would have
recognisedanadditionalN10,403,346lossinits31December2013financialstatements.
3.3. Fair value of financial instruments
Thefairvalueoffinancialinstrumentswherenoactivemarketexistsorwherequotedpricesarenototherwiseavailableare
determinedbyusingvaluationtechniques.Inthesecases,thefairvaluesareestimatedfromobservabledatainrespectof
similarfinancialinstrumentsorusingvaluationmodels.Wheremarketobservableinputsarenotavailable,theyareestimated
based on appropriate assumptions. Where valuation techniques (for example, models) are used to determine fair values,
theyarevalidatedandperiodicallyreviewedbyqualifiedpersonnelindependentofthosethatsourcedthem.Allmodelsare
certifiedbeforetheyareused,andmodelsarecalibratedtoensurethatoutputsreflectactualdataandcomparativemarket
prices.Totheextentpractical,modelsuseonlyobservabledata;however,areassuchascreditrisk(bothowncreditriskand
counterpartyrisk),volatilitiesandcorrelationsrequiremanagementtomakeestimates.Note4.2.2detailsfurthersensitivity
analysisonthenon-tradingportfolio.
Thefairvalueofinvestmentsecuritiesinnon-quotedequitysecuritiesisbasedonamodelthattakesobservabledatawith
significant unobservable adjustments or assumptions required. Were these unobservable adjustments or assumptions to
differby+/-100basispoints,thechangeinfairvaluewouldbeN14,171,000higherorlower.Note4.5.2detailsthemovement
inInvestmentsecuritiesunder.Level3thatrepresentthefairvalueofnon-quotedequitysecuritiesfortheyear.
4. FINANCIAL RISK MANAGEMENT
Theriskmanagementframeworkhasasitsfoundationonarobustsetofpolicies,proceduresandprocessescoveringthe
followingbroadcategoriesofrisk:Creditrisk,MarketriskandLiquidityrisk.
Theriskmanagementpoliciesserveasthebasisforriskidentificationandanalysisinherentintheproductofferingaswellas
operatingenvironment,settingofappropriaterisklimitsandcontrolsandmonitoringadherencetolimits.Riskmanagement
policiesandsystemsarereviewedregularlytoreflectchangesinmarketconditions,productsandservicesoffered.Business
managersandfunctionalheadsareacountableforrisksintheirbusinessesandfunctions.TheGroup,throughitstraining,
managementstandardsandprocedures,aims todevelopadisciplinedandconstructivecontrolenvironment, inwhichall
employeesunderstandtheirrolesandobligations.
Enterprise risk review
Thediversityofcustomers,products,andbusinessstrategiesatCitibankNigeriaLimitedrequiresthatwehaveawell-defined,
riskmanagementframeworktoidentify,analyze,originate,monitorandreportonacceptablerisktakingactivitieswithinpre-
definedthresholds.
The Group’s risk management function works with the business towards the goal of taking intelligent risk with shared
responsibility, without forsaking individual accountability and mitigating the potential of losses in risk activities under 3
broad categories: Credit risk, Liquidity and Market risk. Senior Business Management‘s objectives (budgets, portfolios
and investments) must be prudent, reflecting their view of risks and rewards arising from market conditions and should
dynamicallyadjustthesestrategiesandbudgetstofitchangingenvironments.
Governance structure
ThekeygovernancestructureincludestheBoardofDirectors,CreditCommittees,RiskManagementcommitteeandsenior
managementcommitteeswhichspecificallyfocusonthebroadriskcategoriesstatedabove.
The Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk management
framework.
TheBoardCreditCommitteehastheresponsibilityforapprovalofcreditfacilities,delegationofapprovallimitsandratification
ofManagementCredit committee limitsas recommendedby theCountryRiskManager.AllBoardcommitteeshaveboth
executiveandnon-executivemembersandreportregularlytotheboardofdirectorsontheiractivities.
AssetandLiabilityCommittee(ALCO)isresponsibleforthemarketriskmanagementandoversightforthebank.TheALCO
establishesandimplementsliquidityandpriceriskmanagementpolicies;approvestheannualliquidityandfundingplans;
approves and reviews the liquidity and price risk limits; monitors compliance with regulatory risk capital and the capital
managementproces.
Excessive risk concentration
Concentrationsarisewhenanumberofcounterpartiesareengagedinsimilarbusinessactivities,oractivitiesinthesame
geographicalregion,orhavesimilareconomicfeaturesthatwouldcausetheirabilitytomeetcontractualobligationstobe
similarlyaffectedbychangesineconomic,politicalorotherconditions.Concentrationsindicatetherelativesensitivityofthe
Group’sperformancetodevelopmentsaffectingaparticularindustryorgeographicallocation.Inordertoavoidexcessive
concentrationsofrisk,theGroup’spoliciesandproceduresincludespecificconcentrationlimitsbasedontheGroup’soveral
riskcapacity,capitalconsiderationsandevaluationofinternalandexternalenvironments.Identifiedconcentrationsofcredit
risksaremonitored,controlledandmanagedaccordingly.
4.1 Credit Risk
CreditriskistheriskoffinanciallosstotheGroupifacustomerorcounterpartytoafinancialinstrumentfailstomeetits
contractualobligations.ThisarisesprincipallyfromtheGroup’sloansandadvancestocustomersandbanks,andinvestment
debt securities. For risk management reporting purposes the bank considers and consolidates all elements of credit risk
exposure.
4.1.1 Management of Credit Risk
ThecreditpolicyisthebedrockofthecreditriskmanagementandispredicatedontheGroup’sbusinessstrategyandreturn
objective through well predefined target market, risk acceptance criteria and stress testing. Based on Board approval,
independentriskinconjuctionwiththebusinessunitsetandmonitorlimits.
Tomanagethecreditprocesswithpredictableresults,theGrouphasadyamicandinteractivethreephasedapproach:
i.Portfoliostrategyandplanning:WheretheGroupdefinesdesiredfinancialresultsandstrategiesrequiredtoachievethose
results.TargetmarketispartofthestrategythatidentifiestheacceptableprofileofcustomersandtheproductstheGroup
proposetooffer;
6766
ii)CreditOriginationandMaintenance:WheretheGroupcreatesandmaintainstransactionsandportfolioswithcharacteristics
thatareconsistentwithinstitutionalstrategies;and
iii)PerformanceAssessmentandReporting:WheretheGroupmonitorstheperformanceforcontinualimprovement.System
captureofcredit informationanddocumentationreview isanothercriticalattributeoffinancialanalysiswhichfacilitates
creditmonitoringdonebothonobligorandportfoliobasis.
Methodology for risk rating
TheRiskRatingProcessistheend-to-endprocessforderivingObligorRiskRating(ORR’s)andFacilityRiskRating(FRR’s).
Theseratingsarederivedaspartoftheoverallriskratingprocessthatinvolvestheuseofriskratingmodels,supplemental
guidelines,supportadjustments,collateraladjustments,processcontrols,aswellasanyotherdefinedprocessesthatthe
GroupundertakesinordertoarriveatORR’sandFRR’s.Therequiredinputsintothemodelforderivingtheriskratingare
theobligor’sfinancialstatements.Themodelsarestatisticalmodels,whicharerevalidatedperiodicallybytheCreditand
Operational Risk Analytics Group of Citigroup, which is based in New York. The revalidation had no impact but ensured
consistencyoftheratingprocess.
TheObligorRiskRating (ORR)represents theprobability thatanobligorwilldefaultwithinaone-year timehorizon.Risk
ratingsforobligorsareassignedonascaleof1to10,withsub-grades,where‘1’isthebestqualityriskand‘7’istheworstfor
performingandaccruingobligorsthatarenotindefault.ORR“9”and“10”ratingcategoriesindicatethattheobligorisin
default(ORR“8”isapplicableonlytoadverseclassificationsresultingsolelyfromcross-borderevents).
TheFacilityRiskRating(FRR)approximatesa‘LossNorm’foreachfacility,andistheproductoftwocomponents:theDefault
ProbabilityoftheObligor,i.e.thefinalORR,andtheLossGivenDefault(‘LGD’).FRR’sareassignedonascaleof1to10,with
sub-grades,where ‘1’ isthebestqualityriskand‘7’ istheworstforperformingoraccruingfacilities.The9and10rating
categoriesindicatefacilitiesthathavebeenplacedonnon-accrualstatus.
TheObligorLimitRating(OLR)representsalonger-term(beyondoneyear)viewofanobligor’screditquality.TheOLRis
derivedfromthefinalORRandconsidersarangeoffactors,suchasqualityofmanagementandstrategy,natureofindustry,
andregulatoryenvironment,amongotherfactors.
Aspartoftheriskmanagementprocess,theGroupassignsnumericriskratingstoitsObligorsbasedonquantitativeand
qualitativeassessmentoftheobligorandfacility.Theseriskratingsarereviewedatleastannuallyormoreoftenifmaterial
eventsrelatedtotheobligororfacilitywarrant.
4.1.2 Credit Risk Measurement
TheGroup’screditfacilitiesreflectthepotentialmaximumcreditexposureorlosstocounter-partyforaparticularproduct
and exposure type. In furtherance of this objective, we consistently ensure the Group’s business strategy and exposure
appetitearealigned.ThekeyattributesofourcreditpolicyarealsoconsistentwiththeCitigroupInstitutionalClientsGroup
(ICG) Principles and Policy Framework. This policy framework dictates best international practices in Risk Management,
includingcreditrisk.
Toenableconsistentmonitoringofexposureandrisk:
i)Allcreditexposuresmustbecapturedinthecreditsystems-irrespectiveofabsolutesizeofexposure,duration,location,
counterparty,authorizationlevelobtainedorperceivedeconomicrisk.
ii) Credit facility amounts must capture exposure (the maximum potential for loss to an obligor or counterparty). Risk
adjustmentsarereflectedforobligorlimitsandinotherreporting.
iii)Allpotentialcreditrelationshipsshouldhaveaproperaccountopenedinthenameoftheobligor.Forcurrentcreditsystem
integration,theclientshouldhaveaGlobalFinanceCustomerIdentifier(GFCID)created
iv)Everybusinessunitmustmaintainadequatecontrolstoensurecompliancewithallfacilitytermsandconditionsestablished
inconjunctionwithIndependentRisk.
v)Singlenametriggerspreventexcessiveconcentrationsoflosstoasinglename,andtogetherformthebasisforcompliance
withregulatoryrulessuchaslegallendinglimits.
vi)Obligorlimitsarethebasisforcreditportfoliomanagerstopreventconcentrationsoflosstoanyoneobligororrelationship.
BusinessunitsmustescalateanypotentialbreachofalimitasprovidedforintheCitigroupICGRiskManual.
vii)Creditfacilitiesandtheabilitytomanagetheexposureshouldbeinplacepriortoexecutinganynewbusiness.
viii)Allcreditrelationshipsshouldbereviewedannually,ataminimum,unlessotherwisedulyextended,whereappropriate.
ix)RiskratingsmustbeestablishedforallobligorsandfacilitiesusingtheCitigroupapprovedriskratingmethodology.
Credit exposure
Creditriskismeasuredbythetotalfacilitiesandexposuretotheobligorwhichconsistofoutstandingandunusedcommitted
facilityamounts.FinancialassetsandotherfinancialfacilitiesconstitutetheprimaryofferingoftheGroup.Theofferingis
basedonadetailedcreditreviewprocesswhichinvolvesanalysisofbothquantitativeandqualitativefactors.Thisincludes
riskratingoftheobligorandmatchingoftheobligor’squalitativeandquantitativeattributestopredefinedTargetMarketand
RiskAcceptanceCriteria,todeterminetheoptimalproductandcreditexposure.
Basedonthecreditreview,eachobligorisassignedanORR.TheORRratingisanassessmentoftheprobabilityofdefaultofa
specificobligorwithinaoneyearhorizonandisderivedfromeithertheDebtRatingModelorScorecard.TheScorecardisused
iftheobligordoesnothaveenoughfinancialinformation.ThebaselineORRfactorsbothquantitativeandqualitativeinputs.
TheFRRratingisanassessmentofthelikelylosscharacteristicsforanindividualfacility,giventheprobabilityofdefaultofa
specificobligor(productofthefinalORRandtheLossGivenDefault(LGD)).
TheGroup’sinternalratingsscaleandmappingtoexternalratingsarelistedbelow:
Theinternalratingsareassignedonascaleof1-10(withsub-grades),definedasfollows:
•1isthebestqualityriskforobligorsnotindefault
•7-istheworstqualityforobligorsnotindefault
•9and10areratingsassignedtoobligorsthatareindefaultandhavenon-performingfacilities
The internal rating classifications reflect the risk profile, which dictates approval level, exposure appetite and level of
monitoring required. Based on this, the investment grade represents the lowest risk profile while the speculative grade
reflectsthehighestriskofaperformingobligor.Defaultisaremedialnonperformingexposure.Allinternalratingsarecross
referencedtoS&PandMoody’sasaneffectivecalibrationtoexternalmarketdata.
Internal Rating Description of the grade External rating: External rating:
Standard & Poor’s equivalent Moody’s equivalent
1-4 InvestmentGrade AAAtoBBB- AaatoBaa3
5-6 NonInvestmentGrade BB+toB- Ba1toB3
7 SpeculativeGrade CCC+toCCC- Caa1toCaa3
9-10 Default Unrated* Unrated
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Monitoring
Once the credit transactions have been approved, there is an established process for monitoring the risk exposure and
maintainingitatacceptablelevels.
Theseriskmanagementprocessesinclude:
• Annualreviewoffacilitieswhichwillinvolverevalidationofexposurelimits,reviewofriskratingsandgeneralaccount
performanceduringthereviewperiod;
• Ataminimum,quarterlycreditcustomercallsincludingapprovingcreditofficers;
• Reviewofthemonthlyandquarterlyportfoliotrends;and
• Documentationreviewtoensureallrequireddocumentationisinplace.
4.1.3 Risk limit control and mitigation policies
TheGroupaspartofitsportfoliomonitoringfunctionsroutinelydefinesconcentrationlimits,withthegoalofestablishinga
well-diversifiedportfoliowhereexpectedreturnonriskcapitalshouldbecommensuratewiththeinherentrisktherein.Single
nametriggerspreventexcessiveconcentrationsoflosstoasinglename,andtogetherformthebasisforcompliancewith
regulatoryrulessuchaslegallendinglimits.Concentrationlimitsaremonitoredonamonthlybasis.
Someotherspecificcontrolandmitigationmeasuresareoutlinedbelow.
Authorizing level approval limit
TheGroup’sinternalcreditapprovallimitsareafunctionofexperienceandcreditexposureinlinewiththeCitigroupICGRisk
Manualrequirementandtheauthoritiesdelegatedbytheboard.However,theboardapprovedlimitsarelistedbelow:
Authorizing Level Approval Limit
Board N5billionandabovefornoncashcollateralizedfacilities(forratification)
BoardCreditCommittee(seenotebelow) 1.N800million–N2.2billionfornoncash-collateralisedfacilities(fornoting).
2.N2.2billion-N5billionfornoncash-collateralisedfacilities.
3.OverN5billionsubjecttofinalratificationbytheBoard,afterboardreviewof
thefullcredit
ManagementCredit 1.Allfullycash-collateralisedfacilities.
Committee 2.UptoN2.2billionfornoncashcollateralizedfacilities
Note:WheretheBoardCreditCommittee’sapprovalforanoncash-collateralisedfacilityisrequired,whichisoverandabove
anycashcollateralised facilities to thesameobligor, theBoardCreditCommitteemustbe informedof the total facilities
granted,i.e.inclusiveofcashcollateralisedfacilities.
ThekeyfeatureofcreditapprovalintheGroupisthefactthatnoonepersoncansinglyapproveacredit,irrespectiveofthe
limit.
Exposuretocreditriskisalsomanagedthroughperiodiccallsontheborrowerstoascertainoperatingperformanceand
determinetheircontinuedabilitytomeetallobligationsasandwhendue.
Collateral
TheGroupfocusesprimarilyonthecash-flowsoftheborrowerforitsrepayments.Thegeneralprincipleisthatrepayment
shouldcomefromthetransactionsfinancedorotheroperatingcash-flows.TheGroupmaintainsapolicyofnotlendinginan
inferiorposition,withoutproperapprovals(andonlyinexceptionalcircumstances),orwhereitisatadisadvantagetoother
lendersasregardsseniorityofclaiminadefaultscenario.
Duringtheannualcreditreviewprocess,searchesareconductedtoverifythattheGroupisnotlendinginaninferiorposition.
Ininstanceswherepre-existingchargesexistonthecustomer’sassets,theGroupgenerallydemandsapari-passuranking
withotherlenders.However,basedonthecreditprofileassessmentonacasebycasebasis,theBoardCreditCommitteemay
alsorequestforadditionalcollateralforcreditenhancement.
Fortermloansfortheacquisitionofspecificassets,theGroupgenerallytakesachargeovertheassetsfinancedbytheterm
loan.
Asageneralprinciple,allcreditsarereviewedandapprovedbasedbroadlyontheunderlistedkeyfactors:
- TheoperationsoftheBorrower/Obligorfallingwithintheapprovedtargetmarket
- Strongfinancialprofilewithemphasisonpresentandfuturecashflowwhichdeterminesthecapacityoftheoperations
tomeetdebtobligations.
- ReviewandassessmentofBorrower/Obligormanagementandsponsors.
- Credithistorytrackrecord.
- Economic/industrytrends
- ForaninternationalcompanywheretheGrouphasrecoursetobranchesorsubsidiariesofCitibankoutsideNigeria,or
wheretheexposureissecuredagainstguarantees,cashorothertypesofcollateral,theBankmayreservetheright
nottoinsistonobtainingalocalsecurityrankingpari-passuwithotherlocallenders,inviewofthesuperioraccessit
maintainsthroughitsglobalaffiliatestotheparentcompanyseniors.
TheGroupimplementstheaboveguidelinesontheacceptabilityofspecificclassesofcollateralorcreditriskmitigation.The
principalcollateraltypesforloansandadvancesare:
- Forsecuredlendingandreverserepurchasetransactions,cashorsecurities;
- Forcommerciallending,cashorchargesoverrealestateproperties,inventoryandtradereceivables;
- Chargesoverfinancialinstrumentssuchasdebtsecurities.
TheGroupalsoobtainsguaranteesfromparentcompaniesforloanstotheirsubsidiariesinNigeria.
Thetotalcollateralheldforloansandadvancesandotherfinancialfacilitiesasat31December2013wasN4,708,150,000
(2012:N11,253,284,503).
Master netting arrangements
The Group restricts its exposure to credit losses by entering into Master netting arrangements with counterparties with
whichitundertakesasignificantvolumeoftransactions.Masternettingarrangementsdonotgenerallyresultinanoffsetof
balancesheetassetsandliabilities,astransactionsareusuallysettledonagrossbasis.However,thecreditriskassociated
withfavourablecontractsisreducedbyamasternettingarrangementtotheextentthatifadefaultoccurs,allamountswith
thecounterpartyareterminatedandsettledonanetbasis.
4.1.4 Impairment and provisioning policies
The internal ratingsystemsdescribedabovefocusmoreoncredit-qualitymappingfromthe inceptionof the lendingand
investmentactivities.Incontrast,impairmentallowancesarerecognisedforfinancialreportingpurposesonlyforlossesthat
havebeenincurredatthebalancesheetdatebasedonobjectiveevidenceofimpairment.Duetodifferentmethodologies
appliedtheamountofincurredcreditlossesmaydifferfromthecriteriasetoutinthePrudentialGuidelinesforlicensedbanks
andanyadditionalprovisionsaretakeninlinewiththePrudentialguidelines.
Theimpairmentallowanceshowninthestatementoffinancialpositionatyear-endisderivedfromeachoftheinternalrating
grades.However,thelargestcomponentoftheimpairmentallowancecomesfromthedefaultgrade.Thetablebelowshows
thepercentageoftheGroup’screditexposureitemsthatincludefinancialassets,financialguarantees,loancommitmentsand
othercreditrelatedobligationsandtheassociatedimpairmentallowanceforeachoftheGroup’sinternalratingcategories.
2013 2012
Group rating Description of the grade Credit Exposure Impairment Credit Exposure Impairment
(%) (%) (%) (%)
1 - 4 InvestmentGrade 21 0 6 0
5 - 6 NonInvestmentGrade 68 0 93 0
7 SpeculativeGrade 11 0 1 0
9 - 10 Default 0 100 0 100
100 100 100
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4.1.5 Maximum exposure to credit risk before collateral held or other credit enhancements
Creditriskexposuresrelatingtofinancialassetsareasfollows:
2013 2012
N’000 N’000
CashandbalanceswithCentralBankofNigeria 22,996,953 20,762,072
Loansandadvancestobanks 122,258,126 121,241,497
Loansandadvancestocustomers 81,538,729 61,168,214
Tradingsecurities
-Debtsecurities 14,466,556 10,962,881
Derivativefinancialinstruments 14,237 167,107
Investmentsecurities
-Debtsecurities 88,762,097 96,621,962
Assetspledgedascollateral 4,646,152 7,808,015
Otherassets 837,687 532,102
335,520,537 319,263,850
Creditriskexposuresrelatingtoothercreditcommitmentsatgrossamountsareasfollows:
Bondsandguarantees 30,252,402 36,394,389
Loancommitments 12,353,883 10,580,142
Othercreditrelatedobligations 13,583,313 15,303,388
56,189,598 62,277,919
At 31 December 391,710,135 381,541,769
ThetableaboveshowsaworsecasescenarioofcreditriskexposuretotheGroupat31December2013and2012,without
takingaccountofanycollateralheldorothercreditenhancementsattached.Forfinancialassets,theexposuressetoutabove
arebasedonamountsasreportedintheconsolidatedstatementoffinancialposition.
Asshownabove,52%(2012:48%)ofthetotalmaximumexposureisderivedfromloansandadvancestobanksandcustomers;
26%(2012:28%)representsexposuretoinvestmentsindebtsecurities.
ManagementisconfidentinitsabilitytocontinuetocontrolandsustainminimalexposureofcreditrisktotheGroupresulting
frombothitsloanandadvancesportfolioanddebtsecuritiesbasedonthefollowing:
- 89%oftheloansandadvancesportfolioiscategorisedinthetoptwogradesoftheinternalratingsystem
(2012:99%);
- 99.96%oftheloansandadvancesportfolioisconsideredtobeneitherpastduenorimpaired(2012:99.95%);and
- TheGrouphasstringentselectionprocessforgrantingloansandadvances.
2013 Nigeria Europe USA Total
N’000 N’000 N’000 N’000
CashandbalanceswithCentralBankofNigeria 22,996,953 - - 22,996,953
Loansandadvancestobanks 17,143,737 11,200,948 93,913,441 122,258,126
Loansandadvancestocustomers 81,538,729 - - 81,538,729
Tradingsecurities
-Debtsecurities 14,466,556 - - 14,466,556
Derivativefinancialinstruments 4,196 10,041 - 14,237
Investmentsecurities-
-Debtsecurities 88,762,097 - - 88,762,097
Assetspledgedascollateral 4,646,152 - - 4,646,152
Otherassets 837,687 - - 837,687
230,396,107 11,210,989 93,913,441 335,520,537
Bondsandguarantees 30,252,402 - - 30,252,402
Loancommitments 12,353,883 - - 12,353,883
Othercreditrelatedobligations 13,583,313 - - 13,583,313
56,189,598 - - 56,189,598
At31December2013 286,585,705 11,210,989 93,913,441 391,710,135
Collateralheldasat31December2013 4,708,150 - - 4,708,150
2012 Nigeria Europe USA Total
N’000 N’000 N’000 N’000
CashandbalanceswithCentralBankofNigeria 20,762,072 - - 20,762,072
Loansandadvancestobanks 5,447,208 12,086,517 103,707,773 121,241,498
Loansandadvancestocustomers 61,168,214 - - 61,168,214
Tradingsecurities
-Debtsecurities 10,962,881 - - 10,962,881
Derivativefinancialinstruments 137,945 29,162 - 167,107
Investmentsecurities
-Debtsecurities 96,621,962 - - 96,621,962
Assetspledgedascollateral 7,808,015 - - 7,808,015
Otherassets 532,102 - - 532,102
203,440,399 12,115,679 103,707,773 319,263,851
Bondsandguarantees 36,394,389 - - 36,394,389
Loancommitments 10,580,142 - - 10,580,142
Othercreditrelatedobligations 15,303,388 - - 15,303,388
62,277,919 - - 62,277,919
At31December2012 265,718,318 12,115,679 103,707,773 381,541,770
Collateralheldasat31December2012 11,253,285 - - 11,253,285
4.1.6 Concentration of risks of financial assets with credit risk exposure
Geographical sectors
ThefollowingtableanalysestheGroup’screditexposure(withouttakingintoaccountanycollateralheldorothercredit
support),ascategorisedbygeographicalregionasat31December2013.Forthistable,theGrouphasallocatedexposures
toregionsbasedonthecountryofdomicileofitscounterparties.
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Industry sectors
ThefollowingtableanalysestheGroup’screditexposure(withouttakingintoaccountanycollateralheldorothercreditsupport),
ascategorisedbyindustrysectorsoftheGroup’scounterparties.
2013 Manufacturing Financial Government Transport and Other Total
Institutions Communication
Cashandbalanceswith
CentralBankofNigeria - 22,996,953 - - - 22,996,953
Loansandadvances
tobanks - 122,258,126 - - - 122,258,126
Loansandadvances
tocustomers 37,383,790 5,023,862 - 7,607,906 31,523,171 81,538,729
Tradingsecurities
-Debtsecurities - - 14,466,556 - - 14,466,556
Derivativefinancial
instruments 12,741 - - 1,496 14,237
Investmentsecurities
-Debtsecurities - - 88,762,097 - - 88,762,097
Assetspledgedas
collateral - - 4,646,152 - - 4,646,152
Otherassets - - 596,580 - 241,108 837,687
37,383,790 150,291,682 108,471,385 7,607,906 31,765,775 335,520,537
Bondsandguarantees 1,831,026 - - 594,504 27,826,872 30,252,402
Loancommitments 3,216,661 6,643,320 - 449,878 2,044,024 12,353,883
Othercreditrelated
obligations 12,084,449 - - - 1,498,864 13,583,313
17,132,136 6,643,320 - 1,044,382 31,369,760 56,189,598
At31December2013 54,515,926 156,935,002 108,471,385 8,652,288 63,135,534 391,710,135
Collateralheldas
at31December2013 3,206,700 - - 120,000 1,181,450 4,508,150
2012 Manufacturing Financial Government Transport and Other Total
Institutions Communication
Cashandbalanceswith
CentralBankofNigeria - 20,762,072 - - - 20,762,072
Loansandadvances
tobanks - 121,241,497 - - - 121,241,497
Loansandadvances
tocustomers 33,238,452 - - 5,058,749 22,871,013 61,168,214
Tradingsecurities
-Debtsecurities - - 10,962,881 - - 10,962,881
Derivativefinancial
instruments 2 167,105 - - - 167,107
Investmentsecurities
-Debtsecurities - - 96,621,962 - - 96,621,962
Assetspledgedas
collateral - - 7,808,015 - - 7,808,015
Otherassets - - 400,186 - 131,916 532,102
33,238,454 142,170,674 115,793,044 5,058,749 23,002,929 319,263,850
Bondsandguarantees 4,568,847 1,256,881 - 1,210,516 29,358,145 36,394,389
Loancommitments 856,410 4,684,500 - 5,039,232 - 10,580,142
Othercreditrelated
obligations 14,168,548 - - - 1,134,840 15,303,388
19,593,805 5,941,381 - 6,249,748 30,492,985 62,277,919
At31December2012 52,832,259 148,112,055 115,793,044 11,308,497 53,495,914 381,541,769
Collateralheldas
at31December2012 4,894,993 748,487 - 1,473,112 4,136,693 11,253,285
4.1.7 Loans and Advances
Loansandadvancesaresummarisedasfollows:
Analysisbyportfoliodistributionandriskrating
2013 2012
Loans and Loans and Loans and Loans and
advances to advances to advances to advances to
customers bank customers bank
Neitherpastdueorimpaired 82,940,321 122,328,311 62,260,052 121,277,472
Pastduebutnotimpaired - - - -
Individuallyimpaired 39,374 - 29,020 -
Gross 82,979,696 122,328,311 62,289,072 121,277,472
Less:Allowanceforimpairment (1,440,967) (70,185) (1,120,858) (35,975)
Net 81,538,729 122,258,126 61,168,214 121,241,497
Allowanceforimpairment:
Individualimpaired 39,374 - 29,020 -
Portfolioallowance 1,401,592 70,185 1,091,838 35,975
Total 1,440,967 70,185 1,120,858 35,975
ThetotalimpairmentforloansandadvancesisN1,511million(2012:N1,157million)ofwhichN39.4million(2012:29.0million)
representstheindividuallyimpairedloansandtheremainingamountofN1,472million(2012:N1,128million)representsthe
portfolioallowance.Furtherinformationoftheimpairmentallowanceforloansandadvancestobanksandtocustomersis
providedinNotes17and18respectively.
Objective evidence that financial assets are impaired can include significant financial difficulty, default on the facility or
probabilitythattheobligorwillenterbankruptcy,thedisappearanceofanactivemarketforasecurity,orotherobservable
datarelatingtoagroupofassetssuchasadversechangesinthepaymentstatusofborrowersorissuersinthegroup,or
economicconditionsthatcorrelatewithdefaultsinthegroup.
Loans and advances neither past due nor impaired
Thecreditqualityoftheportfolioofloansandadvancesthatwereneitherpastduenorimpairedcanbeassessedbyreference
totheinternalratingsystemadoptedbytheGroup. .
Loans and advances to customers: Corporate
2013 2012
Group’s rating Description of Overdraft Term loans Total Overdraft Term loans Total
the grade
1-4 InvestmentGrade 17,115,949 2,461,033 19,576,982 17,091,882 7,372,404 24,464,286
5-6 NonInvestmentGrade 5,424,822 47,282,459 52,707,281 13,563,539 19,031,349 32,594,888
7 SpeculativeGrade 3,565,673 5,688,793 9,254,466 1,941,164 2,167,877 4,109,041
26,106,444 55,432,285 81,538,729 32,596,585 28,571,630 61,168,215
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Loans and advances individually impaired
Thebreakdownofthegrossamountofindividuallyimpairedloansandadvancesbyclass,alongwiththefairvalueofrelated
collateralheldbytheGroupassecurity,areasfollows:
Loans and advances to customers: Corporate
2013 2012
Loans and Loans and Total Loans and Loans and Total
advances to advances to advances to advances to
customers banks customers banks
Grossamount 39,374 - 39,374 29,020 - 29,020
Impairment (39,374) - (39,374) (29,020) - (29,020)
Fairvalueofcollateral - - - - - -
- - - - - -
4.1.8 Analysis of financial assets by credit rating
2013
Group’s rating 1 - 4 5 - 6 7 9 -10 Total
Description of the grade Investment Non Investment Non Investment Default
Grade Grade Grade
CashandbalanceswithCentral
BankofNigeria - 22,996,953 - - 22,996,953
Loansandadvancestobanks 105,330,050 16,928,076 - - 122,258,126
Loansandadvancestocustomers 19,576,982 52,707,281 9,254,466 - 81,538,729
Tradingsecurities
-Debtsecurities - 14,466,556 - - 14,466,556
Derivativefinancialinstruments 10,041 4,196 - - 14,237
Investmentsecurities
-Debtsecurities - 88,762,097 - - 88,762,097
Assetspledgedascollateral - 4,646,152 - - 4,646,152
OtherAssets - 837,687 - - 837,687
124,917,073 201,348,998 9,254,466 - 335,520,538
2012
Group’s rating 1 - 4 5 - 6 7 9 -10 Total
Description of the grade Investment Non Investment Non Investment Default
Grade Grade Grade
CashandbalanceswithCentral
BankofNigeria - 20,762,072 - - 20,762,072
Loansandadvancestobanks - 121,241,497 - - 121,241,497
Loansandadvancestocustomers 24,464,286 32,594,888 4,109,040 - 61,168,214
Tradingsecurities
-Debtsecurities - 10,962,881 - - 10,962,881
Derivativefinancialinstruments - 167,107 - - 167,107
Investmentsecurities
-Debtsecurities - 96,621,962 - - 96,621,962
Assetspledgedascollateral - 7,808,015 - - 7,808,015
OtherAssets - 532,102 - - 532,102
24,464,286 290,690,524 4,109,040 - 319,263,850
4.2 Market Risk
Marketriskistheriskthatthefairvalueoffuturecashflowsofafinancialinstrumentwillfluctuatebecauseofchangesin
marketprices.Marketriskcomprisesbothcurrencyriskandpricerisk.Currencyriskistheriskthatthefairvalueorfuture
cashflowsofafinancialinstrumentwillfluctuatebecauseofchangesinforeignexchangerates.Priceriskistheearnings
riskfromchangesininterestrates,andequityandcommodityprices.Priceriskarisesinnon-tradingportfolios,aswellasin
tradingportfolios.
Marketrisksaremeasuredinaccordancewithestablishedstandardstoensureconsistencyacrossbusinessesandtheability
toaggregaterisk.TheGroupisrequiredtoestablish,withapprovalfromindependentmarketriskmanagement,amarket
risklimitframeworkforidentifiedriskfactorsthatclearlydefinesapprovedriskprofileswhicharewithintheparametersof
Citigroup’soverallriskappetite.Inallcases,theGroup’sTreasurydepartmentisultimatelyresponsibleforthemarketrisks
oftheGroupandforremainingwithinitsdefinedlimits.
4.2.1 Foreign Exchange Risk
ForeignExchangeriskistheexposureoftheGroup’sfinancialconditiontoadversemovementsinexchangerates.TheGroup
isexposedtoforeignexchangeriskprimarilythroughitsassets,managingcustomers’depositsandthroughactingasan
intermediaryinforeignexchangetransactions.
Foreign Exchange Risk Management
TheGrouphasarobustriskmanagementsystemthatidentifies,measuresandmitigatestheforeigncurrencyexchangerate
riskonitsfinancialpositionandcashflows.Apartfromregulatoryimposedlimitssuchasthenetopenpositionlimit(OPL)
thathelpstolimittheseexposures,theGrouphasmarketrisklimitssuchas:
-Individualovernightpositionlimitsforindividualcurrencypositions,whichlimitsexchangerateriskinallcurrencies
thattheGrouphasexposures.
-Crosscurrencyfundinglimits(CCFL)thatrestrictstheproportionoflocalcurrencyassetsfundedbyforeigncurrency
liabilities.
-Dailymark-to-marketmechanismthatrevaluesallcurrencypositionsdaily,ensuringthatforeigncurrencypositions
arevaluedatcurrentmarketpriceandnotatcost.
-Trading Management Action Trigger (MAT): This limits, on a realized or mark–to-market basis, the maximum loss
thatyourtotalcurrencypositioncanmakebeforeescalationismadetotheGroup’smanagementandthepositions
liquidatedoreffectivelyhedged.
Where thereareavailable-for-sale securitiesdenominated incurrenciesother than the local currency (Naira), theGroup
couldmitigatethechangeinfairvalueattributabletoforeign-exchangeratemovementsinthosesecurities.Typically,the
instrumentemployedisaforwardforeign-exchangecontracts.
7776
ThetablebelowsummarizestheGroup’sexposuretoforeigncurrencyexchangerateriskat31December2012.Includedin
thetablearetheGroup’sfinancialassetsandliabilitiesatcarryingamounts,categorisedbycurrency.
At 31 December 2013 Naira Dollar GBP Euro Others Total
Assets N’000 N’000 N’000 N’000 N’000 N’000
Cashandbalanceswith
CentralbankofNigeria 22,851,368 90,771 22,648 32,166 - 22,996,953
Loansandadvancestobanks 6,097,936 114,705,968 403,716 429,055 621,451 122,258,126
Loansandadvances
tocustomers 49,047,603 29,750,429 27,415 2,680,055 33,227 81,538,729
Tradingsecurities 14,466,556 - - - - 14,466,556
Derivativefinancialinstruments - 1,496 - 12,741 - 14,237
Investmentsecurities 89,778,262 - - - - 89,778,262
Assetspledgedascollateral 4,646,152 - - - - 4,646,152
Otherassets 651,936 89,499 4,829 91,184 239 837,687
Total financial assets 187,539,813 144,638,163 458,608 3,245,201 654,917 336,536,703
Liabilities
Depositsfrombanks 217,141 73,295 42,098 924,891 5,818 1,263,243
Depositsfromcustomers 129,414,882 144,549,658 431,210 2,239,474 265,970 276,901,195
Derivativefinancial
instruments - 12,393 - - - 12,393
Otherborrowedfunds 700,000 - - - - 700,000
Otherliabilities 5,129,463 549,481 4,614 12,921 16 5,696,495
Total financial liabilities 135,461,487 145,184,827 477,922 3,177,286 271,804 284,573,326
Netfinancialposition 52,078,326 (546,664) (19,314) 67,915 383,114 51,963,377
Creditcommitmentsand
otherfinancialfacilities 22,345,100 26,896,808 57,043 6,793,273 97,375 56,189,598
At 31 December 2012 Naira Dollar GBP Euro Others Total
Assets N’000 N’000 N’000 N’000 N’000 N’000
Cashandbalanceswith
CentralbankofNigeria 20,503,289 227,670 16,342 14,771 - 20,762,072
Loansandadvancestobanks 545,382 117,559,854 1,126,657 1,495,387 514,217 121,241,497
Loansandadvances
tocustomers 39,254,081 17,817,411 65,137 3,970,788 60,797 61,168,214
Tradingsecurities 10,962,881 - - - - 10,962,881
Derivativefinancialinstruments - 135,361 10,587 11,073 10,086 167,107
Investmentsecurities 97,501,871 - - - - 97,501,871
Assetspledgedascollateral 7,808,015 - - - - 7,808,015
Otherassets 410,323 56,774 2,138 61,887 980 532,102
Total financial assets 176,985,842 135,797,070 1,220,861 5,553,906 586,080 320,143,759
Liabilities
Depositsfrombanks 10,379,462 38,684 21,443 - 537 10,440,126
Depositsfromcustomers 123,707,378 123,679,607 670,410 1,946,637 153,977 250,158,009
Derivativefinancial
instruments - 66,297 15,901 7,968 3,384 93,550
Otherborrowedfunds 2,285,714 - - - - 2,285,714
Otherliabilities 4,173,055 291,989 4,707 106,675 118 4,576,544
Total financial liabilities 140,545,609 124,076,577 712,461 2,061,280 158,016 267,553,944
Netfinancialposition 36,440,233 11,720,493 508,400 3,492,626 428,063 52,589,815
Creditcommitmentsand
otherfinancialfacilities 39,347,418 18,815,658 87,094 3,882,571 145,178 62,277,919
4.2.2 Price Risk
Priceriskistheriskthatthefairvalueoffuturecashflowsofafinancialinstrumentwillfluctuatebecauseofchangesinmarket
prices,whetherthosechangesarecausedbyfactorsspecifictotheindividualfinancialinstrumentoritsissuerorbyfactors
affectingallsimilarfinancialinstrumentstradedinthemarket.TheGroupassessthepotentialimpactthatfluctuationsof
idenfiedmarketriskfactorswouldhaveontheGroup’sincomeandthevalueofitsholdingsoffinancialinstruments.
Price Risk Management
Non Trading Portfolios
InterestRateRisk
OneofGroup’sprimarybusinessfunctionsisprovidingfinancialproductsthatmeettheneedsofitscustomers.Loansand
depositsaretailoredtothecustomers’requirementswithregardtotenor,index,andratetype.Netinterestrevenue(NIR)is
thedifferencebetweentheyieldearnedonthenon-tradingportfolioassets(includingcustomerloans)andtheratepaidon
theliabilities(includingcustomerdepositsorwholesaleborrowings).NIRisaffectedbychangesinthelevelofinterestrates.
Forexample:
-Atanygiventime,theremaybeanunequalamountofassetsandliabilitieswhicharesubjecttomarketratesdueto
maturationorrepricing.Whenevertheamountofliabilitiessubjecttorepricingexceedstheamountofassetssubject
torepricing,acompanyisconsidered“liabilitysensitive.”Inthiscase,acompany’sNIRwilldeteriorateinarisingrate
environment.
-Theassetsandliabilitiesofacompanymayrepriceatdifferentspeedsormatureatdifferenttimes,subjectingboth
“liability-sensitive”and“assetsensitive”companiestoNIRsensitivityfromchanginginterestrates.Forexample,a
companymayhavealargeamountofloansthataresubjecttorepricingataparticularperiod,butthemajorityof
depositsarenotscheduledforrepricinguntilthefollowingperiod.ThatcompanywouldsufferfromNIRdeterioration
ifinterestratesweretofall.
NIRinthecurrentperiodistheresultofcustomertransactionsandtherelatedcontractualratesoriginatedinpriorperiods
aswellasnewtransactionsinthecurrentperiod.Thoseprior-periodtransactionswillbeimpactedbychangesinrateson
floating-rateassetsandliabilitiesinthecurrentperiod.
Duetothelong-termnatureoftheportfolios,NIRwillvaryfromquartertoquarterevenassumingnochangeintheshapeor
leveloftheyieldcurveastheassetsandliabilitiesreprice.Theserepricingsareafunctionofimpliedforwardinterestrates,
which represent the overall market’s unbiased estimate of future interest rates and incorporate possible changes in the
overnightrateaswellastheshapeoftheyieldcurve.
InterestRateRiskGovernance
TherisksintheGroup’snon-tradedportfoliosareestimatedusingacommonsetofstandardsthatdefine,measure,limitand
reportthemarketrisk.Eachbusinessisrequiredtoestablish,withapprovalfromindependentmarketriskmanagement,a
marketrisklimitframeworkthatclearlydefinesapprovedriskprofilesandiswithintheparametersoftheGroup’soverallrisk
appetite.
Inallcases,thebusinessesareultimatelyresponsibleforthemarketriskstheytakeandforremainingwithintheirdefined
limits.Theselimitsaremonitoredbyindependentmarketrisk,countryandbusinessALCOsandfinancialcontrol.
InterestRateRiskMeasurement
Theprincipalrisktowhichnon-tradingportfoliosareexposedistheriskoflossfromfluctuationsinthefuturecashflowsor
fairvaluesoffinancial instrumentsbecauseofachangeinmarketinterestrates.Interestrateriskismanagedprincipally
throughmonitoringinterestrategapsandbyhavingpre-approvedlimits.ALCOisthemonitoringbodyforcompliancewith
theselimitsandisassistedbyTreasuryinitsday-to-daymonitoringactivities.
TheGroup’sprincipalmeasureofrisktonet interestrevenue is interestrateexposure(IRE). IREmeasuresthechangein
expectednetinterestrevenueineachcurrencyresultingsolelyfromunanticipatedchangesininterestrates.Factorssuchas
changesinvolumes,spreads,marginsandtheimpactofprior-periodpricingdecisionsarenotcapturedbyIRE.IREassumes
thatbusinessesmakenoadditionalchangesinpricingorbalancesinresponsetotheunanticipatedratechanges.
7978
IREmesuresthepotentialimpactonnetinterestrevenueoveraspecifiedperiod,fortheaccrualpositions,fromadefined
parallelshiftintheyieldcurve.Itisaforward-lookingmeasure,analogoustofactorsensitivityonthetradingportfolios.The
IREmeasuresthepotentialchangeofinterestratemarginoftheBankfor100basispointsparallelchangeofinterestrate
curveinthehorizon.
Theimpactofchangingprepaymentratesonloanportfoliosisincorporatedintotheresults.Forexample,inthedeclining
interestratescenarios,itisassumedthatmortgageportfoliosprepayfasterandincomeisreduced.Inaddition,inarising
interestratescenario,portionsofthedepositportfolioareassumedtoexperiencerateincreasesthatmaybelessthanthe
changeinmarketinterestrates.
Sensitivityanalysisinterestraterisk
Themanagementofinterestrateriskagainstinterestrategaplimitsissupplementedbymonitoringthesensitivityofthe
Group’sfinancialassetsandliabilitiestospecificinterestratescenarios.Thesensitivityanalysisistheeffectoftheassumed
changes in interestratesontheprofitor loss fortheperiod,basedonthefloatingratenon–tradingfinancialassetsand
financialliabilitiesheldat31December2013.Thesensitivityanalysisonthenon-tradingportfolioismeasuredbythechange
inDV01(Dollarvalueof01)thatmeasuresthechangeinvalueofthenon-tradingaccrualportfolioduetoa1basispointparallel
moveintheinterestrates.At31December2013,a1basispointparallelincreaseintheinterestrateswithallothervariables
heldconstantwouldhaveresultedtoatotal lossofN7,475,736(2012:N19,081,530).Ontheavailable-for-sale investment
securities,a1basispointparallelincreaseintheinterestrateswithallothervariablesheldconstant,asat31December2013,
wouldhaveresultedtoanothercomprehensiveincomelossofN12,678,336(2012:N23,200,000).
MitigationofRisk
Allfinancialinstitutions’financialperformanceissubjecttosomedegreeofriskduetochangesininterestrates.Inorderto
managetheseriskseffectively,theGroupmaymodifypricingonnewcustomerloansanddeposits,enterintotransactions
withotherinstitutionsorenterintoforwardexchangecontractsthathavetheoppositeriskexposures.Therefore,theGroup
regularlyassessestheviabilityofstrategiestoreduceunacceptableriskstoearningsandimplementssuchstrategieswhen
theGroupbelievesthoseactionsareprudent.Asinformationbecomesavailable,theGroupformulatesstrategiesaimedat
protectingearningsfromthepotentialnegativeeffectsofchangesininterestrates.
TheGroupemploysadditionalmeasurements,includingstresstestingontheimpactofnon-linearinterestratemovements
onthevalueofthebalancesheet;theanalysisofportfolioduration,volatilityandthepotentialimpactofthechangeinthe
spreadbetweendifferentmarketindices.
Trading Portfolios
Priceriskintradingportfoliosismonitoredusingaseriesofmeasures,including:
-Factorsensitivities
-Value-at-Risk(VAR)
-Stresstesting
i) Factor sensitivities
Factorsensitivitiesareexpressedasthechangeinthevalueofapositionforadefinedchangeinamarketriskfactor,such
asachangeinthepriceofatreasurybillforaone-basis-pointchangeininterestrates.TheGroupindependentmarketrisk
managementensuresthatfactorsensitivitiesarecalculated,monitoredand,inmostcases,limited,forallrelevantriskstaken
inatradingportfolio.
ii) Value-at-Risk (VAR)
TheGroupappliesaValueatRisk(VAR)methodologytoitstradingportfoliostoestimatethemarketriskofpositionsheld
andthemaximumlossesexpected,baseduponanumberofassumptions forvariouschanges inmarketconditions.VAR
isastatisticallybasedestimateof thepotential lossonthecurrentportfolio fromadversemarketmovements.TheVAR
methodincorporatesthefactorsensitivitiesofthetradingportfoliowiththevolatilitiesandcorrelationsofthosefactorsand
isexpressedasthe‘maximum’amounttheBankmightloseoveraone-dayholdingperiod,ata99%confidencelevel.The
Group’sVARisbasedonthevolatilitiesofandcorrelationsamongamultitudeofmarketriskfactorsaswellasfactorsthat
trackthespecificissuerriskindebtsecurities.
AsVARconstitutesanintegralpartoftheGroup’smarketriskcontrolregime,VARlimitsaresetbytheGroup’sALCO,after
consultationswithCitigroupIndependentRiskManagement.Actualexposureagainstlimits,togetherwithabank-wideVAR,
is revieweddailybyTreasury.The following table summarises tradingprice riskbydisclosing theVaRexposureasat31
December:
VAR Analysis 2013 2012
N’000 N’000
Interestraterisk 244,122 395,528
Foreigncurrencyrisk 3,490 4,216
Overallportfoliorisk 243,610 395,996
TheGroupperiodicallyperformsextensiveback-testingofmanyhypotheticaltestportfoliosasonecheckoftheaccuracy
ofitsVAR.Back-testingistheprocessinwhichthedailyVARofaportfolioiscomparedtotheactualdailychangeinthe
marketvalueofitstransactions.Back-testingisconductedtoconfirmthatthedailymarketvaluelossesinexcessofa99%
confidenceleveloccur,onaverage,only1%ofthetime.TheVARcalculationforthehypotheticaltestportfolios,withdifferent
degreesofriskconcentration,meetsthesestatisticalcriteria.
iii) Stress testing
Stresstestingisperformedontradingportfoliosonaregularbasistoestimatetheimpactofextrememarketmovements.
Itisperformedonbothindividualtradingportfolios,andonaggregationsofportfoliosandbusinesses.Independentmarket
riskmanagement,inconjunctionwiththebusinesses,developsstressscenarios,reviewstheoutputofperiodicstresstesting
exercises,andusestheinformationtomakejudgmentsastotheongoingappropriatenessofexposurelevelsandlimits
Eachtradingportfoliohasitsownmarketrisklimitframeworkencompassingthesemeasuresandothercontrols,including
permittedproductlistsandanewproductapprovalprocessforcomplexproducts.
Thelevelofpriceriskexposureatanygivenpointintimedependsonthemarketenvironmentandexpectationsoffuture
priceandmarketmovements,andwillvaryfromperiodtoperiod.
4.3 Liquidity Risk
LiquidityriskistheriskthattheGroupisunabletomeetitsobligationsasandwhentheyfallduewithoutaffectingitsdaily
operations or its financial condition. The Group’s approach to managing liquidity is to ensure, as far as possible, that it
alwayshassufficientliquiditytomeetitsliabilitieswhendue,underbothnormalandstressedconditions,withoutincurring
unacceptablelossesorriskingdamagetothebank’sreputation.
Liquidity Risk Management
ManagementofliquidityattheGroupistheresponsibilityoftheRiskTreasurer.Thereisauniformliquidityriskmanagement
policyforCitigroup.Underthispolicy, there isasinglesetofstandardsforthemeasurementof liquidityrisk inorderto
ensureconsistencyacrossbusinesses,stabilityinmethodologiesandtransparencyofrisk.Managementofliquidityriskis
performedonadailybasisandismonitoredbytheCountryTreasurerandindependentriskmanagement,combinedwithan
activecorporateoversightfunction.
TheGroup’sALCOundertakesthisoversightresponsibilityalongwiththeCountryTreasurer.OneoftheobjectivesofALCO
istomonitorandreviewtheoverall liquidityandbalancesheetpositionsof theGroup.TheRiskTreasurermustprepare
anannualfundingandliquidityplanforreviewbytheCountryTreasurerandapprovedbyindependentriskmanagement.
Thefundingandliquidityplanincludesanalysisofthestatementoffinancialposition,aswellastheeconomicandbusiness
conditions impacting the liquidityof theGroup.Aspartof the fundingand liquidityplan, liquidity limits, liquidity ratios,
markettriggers,andassumptionsforperiodicstresstestsareestablishedandapproved.Ataminimum,theseparameters
arereviewedonanannualbasis.
8180
Liquiditylimits
Liquiditylimitsestablishboundariesformarketaccessinbusiness-as-usualconditionsandaremonitoredagainsttheliquidity
positiononadailybasis.Theselimitsareestablishedbasedonthesizeofthestatementoffinancialposition,depthofthe
market,experience levelof localmanagement,stabilityof the liabilitiesand liquidityof theassets.Finally, the limitsare
subject toevaluationof theGroup’sstress testresult.Generally, limitsareestablishedsuchthat instressscenarios, the
entitiesareself-fundedornetprovidersofliquidity.Thus,therisktoleranceoftheliquiditypositionislimitedbasedonthe
capacitytocoverthepositioninastressedenvironment.TheselimitsarethekeydailyriskmanagementtoolsforTreasury
management.
Liquiditysources
TheGroupmaintainscashandaportfolioofhighlyliquidgovernmentsecuritiesthatcouldbesoldorfinancedonasecured
basis.
Liquidityratios
Aseriesofstandardcorporate-wideliquidityratioshavebeenestablishedtomonitorthestructuralelementsoftheGroup’s
liquidity. Ratios are established for liquid assets against short-term obligations. Key liquidity ratios include cash capital
(definedascoredeposits,long-termdebt,andcapitalcomparedwithilliquidassets),liquidassetsagainstliquiditygaps,core
depositstoloans,anddepositstoloans.Severalmeasuresexisttoreviewpotentialconcentrationsoffundingbyindividual
name,product,industry,orgeography.Triggersformanagementdiscussion,whichmayresultinotheractions,havebeen
establishedagainsttheseratios.
TheCentralBankofNigeriarequiresbankstomaintainastatutoryminimumliquidityratioof30%ofliquidassetstoallits
localcurrencydeposit liabilities.Forthispurpose, liquidassetscomprisecashandbalanceswithCentralBankofNigeria
andotherlocalbanks,treasurybills,FGNBonds,placementandmoneyatcallwithotherbanks.Depositliabilitiescomprise
depositsfromcustomers,depositsfrombanks.TheliquidityratioatthereportingdateDecember312013was91.73%(2012:
86.07%).
Market triggers:
Markettriggersareinternal,externalmarketoreconomicfactorsthatmayimplyachangetomarketliquidityorCitigroup’s
accesstothemarkets.CitibankNigeria’smarkettriggersaremonitoredonaweeklybasisbytheCountryTreasurerandthe
headofRiskandarepresentedtotheALCOatthemonthlymeeting.
Stress testing:
Simulated liquidity stress testing is periodically performed by the Group. A variety of firm-specific and market related
scenarios are used at the consolidated level and in individual businesses. These scenarios include assumptions about
significantchangesinkeyfundingsources,creditratings,contingentusesoffunding,andpoliticalandeconomicconditions
inspecificcountries.Theresultsofthestresstestsarereviewedtoensurethatthebankiseitheraself-fundedornetprovider
ofliquidity.Inaddition,aContingencyFundingPlanispreparedonaperiodicbasisforCitigroup.Theplanincludesdetailed
policies,procedures,rolesandresponsibilities,andtheresultsofcorporatestresstests.Theproductofthesestresstestsis
aseriesofalternativesthatcanbeusedbytheTreasurerinaliquidityevent.
4.3.1 Analysis of financial assets and liabilities by remaining contractual maturities
Thetablebelowsummarisesthematurityprofileofthefinancialassetsandliabilities:
31 December 2013 Up to 1 1 – 3 3 – 12 1 – 5 Over 5 Total
month months months years years
N’000 N’000 N’000 N’000 N’000 N’000
Assets:
CashandbalanceswithCentral
BankofNigeria 22,996,953 - - - - 22,996,953
Loansandadvancestobanks 111,551,102 - - 10,707,024 - 122,258,126
Loansandadvancestocustomers 48,202,315 11,887,119 1,798,028 15,088,137 4,563,129 81,538,729
Tradingsecurities 1,996,769 93,332 6,495,415 2,176,611 3,704,429 14,466,556
Derivativefinancialinstruments 6,817 - 7,420 - - 14,237
Investmentsecurities 10,247,634 21,979,248 2,361,316 41,602,611 13,587,452 89,778,262
Assetspledgedascollateral 118,864 4,527,288 - - - 4,646,152
Otherassets 123,858 275,932 437,897 - - 837,687
Total financial assets 195,244,312 38,762,919 11,100,076 69,574,383 21,855,010 336,536,702
Liabilities:
Depositsfrombanks 1,263,243 - - - - 1,263,243
Depositsfromcustomers 276,901,195 - - - - 276,901,195
Derivativefinancialinstruments 6,540 1 5,853 - - 12,393
Otherborrowedfunds - 700,000 - - - 700,000
Otherliabilities 1,492,636 366,365 1,191,399 2,646,095 - 5,696,495
Total financial liabilities 279,663,614 1,066,366 1,197,252 2,646,095 - 284,573,326
Net financial assets (liabilities) 84,419,302 (37,696,553) (9,902,826) (66,928,288) (21,855,010) (51,963,377)
31 December 2012 Up to 1 1 – 3 3 – 12 1 – 5 Over 5 Total
month months months years years
N’000 N’000 N’000 N’000 N’000 N’000
Assets:
CashandbalanceswithCentral
BankofNigeria 20,762,072 - - - - 20,762,072
Loansandadvancestobanks 117,532,954 - - 3,708,543 - 121,241,497
Loansandadvancestocustomers 36,448,810 11,696,260 6,556,361 6,008,097 458,686 61,168,214
Tradingsecurities 729,603 1,525,902 258,155 598,676 7,850,545 10,962,881
Derivativefinancialinstruments 14,964 146,147 5,996 - - 167,107
Investmentsecurities 8,971,033 14,033,972 4,964,118 46,783,086 22,749,661 97,501,871
Assetspledgedascollateral - - 6,426,820 1,381,195 - 7,808,015
Otherassets 20,784 511,318 - - - 532,102
Total financial assets 184,480,220 27,913,598 18,211,451 58,479,598 31,058,892 320,143,759
Liabilities:
Depositsfrombanks 10,440,127 - - - - 10,440,127
Depositsfromcustomers 247,016,524 3,123,624 17,862 - - 250,158,010
Derivativefinancialinstruments 79,346 10,462 3,741 - - 93,550
Otherborrowedfunds 728,571 - 1,557,143 - - 2,285,714
Otherliabilities 632,506 1,950,961 - 1,993,077 - 4,576,544
Total financial liabilities 258,897,075 5,085,047 1,578,746 1,993,077 - 267,553,945
Net financial assets (liabilities) 74,416,855 (22,828,551) (16,632,705) (56,486,521) (31,058,892) (52,589,814)
8382
Credit commitments and other financial facilities
31 December 2013 Up to 1 1 – 3 3 – 12 1 – 5 Over 5 Total
month months months years years
N’000 N’000 N’000 N’000 N’000 N’000
Loancommitments - - - 7,332,666 5,021,217 12,353,883
Guarantees,acceptancesandother
financialfacilities 12,615,768 773,093 5,123,993 972,981 24,349,880 43,835,715
Total 12,615,768 773,093 5,123,993 8,305,647 29,371,097 56,189,598
31 December 2012 Up to 1 1 – 3 3 – 12 1 – 5 Over 5 Total
month months months years years
N’000 N’000 N’000 N’000 N’000 N’000
Loancommitments - - - 9,773,155 806,987 10,580,142
Guarantees,acceptancesandother
financialfacilities 2,026,846 4,276,725 16,884,461 297,339 28,212,406 51,697,777
Total 2,026,846 4,276,725 16,884,461 10,070,494 29,019,393 62,277,919
4.4 Capital Management
TheGroup’scapitalmanagementprocessisdesignedtoensuremaintenanceofsufficientcapitalconsistentwiththeGroup’s
riskprofile,allapplicableregulatorystandardsandguidelines.ItistheGroup’sobjectivetomaintainastrongcapitalbaseto
supportthebusinessandregulatorycapitalrequirementsatalltimes.Thecapitalmanagementprocessiscentrallyoverseen
byseniormanagementandisreviewedattheconsolidated,legalentity,andcountrylevel.
Regulatory Capital
TheGroup’sprimaryregulator,CentralBankofNigeria,setsandmonitorscapitalrequirementsforthebank.Itprescribes
theminimumratioforcapitaladequacyandminimumcapitalrequirements.TheBankmustatalltimesmeettherelevant
minimumcapitalrequirementsoftheCentralBankofNigeria.TheBankhasestablishedprocessesandcontrolsinplaceto
monitorandmanageitscapitalrequirementsandremainedincompliancewiththeserequirementsthroughouttheyear.
Thecapitaladequacyrequirementsassetout in theCentralBankofNigeria,prescribesaminimumratioof totalcapital
tototalrisk-weightedassets.TheriskweightedassetsarearrivedatusingtheBasel1framework,asdefinedintheCentral
BankofNigeriaguidelines,onbothbalancesheetpositionandcreditcommitmentsandotherfinancialfacilitiestoreflectthe
relativeriskofeachassetandcounterparty.
TheBank’sregulatorycapitalcomprisesoftwotiersasfollows:
Tier1capital: sharecapital,statutoryreserve,retainedearningsandreservescreatedbyappropriationsofretained
earnings;and
Tier2capital: collective impairment allowances and the change in the fair value of available-for-sale investment
securities.
TheregulatorycapitalismanagedbyTreasury.
Further,ALCOmonitorstheRegulatoryandCitigroupcapitalratiorequirementstoensurecompliance.Asat31December
2013,theBankwasincompliancewithalltheapplicablecapitalratios.
ThetablebelowsummarisesthecompositionofregulatorycapitalandtheratiosoftheBankfortheyearsended31December
2013and2012.Duringthosetwoyears,theBankcompliedwithalloftheexternallyimposedcapitalrequirements
2013 2012
N’000 N’000
Tier 1 capital
Sharecapital 2,793,777 2,793,777
Sharepremium 11,643,995 11,643,995
Statutoryreserves 19,943,575 17,871,399
Retainedearnings 16,820,927 16,114,021
Total qualifying Tier 1 capital 51,202,274 48,423,192
Tier 2 capital
Collectiveportfolioimpairmentprovision 1,471,777 1,127,813
Fairvaluereserve (1,108,780) 749,278
Total qualifying Tier 2 capital 362,997 1,877,091
Total regulatory capital 51,565,271 50,300,283
Risk-weighted assets:
On-balancesheet 120,999,883 109,064,223
Off-balancesheet 30,586,913 60,775,828
Total risk-weighted assets 151,586,796 169,840,051
RiskweightedCapitalAdequacy
Ratio(RegulatoryMinimum10%) 34% 30%
8584
4.5 Fair value of financial assets and liabilities
4.5.1 Thetablebelowsummarisesthecarryingamountsandfairvaluesofthosefinancialassetsandliabilitiesnotmeasured
atfairvalueintheGroup’sconsolidatedstatementoffinancialposition
Carrying value Fair value
31 December 2013 2012 2013 2012
N’000 N’000 N’000 N’000
Financial assets
Loansandadvancestobanks 122,258,126 121,241,497 122,328,311 121,277,472
Loansandadvancestocustomers 81,538,729 61,168,214 82,940,321 62,260,052
Otherassets 837,687 532,102 837,687 532,102
204,634,542 182,941,813 206,106,320 184,069,626
Financial liabilities
Depositsfrombanks 1,263,243 10,440,127 1,263,243 10,440,127
Depositsfromcustomers 276,901,195 250,158,010 276,901,195 250,158,010
Otherborrowedfunds 700,000 2,285,714 700,000 2,285,714
Otherliabilities 5,696,494 4,576,544 5,696,494 4,576,544
284,560,932 267,460,395 284,560,932 267,460,395
Credit commitments and other financial facilities
Loancommitments 12,353,883 10,580,142 12,353,883 10,580,142
Guarantees,acceptancesandother
financialfacilities 56,189,598 51,697,778 56,189,598 51,697,778
68,543,481 62,277,920 68,543,481 62,277,920
Thetablesaboveshowtheclassificationoffinancialinstrumentsheldatfairvalueandcategorizedintothelevel3valuation
hierarchy.
i) Loans and advances to banks
Loansandadvancestobanksincludeinterbankplacements,loansanditemsinthecourseofcollection.
Thecarryingamountofthefloatingrateplacementsandovernightdepositsisareasonableapproximationoffairvalue.
ii) Loans and advances to customers
Loansandadvancestocustomersarenetofprovisionsforimpairment.Theestimatedfairvalueofloansandadvances
representsthediscountedamountoffuturecashflowsexpectedtobereceived,includingassumptionsrelatingtoprepayment
rates.Expectedcashflowsarediscountedatcurrentmarketratestodeterminefairvalue.Asubstantialproportionofloans
andadvancesrepricewithin12monthsandhencethegrosscarryingamountisagoodproxyofthefairvalue.
iii) Other Assets
Otherassetsrelatetoreceivablesthathaveashorttermmaturity(lessthanthreemonths)thereforeitisassumedthatthe
carryingamountsapproximatetheirfairvalue.
iv) Deposits from banks and customers and other liabilities
Theestimatedfairvalueofdepositswithnostatedmaturityistheamountrepayableondemand.Theestimatedfairvalueof
fixedinterestbearingdepositswithoutquotedmarketpricesisbasedondiscountingcashflowsusingtheprevailingmarket.
Asubstantialproportionofdepositsarewithin6monthsandhencethecarryingamountisagoodestimateofthefairvalue.
(v) Credit commitments and other financial facilities
Theestimatedfairvaluesofthecreditcommitmentsandotherfinancialfacilitiesarebasedonmarketpricesforsimilarfacil-
ities.Whenthisinformationisnotavailable,fairvalueisestimatedasthecarryingvalue.
4.5.2 Fair value hierarchy
TheGroupmeasuresfairvaluesusingthefollowingfairvaluehierarchythatreflectsthesignificanceoftheinputsusedin
makingthemeasurement.
Level1: Quotedmarketprice(unadjusted)inanactivemarketforanidenticalinstrument.
Level2: Valuationtechniquesbasedonobservableinputs,eitherdirectly(i.e.asprices)orindirectly(i.e.derivedfromprices).
Thiscategoryincludesinstrumentsvaluedusing:quotedmarketpricesinactivemarketsforsimilarinstruments;
quoted for identical or similar instruments in markets that are considered less than active; or other valuation
techniqueswhereallsignificantinputsaredirectlyorindirectlyobservablefrommarketdata.
Level3: Valuation techniques using significant unobservable inputs. This category includes all instruments where the
valuation technique includes inputs not based on observable data and the observable inputs have a significant
effectontheinstrument’svaluation.Thiscategoryincludesinstrumentsthatarevaluedbasedonquotedprices
for similar instruments where significant unobservable adjustments or assumptions are required to reflect the
differencebetweentheinstruments.
TheGroupusesthefollowingprocedurestodeterminethefairvalueoffinancialassetsandliabilities:
Trading securities
Whereavailable,theGroupusesthequotedmarketpricestodeterminethefairvalueoftradingassetsandsuchitemsare
classifiedasLevel1ofthefairvaluehierarchy.
Wheretherearesecuritiesthatarenotactivelytraded, theGroupuses internalvaluationtechniqueswhicharebasedon
observableinputsobtainedfromthequotedmarketpricesofsimiliaractivelytradedsecurities.
Derivatives
ThederivativesenteredintobytheGroupareexecutedoverthecounterandsoarevaluedusinginternalvaluationtechniques.
Thisderivativesconsistofforeignexchangeforwardcontractsandtheprincipaltechniqueusedtovaluetheseintrumentsis
basedonmarketobservableinputs.Thevaluationtechniquesincludeforwardpricingbasedoninterpolationofthecurrent
interestratesandforeignexchangerates.
Thekeyinputsdependuponthethetypeofderivativeandthenatureofunderlyinginstrumentandincludeinterestrateyield
curvesandforeignexchangerates,whicharebasedonobservableinputthereforeclassifiedasLevel2.
8786
31 December 2013 Level 1 Level 2 Level 3 Total
N’000 N’000 N’000 N’000
Assets
Tradingsecurities 10,140,019 4,326,536 - 14,466,556
Derivativefinancialinstruments - 14,237 - 14,237
Investmentsecurities 78,746,201 10,674,444 357,617 89,778,262
Total assets 88,886,220 15,015,217 357,617 104,259,055
Liabilities
Derivativefinancialinstruments - 12,393 - 12,393
Total liabilities - 12,393 - 12,393
31 December 2012 Level 1 Level 2 Level 3 Total
N’000 N’000 N’000 N’000
Assets
Tradingsecurities 10,409,514 553,367 - 10,962,881
Derivativefinancialinstruments - 167,107 - 167,107
Investmentsecurities 67,070,217 30,171,244 260,410 97,501,871
Total assets 77,479,730 30,891,719 260,410 108,631,859
Liabilities
Derivativefinancialinstruments - 93,550 - 93,550
Total liabilities - 93,550 - 93,550
ThefollowingtablepresentsthechangesinLevel3instrumentsfortheyearend31December2013.
2013 2012
N’000 N’000
At1January 260,410 201,347
Disposalofinvestmentsecurities (17,812) (62,537)
Netchangeinfairvalueofavailable-for-salesecurities 115,019 133,319
Impairment of equity securities - (11,719)
At 31 December 357,617 260,410
Investment securities
Investmentsecuritiesclassifiedasavailable-for-salearemeasuredatfairvaluebyreferencetoquotedmarketpriceswhen
availableandthereforeareclassifiedasLevel1.
Ifquotedmarketpricesarenotavailable,thefairvaluesareestimatedbasedoninternalvaluationtechniques.Thekeyinputs
dependuponthetypeofinvestmentsecurityandthenatureofinputstothevaluationtechnique.Theitemisplacedineither
Level2orLevel3dependingontheobservabilityofthesignificantinputstothemodel.
Thetablebelowshowstheclassificationoffinancialinstrumentsheldatfairvalueintothevaluationhierarchysetoutbelowasat31December:
Level3financialinstrumentsrelatestoavailable-for-saleunlistedequitysecuritiesandsincequotedmarketpricesarenot
available,thefairvaluesareestimatedbasedoninternalvaluationtechniquesasfollows:
i)InvestmentinSMEIIPartnershipfundwhichinturnhasequityinvestmentinvarioussmallandmediumenterprises.The
investmentvaluationisbasedontheportfoliovaluationdonebytheSMEfundManagers.
ii)OtherequityinvestmentrelatetoCentralSecuritiesClearingSystemLimited,NigerianInterbankSettlementSystemPlc
andUnifiedPaymentsServicesLimited.Thevaluationisbasedonamarketapproachvaluationwheretheadjustedprice/
earningsmultipleofcomparablecompaniesisutilised.
Therewasnotransferofsecuritiesbetweenlevelsin2013(2012:Nil)
Thenotesbelowrepresent“GroupandBank”withexceptionofwherethesearedifferentandthereforeseparatedisclosureis
madefor“Group”andfor“Bank”.
5. INTEREST INCOME
Interestincomecomprises:
2013 2012
N’000 N’000
CashandbalanceswithCentralBankofNigeria 1,164,299 292,446
Loansandadvancestobanks 1,673,497 2,019,173
Loansandadvancestocustomers 6,514,313 7,953,763
Tradingsecurities 506,986 2,714,433
Investmentsecurities 10,469,605 8,614,246
20,328,700 21,594,061
Investmentandtradingsecuritiescompriseofdebtsecurities
6. INTEREST EXPENSE
Interestexpensecomprises:
2013 2012
N’000 N’000
Depositsfrombanks 522,255 1,209,271
Depositsfromcustomers 4,275,067 4,974,789
Otherborrowedfunds 10,974 3,469
4,808,296 6,187,529
7. FEE AND COMMISSION INCOME AND EXPENSE
Feeandcommissionincome:
2013 2012
N’000 N’000
Advisoryrelatedfeesandcommissions 207,841 5,115
Custody&Clearingfees 597,924 372,184
Transactionalservicesfees 3,385,857 3,732,136
Otherfeesandcommissions 13,515 74,735
4,205,137 4,184,170
Fee and commission expense:
Otherfeespaid 34,160 20,435
34,160 20,435
8. NET GAINS / (LOSSES) FROM FINANCIAL INSTRUMENTS HELD FOR TRADING
2013 2012
N’000 N’000
Foreignexchangeincome 3,527,310 4,407,577
Tradingincomeonsecurities 1,546,817 1,845,858
5,074,127 6,253,435
8988
9. NET INVESTMENT INCOME
Group Group Bank Bank
2013 2012 2013 2012
N’000 N’000 N’000 N’000
Profitsonsaleofavailableforsale
investmentsecurities 3,589,060 2,152,967 3,589,060 2,152,967
Dividendonequitysecurities 33,939 16,037 45,034 24,913
Impairmentchargeonequity
investment(Note9.1) - (11,720) - (11,720)
3,622,999 2,157,284 3,634,094 2,166,160
10. OTHER OPERATING INCOME
Group Group
2013 2012
N’000 N’000
RentalIncome 168,721 166,900
Gainondisposalofproperty,plantandequipment 16,225 2,264
Otherincome - 7,162
184,946 176,326
11. PERSONNEL EXPENSES
Group Group Bank Bank
2013 2012 2013 2012
N’000 N’000 N’000 N’000
Wagesandsalaries 3,923,722 3,795,794 3,923,722 3,795,794
Pensioncosts(Note29) 172,406 171,059 172,406 171,059
Executivecompensation(Note38.2) 161,100 190,002 161,100 190,002
Otherindirectemployeecosts(Note11.1) 1,077,636 999,412 838,990 821,182
5,334,864 5,156,267 5,096,218 4,978,037
11.1 DividendpaidtostaffbasedontheTreasurysharesheldbythestaffparticipationschemeofN238,645,831(2012:
N178,229,313)whichwassubjecttowith-holdingtax,isincludedwithintheindirectemployeecostsincurredbytheGroup
12. OTHER OPERATING EXPENSES
Group Group Bank Bank
2013 2012 2013 2012
N’000 N’000 N’000 N’000
Generaladminstrativeexpenses 1,473,521 1,368,959 1,473,770 1,369,195
AMCONcharge(seenote12.1) 1,617,930 1,114,000 1,617,930 1,114,000
Depositinsurancepremium1,193,191 1,465,487 1,193,191 1,465,487
Communicationsandpostages 321,155 235,845 321,155 235,845
Travelandentertainment 228,930 318,558 228,930 318,558
Premises,furnitureandequipment 560,830 519,243 560,830 519,243
Informationtechnologylevy 169,586 172,079 169,586 172,079
Directorsfeesandallowances(Note38.2) 51,750 37,400 51,750 37,400
5,616,893 5,231,571 5,617,142 5,231,807
IncludedwithintheGeneraladministrativeexpensesisauditors’remunerationasfollows:
2013 2012 2013 2012
N’000 N’000 N’000 N’000
Auditor’sremuneration 55,500 65,500 54,000 64,000
12.1 AMCON charge
The Asset Management Corporation of Nigeria (AMCON) acquired Eligible Bank Assets from banks to resolve the non-
performingloanscrisis inthebankingindustry.TheGroupdidnotsellEligibleBankAssetstoAMCON.AllNigerianbanks
arerequiredtoparticipate inpartial fundingofthebankingsectorresolutioncoststhroughaprescribedAMCONcharge.
IncompliancewiththeMemorandumofUnderstandinginrelationtotheEstablishmentandfundingoftheBankingSector
resolutioncostsinkingfund,the2013AMCONchargecontributionwasN1.617billionrepresenting0.5%(2012:N1.114billion
representing0.3%)ofthebank’stotalbalancesheetassetsfortheprecedingyear.
13. NET CREDIT LOSSES
Group Group
2013 2012
N’000 N’000
Loans and advances to banks:
Increaseinimpairment(Note17.2) (34,210) (2,714)
Loans and advances to Customers:
Increaseinimpairment(Note18.3) (402,843) (243,388)
Recoveriesonloanspreviouslywrittenoff 517 4,131
(436,537) (241,971)
9190
14. TAXATION
14.1 The tax charge for the year comprises:
Group Group Bank Bank
2013 2012 2013 2012
N’000 N’000 N’000 N’000
Corporateincometax 3,630,633 3,389,112 3,630,553 3,389,037
Educationtax 142,707 222,472 142,707 222,472
Adjustmentsinrespectofprioryear(Note14.3) (160,090) 28,906 (160,090) 28,906
Currentincometaxcharge 3,613,250 3,640,490 3,613,170 3,640,414
Deferredtaxation(Note34) (346,158) 234,376 (346,158) 234,376
3,267,092 3,874,866 3,267,012 3,874,790
14.2ThetaxontheGroup’sprofitdiffersfromthetheoreticalamountusingthebasictaxrateasfollows:
Group Group Bank Bank
2013 2012 2013 2012
N’000 N’000 N’000 N’000
Profitbeforetax 16,910,222 16,899,258 17,081,517 17,029,476
Computedtaxusingtheapplicable
corporatetaxrateat30% 5,073,067 5,069,778 5,124,455 5,108,843
Educationtax 142,707 222,471 142,707 222,471
Taxeffectonassociate’sshareofprofit
reportednetoftax (23,459) (16,996) - -
Taxeffectofnon-deductibleexpenses 573,980 253,148 502,307 199,604
Taxeffectofnon-taxableincome (2,339,113) (1,682,441) (2,342,367) (1,685,033
3,427,182 3,845,960 3,427,102 3,845,885
Adjustmentsinrespectofprioryear(Note14.3) (160,090) 28,906 (160,090) 28,906
Income tax expense 3,267,092 3,874,866 3,267,012 3,874,791
Thecurrenttaxchargehasbeencomputedattheapplicablerateof30%(2012:30%)ontheprofitfortheyearafteradjusting
forcertainitemsofincomeandexpenditure,whicharenotdeductibleorchargeablefortaxpurposes.Thisresultedtoan
effectivetaxrateof19%(2012:23%).Inaddition,itincludes2%(2012:2%)educationtaxchargefortheyear.
14.3 Theadjustmentinrespectofprioryearreflectsthedefferencebetweentheestimatedtaxliabilityrecognisedinthe
financialstatementsandthefinaltaxreturnssubmittedtothetaxauthorityforthatyear.
14.4 Thetax(charge)/creditrelatingtocomponentsofothercomprehensiveincomeisasfollows:
2013 Before tax Tax (charge) After tax
/credit
N’000 N’000 N’000
Fair value gains/(losses) on availablefor-sale assets (2,654,369) 796,311 (1,858,058)
2012 Before tax Tax (charge) After tax
/credit
N’000 N’000 N’000
Fair value gains/(losses) on availablefor-sale assets 6,840,822 (2,052,247) 4,788,575
15. EARNINGS PER SHARE
15.1 Basic
Basicearningspershare iscalculatedbydividing theprofitattributable toordinaryshareholdersof thecompanyby the
weightedaveragenumberofordinarysharesinissueduringtheyearexcludingtheaveragenumberofordinarysharesheld
bytheGroupastreasuryshares.
Group Group Bank Bank
2013 2012 2013 2012
N’000 N’000 N’000 N’000
Profitattributabletoordinary
shareholders(N’000) 13,643,130 13,024,392 13,814,505 13,154,684
Weightedaveragenumberofordinary
sharesinissue(N’000) 2,793,777 2,793,777 2,793,777 2,793,777
LessTreasuryshares(N’000) (60,417) (60,417) - -
Adjustedweightedaveragenumberof
ordinarysharesinissue 2,733,360 2,733,360 2,793,777 2,793,777
Basicearningspershare
(expressedinNairapershare) 4.99 4.76 4.94 4.71
15.2 Diluted
TheGroupdoesnothavepotentialordinaryshareswithconvertibleoptionandthereforethereisnodilutiveimpactonthe
profitattributtabletotheordinaryshareholdersoftheGroup(2012:Nil).
16. CASH AND BALANCES WITH CENTRAL BANK OF NIGERIA:
16.1 Cash and balances with Central Bank of Nigeria:
2013 2012
N’000 N’000
Cash 791,606 913,539
Balances held with Central Bank of Nigeria:
Currentaccounts 4,283,533 5,158,827
Totalincludedincashandcashequivalents(Note40) 5 ,075,139 6,072,366
Mandatoryreservedeposit(see(16.2)below) 17,921,814 14,689,706
22,996,953 20,762,072
16.2 Thisrepresents12%ofcustomerdepositsand50%ofpublicsectordeposits(2012: 12%-alldeposits)ofmonthly
averagedailybalancesofdepositliabilities.MandatoryreservedepositsarenotavailableforuseintheGroup’sdaytoday
operations.
9392
17. LOANS AND ADVANCES TO BANKS
2013 2012
N’000 N’000
In Nigeria:
Currentaccounts 666,311 651,142
Securedplacements 5,501,506 -
Outside Nigeria:
Currentaccounts 103,975,840 101,978,959
PlacementswithotherCitigroupbranches - 12,146,741
Placementsheldonaccountofcustomers’obligations(Note17.1) 1,354,210 2,756,112
Totalincludedincashandcashequivalents(Note40) 111,497,867 117,532,954
Loanstobanks 10,830,444 3,744,518
Lessallowanceforimpairment(Note17.2) (70,185) (35,975)
122,258,126 121,241,497
Current 111,551,102 117,532,954
Non-current 10,707,024 3,708,543
122,258,126 121,241,49
17.1 This represents the Naira value of foreign currencies held on behalf of customers in respect of letter of credit
transactions.Thecorrespondingliabilityforthisamountisincludedincustomerdeposits(seenote28).
17.2 Themovementontheallowanceforloanstobanksduringtheyearwasasfollows:
2013 2012
N’000 N’000
Collective Collective
Allowance Allowance
At1January 35,975 33,261
Chargeagainstprofits(Note13) 34,210 2,714
At 31 December 70,185 35,975
18. LOANS AND ADVANCES TO CUSTOMERS
18.1 Theclassificationofloansandadvancesisasfollows:
N’000
Specific Collective
2013 Gross allowance for allowance for Total Carrying
Amount Impairment Impairment Impairment Amount
Loansandadvances 80,277,684 39,374 1,387,918 1,427,292 78,850,392
Advancesunderfinancelease 2,702,012 - 13,675 13,675 2,688,337
82,979,696 39,374 1,401,592 1,440,967 81,538,729
N’000
Specific Collective
2012 Gross allowance for allowance for Total Carrying
Amount Impairment Impairment Impairment Amount
Loansandadvances 62,140,845 29,020 1,091,768 1,120,788 61,020,057
Advancesunderfinancelease 148,227 - 70 70 148,157
62,289,072 29,020 1,091,838 1,120,858 61,168,214
2013 2012
N’000 N’000
Current(Gross) 63,491,639 55,822,290
Non-current(Gross) 19,488,056 6,466,782
82,979,695 62,289,072
2013 2012
N’000 N’000
Grossinvestmentinfinanceleases
nolaterthanoneyear 95,492 38,450
laterthanoneyearandnolaterthanfiveyears 2,694,133 144,780
2,789,625 183,230
Unearnedincome (87,613) (35,003)
Net investment in finance leases 2 ,702,012 148,227
Thenetinvestmentinfinanceleasesmaybeanalysedasfollows:
Expiring:
nolaterthanoneyear 10,878 3,446
laterthanoneyearandnolaterthanfiveyears 2,691,134 144,781
2,702,012 148,227
18.2 Loansandadvancestocustomersincludefinanceleasereceivables
9594
18.3 Themovementontheallowanceforloansandadvancesduringtheyearwasasfollows:
2013 2013 2013
N’000 N’000 N’000
Specific Collective Total
Movement of allowance for loans Allowance Allowance Allowance
At1January 29,020 1,091,838 1,120,858
Chargeagainstprofits(Note13) 10,355 392,489 402,844
Provisionsnolongerrequired - (82,735) (82,735)
At31December 39,374 1,401,592 1,440,967
Allowanceforloansbyclass -
Loansandadvances 39,374 1,387,918 1,427,292
Advancesunderfinancelease - 13,675 13,675
39,374 1,401,592 1,440,967
2012 2012 2012
N’000 N’000 N’000
Specific Collective Total
Movement of allowance for loans Allowance Allowance Allowance
At1January 15,536 861,934 877,470
Chargeagainstprofits(Note13) 13,484 229,904 243,388
At31December 29,020 1,091,838 1,120,858
Allowanceforloansbyclass -
Loansandadvances 29,020 1,091,768 1,120,788
Advancesunderfinancelease - 70 70
29,020 1,091,838 1,120,858
19. TRADING SECURITIES
Thesecomprise:
2013 2012
N’000 N’000
Treasurybills 8,462,237 2,532,554
FederalGovernmentofNigeriaBonds 6,004,319 8,430,327
14,466,556 10,962,881
Current 8,585,517 2,513,660
Noncurrent 5,881,039 8,449,221
14,466,556 10,962,881
Asofreportingdate,noneofthelistedtreasurybillswerepledgedtothirdpartiesundersecuredborrowingandassecurity
deposittoclearinghouseandpaymentagencies(2012:N6,426,820,000).
20. DERIVATIVE FINANCIAL INSTRUMENTS
Derivativesarefinancial instrumentsthatderivetheirvalueinresponsetochangesininterestrates,financial instrument
prices,commodityprices,foreignexchangerates,creditriskandindices.ThetypesofderivativesusedbytheGroupareset
outbelow.
All derivatives are initially recognised at fair value and subsequently measured at fair value, with all fair value changes
recognisedinthestatementofcomprehensive
Thetablebelowanalysesthenotionalprincipalamountsandthepositive(assets)andnegative(liabilities)fairvaluesofthe
Group’sderivativefinancialinstruments.Notionalprincipalamountsaretheamountsofprincipalunderlyingthecontractat
thereportingdate.
2013
Notional principal Assets Liabilities
N’000 N’000 N’000
Foreign exchange forward contracts 2,347,626 14,237 12,393
2012
Notional principal Assets Liabilities
N’000 N’000 N’000
Foreign exchange forward contracts 33,757,591 167,107 93,550
21. INVESTMENT SECURITIES
Availableforsaleinvestments:
2013 2012
N’000 N’000
Debtsecurities-atfairvalue
Unlisted 88,762,097 96,621,962
Equitysecurities-atfairvalue:
Listed 658,548 619,499
Unlisted 357,617 260,410
Total Available-for-sale investment securities 89,778,262 97,501,871
Current 34,588,199 28,075,863
Non-current 55,190,063 69,426,008
89,778,262 97,501,871
Alldebtsecuritieshavefixedcoupons.ListeddebtsecuritiesavailableforsaleatfairvalueofN4,646,152,378werepledgedto
thirdpartiesundersecuredborrowingandassecuritydeposittoclearinghouseandpaymentagencies(2012:N1,381,195,385),
andaredisclosedunderAssetspledgedascollateralinnote22.
9796
21.1 Movementininvestmentsecuritiescanbesummarisedasfollows:
2013 Debt securities - at Equity securities
fair value: at fair value: Total
N’000 N’000 N’000
At1January 96,621,962 879,909 97,501,871
Purchaseofinvestmentsecurities 53,516,111 - 53,516,111
Disposalofinvestmentsecurities (58,567,539) (17,812) (58,585,352)
Impairmentofequitysecurities - - -
Netchangeinfairvalue (910,750) 154,068 (756,683)
Netamounttransferredtoprofitorloss(Note21.2) (1,897,686) - (1,897,686)
At 31 December 88,762,098 1,016,165 89,778,262
2012 Debt securities - at Equity securities
fair value: at fair value: Total
N’000 N’000 N’000
At1January 63,248,090 768,741 64,016,831
Purchaseofinvestmentsecurities 45,828,781 - 45,828,781
Disposalofinvestmentsecurities (19,110,307) (62,537) (19,172,844)
Impairmentofequitysecurities - (11,719) (11,719)
Netchangeinfairvalue 6,701,315 185,424 6,886,739
Netamounttransferredtoprofitorloss(Note21.2) (45,917) - (45,917)
At31December 96,621,962 879,909 97,501,871
21.2 Thisrelatestoreclassificationadjustmentsforrealisednetgainsonavailable-for-salesecuritiesondisposalor
maturitythathavebeenrecognisedthroughstatementofcomprehensiveincome.
22. ASSETS PLEDGED AS COLLATERAL
2013 2013
N’000 N’000
Tradingsecurities - 6,426,820
Investmentsecurities 4,646,152 1,381,195
4,646,152 7,808,015
Therelatedliabilityforassetspledgedascollateralinclude
BankofIndustry(Note31) 1,336,995 785,714
Depositsfrombanks - 4,000,000
1,336,995 4,785,714
Current 4,646,152 7,808,015
Noncurrent - -
4,646,152 7,808,015
N1,337billionwaspledgedtoBankof Industryundersecuredborrowingarrangementswiththerelated liabilitydisclosed
above.Inaddition,N3,309,157,605(2012:N3,126,445,637),forwhichtherewasnorelatedliability,waspledgedassecurity
deposittoclearinghouseandpaymentagencies.TheGroupcannottradeonthesepledgedassetsduringtheperiodthatsuch
assetsarecommittedaspledged.
23. OTHER ASSETS
2013 2012
N’000 N’000
Prepayments 253,388 318,590
Receivables 837,687 532,102
1,091,075 850,692
Current 1,060,852 371,652
Non-current 30,223 479,040
1,091,075 850,692
24. INVESTMENTS IN ASSOCIATE
AssociatesarethoseentitiesoverwhichtheGrouphassignificantinfluencebutnotcontrol,generallyaccompanyingashare-
holdingbetween20%and50%ofthevotingrights.Inaddition,itincludesentitieswheretheshareholdingislessthan20%
butsuchsignificantinfluencecanbedemonstratedwiththeexistenceofrepresentationontheboardofdirectorsorequiv-
alentgoverningbodyofthe investee.TheGrouphasdeterminedthat its investment inAccionMicrofinanceBankLimited
shouldbetreatedasaninvestmentinassociatebasedonit’sboardrepresentationinthecompany.
Group Group Bank Bank
2013 2012 2013 2012
N’000 N’000 N’000 N’000
At1January 497,762 449,986 398,020 398,020
Shareofprofitaftertax 78,197 56,652 - -
Dividendsreceived (11,095) (8,876) - -
At 31 December 564,864 497,762 398,020 398,020
TheGrouphasaninvestment inoneAssociate,AccionMicrofinanceBankLimited,withan19.9%equityparticipationand
representationon theboardof the investee.Thishasbeenaccounted forusing theequitymethodunder theGroupand
carriedatcostintheBank’sseperatefinancialstatements.
ApartfromtheinformationdisclosedabovetherewerenoothertransactionswiththeAssociates.
SummarisedfinancialinformationoftheGroup’sassociateaccountedforusingtheequitymethodareasfollows:
2013 2013
N’000 N’000
TotalAssets 3,935,482 2,673,435
TotalLiabilities (1,902,916) (970,013)
Net Assets 2,032,566 1,703,422
Revenues 1,709,376 1,196,921
Profit 392,948 284,683
Totalcomprehensiveincome 392,948 284,683
GroupShareofProfit 78,197 56,652
Group Share of Total comprehensive income 78,197 56,652
TherewerenopublishedpricequotationsfortheassociateoftheGroup.Furthermore,therearenosignificantrestrictionson
theabilityoftheassociatetotransferfundstotheGroupintheformofcashdividends,orrepaymentofloansoradvances.
9998
25. PROPERTY, PLANT AND EQUIPMENT
Themovementontheseaccountsduringtheyearwasasfollows:
Computer
Leasehold Equipment, Work in Total
improvements Furniture & Motor Progress
Year ended 31 December 2013 Land and buildings Equipment Vehicles (WIP)
N’000 N’000 N’000 N’000 N’000 N’000
COST
At1January 596,385 1,416,429 3,398,697 734,924 8,483 6,154,918
Additions - - 202,979 146,175 33,525 382,679
Disposals - - (292,897) (199,142) - (492,039)
At31December 596,385 1,416,429 3,308,779 681,957 42,008 6,045,558
ACCUMULATED DEPRECIATION
At1January - 152,750 2,974,027 409,436 - 3,536,213
Chargefortheyear - 39,010 158,782 147,835 - 345,628
Disposals - - (279,996) (163,220) - (443,216)
At31December - 191,760 2,852,813 394,051 - 3,438,625
NET BOOK VALUE
At 31 December 596,385 1,224,668 455,966 287,905 42,008 2,606,933
Computer
Leasehold Equipment, Work in Total
improvements Furniture & Motor Progress
Year ended 31 December 2012 Land and buildings Equipment Vehicles (WIP)
N’000 N’000 N’000 N’000 N’000 N’000
COST
At1January 596,385 1,314,697 3,160,684 728,914 106,199 5,906,879
Additions - 19,919 275,449 220,372 7,080 522,820
Disposals - - (60,419) (214,362) - (274,781)
TransferstofixedassetsfromWIP - 81,813 22,983 - (104,796) -
At31December 596,385 1,416,429 3,398,697 734,924 8,483 6,154,918
ACCUMULATED DEPRECIATION
At1January - 121,158 2,552,072 406,162 - 3,079,392
Chargefortheyear - 31,592 466,237 178,879 - 676,708
Disposals - - (44,282) (175,605) - (219,886)
At31December - 152,750 2,974,028 409,436 - 3,536,213
NET BOOK VALUE
At 31 December 596,385 1,263,679 424,670 325,488 8,483 2,618,705
26. INTANGIBLE ASSETS
ComprisesofPurchasedsoftware:
2013 2012
N’000 N’000
Cost:
At1January 24,568 24,568
Additions - -
Disposals - -
24,568 24,568
Amortization:
At1January 17,060 8,871
Chargefortheyear 7,507 8,189
Disposals - -
24,567 17,060
December 31 Net value - 7,508
27. DEPOSITS FROM BANKS
2013 2012
N’000 N’000
Currentaccounts 1,263,243 439,007
Termdeposits - 10,001,120
1,263,243 10,440,127
Current 1,263,243 10,440,127
Non-current - -
1,263,243 10,440,127
Depositfrombanksonlyincludefinancialinstrumentsclassifedasliabilitiesatamortisedcost.
Depositsfrombankshavefixedorvariableinterestrates.
101100
28. DEPOSITS FROM CUSTOMERS
Depositsandotheraccountscomprise:
Group Group Bank Bank
2013 2012 2013 2012
N’000 N’000 N’000 N’000
Demand 247,540,961 226,502,666 247,542,186 226,503,664
Term 29,360,234 23,655,344 29,360,234 23,655,344
276,901,195 250,158,010 276,902,420 250,159,008
Current 276,901,195 250,158,010 276,902,420 250,159,008
Non-current - - - -
276,901,195 250,158,010 276,902,420 250,159,008
Depositfromcustomersonlyincludefinancialinstrumentsclassifedasliabilitiesatamortisedcost.
28.1 IncludedinthisbalanceistheNairavalueofforeigncurrenciesamountingtoN1,354,209,844(2012:N2,756,112,000)
heldonbehalfofcustomersascashcollateralinrespectofletterofcredittransactions.
28.2 IncludedindepositsfromcustomersisanamountofN136,338,876,764(2012:N132,240,563,085)offixedorvariable
interestrateandallotherdepositsarenon-interestbearingdeposits.
29. RETIREMENT BENEFIT OBLIGATION
Themovementonretirementbenefitobligationaccountduringtheyearwasasfollows:
2013 2012
N’000 N’000
At1January 13,054 10,894
Employeecontribution 173,413 183,055
Chargetoprofitandloss(Note11) 172,406 171,059
Remittancesduringtheyear (350,810) (351,954)
At 31 December 8,063 13,054
TheGroupanditsemployeesmakeajointcontributionof15%(7.5%each)ofbasicsalary,housingandtransportallowance
toeachemployee’sretirementsavingsaccountmaintainedwiththeirrespectivenominatedPensionFundAdministratorsin
compliancewiththePensionReformActof2004.
30. CURRENT INCOME TAX LIABILITIES
ThemovementinIncometaxpayableduringtheyearisasfollows:
Group Group Bank Bank
2013 2012 2013 2012
N’000 N’000 N’000 N’000
At1January 3,551,266 2,497,527 3,551,191 2,497,527
Paymentsduringtheyear (3,423,668) (2,586,750) (3,423,644) (2,586,750)
Currentyeartaxcharge(Note14.1) 3,613,250 3,640,489 3,613,170 3,640,414
At 31 December 3,740,849 3,551,266 3,740,717 3,551,191
31. OTHER BORROWED FUNDS
2013 2012
N’000 N’000
BankofIndustry(Note31.1) 700,000 785,714
CentralBankofNigeria(CACS)(Note31.2) - 1,500,000
700,000 2,285,714
Current 700,000 2,285,714
Non-current - -
700,000 2,285,714
31.1 On-lending liabilityfromBankof Industry(BOI)forwhichamanagementfeeof 1%ischargedand issecuredwith
NigerianTreasurybillswithfacevaluenotlessthan100%ofthefacilityandisrepayablequarterlyexpiringinMarch2014.
31.2 On-lendingliabilityfromCentralBankofNigeriaundertheCommercialAgriculturalCreditScheme(CACS)wasrepaid
inSeptember2013.
32. OTHER LIABILITIES
Otherliabilitiescomprise:
Group Group Bank Bank
2013 2012 2013 2012
N’000 N’000 N’000 N’000
Unearnedincome 282,010 240,411 282,010 240,411
Managers’cheques 3,318,749 3,268,226 3,318,749 3,268,226
Payables 1,386,980 675,811 1,386,980 675,811
Sundryaccounts 708,755 392,096 708,755 392,096
Financial liabilities 5,696,494 4,576,544 5,696,494 4,576,544
Accruals 1,510,434 1,405,439 1,510,690 1,405,697
Bankingsectorresolutioncost - 776,737 - 776,737
Technologylevy 169,586 172,079 169,586 172,079
Non financial liabilities 1,680,020 2,354,255 1,680,276 2,354,513
7,376,514 6,930,799 7,376,770 6,931,057
Current 5,084,723 4,937,722 5,084,979 4,937,980
Non-current 2,291,791 1,993,077 2,291,791 1,993,077
7,376,514 6,930,799 7,376,770 6,931,057
103102
33. PROVISIONS
Provisionscomprise:
2013 2012
N’000 N’000
At1January 58,488 58,488
At 31 December 58,488 58,488
Current - -
Non-current 58,488 58,488
58,488 58,488
TheamountrepresenttheaggregateprovisionsforcertainlegalclaimsbroughtagainsttheGroup,inwhichitisprobablethat
therewouldbefutureoutflowofeconomicbenefitstosettlesuchlegalobligationsandwhosevaluescanbereliablyestimated
asat31December2013.Theprovisionchargeisrecognisedinthestatementofprofitorlosswithinotheroperatingexpenses.
Thebalanceasat31December2013representsareasonableestimateofwhatwouldberequiredtosettlethelegalclaims
eventhoughsomeofthemattersarestillinprogressasatreportingdate
34. DEFERRED TAXATION
Movementondeferredtaxaccountduringtheyearwasasfollows:
2013
At 1 January Recognized in Recognized in At 31 December
Deffered tax asset/(liability) 2013 income statement equity 2013
N’000 N’000 N’000 N’000
Propertyandequipment (403,453) (165,539) - (568,992)
Loanimpairmentreserve (58,352) 511,697 - 453,345
Fairvaluereserve (321,119) - 796,311 475,192
(782,924) 346,158 796,311 359,545
2012
At 1 January Recognized in Recognized in At 31 December
Deffered tax asset/(liability) 2012 income statement equity 2012
N’000 N’000 N’000 N’000
Propertyandequipment (493,475) 90,022 - (403,453)
Loanimpairmentreserve 266,046 (324,398) - (58,352)
Fairvaluereserve 1,731,128 - (2,052,247) (321,119)
1,503,699 (234,376) (2,052,247) (782,924)
RecognitionofdeferredtaxassetsofN359,545,000(2012:Nil)isbasedonmanagement’sprofitforecasts(whicharebased
onavailableevidence,includinghistoricallevelsofprofitability),whichindicatesthatitisprobablethattheGroup’sentitywill
havefuturetaxableprofitsagainstwhichtheseassetscanbeutilised.
IAS12statesthatthedeferredtaxassetsandliabilitiesshouldbemeasuredatthetaxratesthatareexpectedtoapplytothe
periodwhentheassetisrealizedortheliabilitysettledbasedontaxratesthathavebeenenactedorsubstantivelyenacted
bythebalancesheetdate.
35. SHARE CAPITAL
Sharecapitalcomprises:
2013 2012
N’000 N’000
Authorised:
3.0billionOrdinarysharesofN1.00each 3,000,000 3,000,000
Issued and fully paid
2.794billionOrdinarysharesofN1.00each 2,793,777 2,793,777
Otherreservesinclude:
35.1 Share premium
Premiumsfromtheissueofsharesarereportedinthesharepremium.
35.2 Treasury shares reserve
Treasurysharesreserveholds60,416,666unitsoftheBank’sshareswhichwereputasideforemployeesandheldintrustby
thestaffparticipationscheme(31December2012:60,416,666).
35.3 Statutory reserve
Statutoryreservesincludei)themandatoryannualappropriationasrequiredbytheBanksandOtherFinancialInstitution
ActofNigeriaandii)theSmallandMediumScaleIndustriesReserve(SMEEIS)reservemaintainedtocomplywiththeCentral
BankofNigeriarequirement.
35.4 Fair value reserve
Thefairvaluereserveincludesthenetcumulativechangeinthefairvalueofavailable-for-saleinvestmentsecuritiesuntilthe
investmentisderecognisedorimpaired.
Themovementonfairvaluereserveaccountduringtheyearwasasfollows:
2013 2012
N’000 N’000
At1January 749,278 (4,039,297)
Netchangeinfairvalueofavailable-for-salesecurities(Note21.1) (756,683) 6,886,739
Reclassificationadjustmentsforrealisednetgainsonavailable-for-
salesecurities(Note21.1) (1,897,686) (45,917)
Nettaxchargeonfairvaluechanges(Note14.3) 796,311 (2,052,247)
At 31 December (1,108,780) 749,278
105104
35.5 Regulatory risk reserve
Theregulatoryriskreservewouldbereflectedwheretheimpairmentlossesrequiredbyprudentialregulationsexceedthose
computedunderIFRS.Suchexcessisrecognisedasastatutorycreditreserveandisaccountedforasanappropriationof
retainedearnings.
StatementofPrudentialadjustments
2013 2012
N’000 N’000
IFRSimpairmentlosses
-Loansandadvancestobanks(Note17) 70,185 35,975
-Loansandadvancestocustomers(Note18) 1,440,967 1,120,858
Total 1,511,152 1,156,833
Loananalysisbyperformance
Performing:
-GrossLoansandadvancestobanks(Note17) 10,830,444 3,744,518
-GrossLoansandadvancestocustomers(Note18) 82,940,321 62,260,052
Non-performing:
-Grossnonperformingloansandadvancestocustomers(Note18) 39,374 29,020
93,810,140 66,033,590
PrudentialProvisions
-Specific 39,374 29,020
-General 937,708 660,045
Total 977,082 689,065
Surplus/(deficit) of IFRS provisions over prudential provisions 534,070 467,768
As IFRS provisions are greater than Prudential provisions therefore no transfer was required to the non-distributable
statutorycreditreserve.
36. CONTINGENT LIABILITIES AND COMMITMENTS
36.1 Litigations and claims
Therewere31 litigationsandclaimsagainst theGroupasat31December2013.These litigationsandclaimsarose in the
normalcourseofbusinessandarebeingcontestedbytheGroup.Thedirectors,havingsoughtprofessionallegalcounsel,
areoftheopinionthatnosignificantliabilitywillcrystallizefromtheselitigationsandthereforenoprovisionsaredeemed
necessarytobemadeinthefinancialstatements.
2013 2013
N’000 N’000
Acceptances 1,171,373 2,095,311
Lettersofcredit 12,411,940 13,208,077
Bondsandguarantees 30,252,402 36,394,389
Loancommitments 12,353,883 10,580,142
56,189,598 62,277,919
CertainbondsandguaranteesarecashcollateralizedandsecuredwithatotalsumofN94,192,244(2012:N716,597,937).
36.3 Capital commitments
Thegrouphasacapitalcommitmentasat31December:
2013 2012
N’000 N’000
NotLaterthan1year 16,350 -
Laterthan1yearbutnotlaterthan5years - -
16,350 -
37. RELATED PARTY TRANSACTIONS
Partiesareconsideredtoberelatedifonepartyhastheabilitytocontroltheotherpartyorexercisesignificantinfluenceover
theotherpartyinmakingfinancialandoperationaldecisions,oranotherpartycontrolsbothentities.TheGroupdefinitionof
relatedpartiesincludessubsidiary,associatesandkeymanagementpersonnel.
Transactionswithkeymanagementpersonnel
The Group’s key management personnel, and persons connected with them, are also considered to be related parties.
Thedefinitionofkeymanagement includes theclosemembersof familyofkeypersonnelandanyentityoverwhichkey
management exercise control. The key management personnel have been identified as the executive and non-executive
directorsoftheGroup.Closemembersoffamilyarethosefamilymemberswhomaybeexpectedtoinfluence,orbeinfluenced
bythatindividualintheirdealingswithGroup.
37.1 Parent and ultimate controlling party
81.9%oftheBank’ssharecapitalisheldbyCitibankOverseasInvestmentCorporation.TheultimateparentoftheGroupis
CitigroupInc.whichisincorporatedintheUnitedStatesofAmerica.Inthenormalcourseofthebank’sbusiness,theGroup
entersintobusinesstransactionswithotherCitigroupoffices.
BalanceswithotherCitigroupofficesasat31December
2013 2012
N’000 N’000
Assets
LoansandadvancestoBanks 105,114,389 116,881,738
Loansandadvancestocustomers - 8
Derivativefinancialinstruments 10,040 29,162
105,124,429 116,910,908
Liabilities
Depositsfrombanks 1,112,167 348,466
DepositsfromCustomers 8,276,943 2,489,493
Derivativefinancialinstruments 2,677 13,189
9,391,787 2,851,148
IncomeandexpensesfromotherCitigroupofficesduringtheyear
Interestandsimilarincome 247,113 139,974
Interestandsimilarexpense (213,285) (64,849)
Netinterestincome 33,828 75,125
Feeandcommissionincome 537,702 26,015
571,530 101,140
107106
37.2 KeymanagementpersonnelandtheirimmediaterelativesengagedinthefollowingtransactionswiththeGroupasat
31December2013
2013 2012
N’000 N’000
Loans and advances 7,143 3,328
Deposits 62,714 54,261
Loans and advances granted to key management personnnel are loans extended to employees under the employment
schemeofservice.Noimpairmentlosseshavebeenrecordedagainstbalancesoutstandingattheendoftheperiod.
Therewerenoothertransactionsinwhichadirectorhadaninterestasatreportingdatein2013.
KeymanagementpersonnelcompensationfortheperiodisdisclosedunderNote38.2.
37.3 TransactionsbetweenCitibankNigeriaLimitedanditssubsidiaryalsomeetthedefinitionofrelatedpartytransactions.
Thesetransactionsareeliminatedonconsolidation,andarenotdisclosedintheconsolidatedfinancialstatements.
Depositsoutstandingasat31December
Name of company Relationship Type of deposit 2013 2012
N’000 N’000
NigeriaInternationalBankNomineesLimited Subsidiary Deposit 1,225 998
1,225 998
TheinvestmentinassociateisdisclosedunderNote24.
38. EMPLOYEES AND DIRECTORS
38.1 Employees:
Thenumberofpersonsemployedasattheendoftheyearisasfollows:
2013 2012
ExecutiveDirectors 4 4
Management 195 195
Non-management 44 45
243 244
Costofemployees,excludingexecutivedirectors,duringtheyearisasfollows:
Name of company Group Group Bank Bank
2013 2012 2013 2012
N’000 N’000 N’000 N’000
Wagesandsalaries 4,084,822 3,985,796 4,084,822 3,985,796
Pensioncosts 172,406 171,059 172,406 171,059
4,257,228 4,156,855 4,257,228 4,156,855
Otherindirectemployeecosts 1,077,636 999,412 838,990 821,182
Totalpersonnelexpenses(Note11) 5,334,864 5,156,267 5,096,218 4,978,037
ExecutiveCompensation (161,100) (190,002) (161,100) (190,002)
5,173,764 4,966,265 4,935,118 4,788,035
The number of persons employed by the Group, who received emoluments in the following ranges (excluding pension
contribution),were:
2013 2012
N2,000,001 - N3,000,000 4 10
N3,000,001 - N4,000,000 17 20
N4,000,001 - N5,000,000 14 7
N5,000,001 - N6,000,000 13 13
N6,000,001 - N7,000,000 8 18
AboveN7,000,000 186 176
243 244
38.2 Directors
Directors’remunerationwaspaidasfollows:
2013 2012
N’000 N’000
Feesandsittingallowances(Note12) 51,750 37,400
Executivecompensation(Note11) 161,100 190,00
212,850 227,402
Thedirectors’remunerationshownaboveincludes:
2013 2012
N’000 N’000
Chairman 11,500 8,400
Highestpaiddirector 55,000 39,250
Thenumberofotherdirectorswhoreceivedfeesandotheremoluments(excludingpensioncontributions)inthefollowing
rangeswere:
2013 2012
Number Number
AboveN2,000,000 10 9
Oneforeigndirectorandonelocalnon-executivedirectordidnotreceiveanyfeesorotheremoluments.
109108
39. DIVIDEND
The dividend paid in 2013 and 2012 were N11,035,420,055 (N3.95k per share) and N8,241,642,826 (N2.95k per share)
respectively.Adividendinrespectoftheyearended31December2013ofN4.20kpershare,amountingtoatotaldividend
ofN11,733,864,362, is tobeproposedatthenextannualgeneralmeeting.Thesefinancialstatementsdonotreflectthis
dividendpayable.
40. CASH AND CASH EQUIVALENTS
Forthepurposesofthecashflowstatement,cashandcashequivalentsincludecashandnonrestrictedbalanceswiththe
CentralBankofNigeria,treasurybillsandothereligiblebills,operatingaccountbalanceswithotherbanks,amountduefrom
otherbanks:
2013 2012
N’000 N’000
CashandbalanceswithCentralBankofNigeria(Note16.1) 5,075,139 6,072,366
Tradingsecurities-Treasurybills 1,966,822 1,747,822
Loansandadvancestobanks(Note17) 111,497,867 117,532,954
118,539,828 125,353,142
41. GROUP ENTITIES
41.1 Investments in subsidiaries comprises:
2013 2012
N’000 N’000
NigeriaInternationalBankNomineesLimited 1,000 1,000
TherewasnomovementintheBank’sinvestmentinthesharecapitalofitsfullyownedsubsidiaryduringtheyear.
41.2 InvestmentinAssociatescomprisesofAccionMicrofinanceBankasdisclosedinNote24.
41.3 TreasurysharescomprisesofthestaffparticipationschemeasdisclosedinNote35.2.
41.4 Condensedresultsoftheconsolidatedentitiesareasfollows:
31 December 2013 Bank NIB Accion Staff Elimination Group
In N’000 Nominees Microfinance participation Entities
Scheme
OperatingIncome 28,584,549 2,731 (11,095) - (2,731) 28,573,454
OperatingExpenses (11,503,032) (2,482) - (238,646) 2,731 (11,741,429)
17,081,517 249 (11,095) (238,646) - 16,832,025
Shareofprofitofassociates
accountedforusingequitymethod - - 78,197 - - 78,197
Profitbeforetax 17,081,517 249 67,102 (238,646) - 16,910,222
Tax (3,267,012) (80) - - - (3,267,092)
Profit after tax 13,814,505 169 67,102 (238,646) - 13,643,130
TotalAssets 340,155,588 3,955 166,844 60,417 (65,372) 340,321,432
Liabilities 290,062,094 2,606 - - (3,955) 290,060,745
NetAssets 50,093,494 1,349 166,844 60,417 (61,417) 50,260,687
Equity 50,093,494 1,349 166,844 60,417 (61,417) 50,260,687
31 December 2012 Bank NIB Accion Staff Elimination Group
In N’000 Nominees Microfinance participation Entities
Scheme
OperatingIncome 28,166,188 2,587 (8,876) - (2,587) 28,157,313
OperatingExpenses (11,136,712) (2,352) - (178,229) 2,587 (11,314,706)
17,029,476 235 (8,876) (178,229) - 16,842,606
Shareofprofitofassociates
accountedforusingequitymethod - - 56,652 - - 56,652
Profitbeforetax 17,029,476 235 47,776 (178,229) - 16,899,258
Tax (3,874,791) (75) - - - (3,874,867)
Profit after tax 13,154,685 160 47,776 (178,229) - 13,024,392
TotalAssets 323,487,582 3,585 99,742 60,417 (65,002) 323,586,324
Liabilities 274,315,112 2,404 - - (3,585) 274,313,932
NetAssets 49,172,470 1,180 99,742 60,417 (61,417) 49,272,392
Equity 49,172,470 1,180 99,742 60,417 (61,417) 49,272,392
111110
42. COMPLIANCE WITH BANKING REGULATIONS
TheBankdidnotcontraveneanyprovisionsoftheBanksandOtherFinancialInstitutionsAct(BOFIA).TheBankcontravened
theprovisionsofCentralBankofNigeriacircularrefFPR/DIR/CIR/GEN/01/016andwasfinedatotalsumofN372,000,000for
failingtoseekpriorCBNapprovalforthehireandpromotionofstaffofAssistantGeneralManagerlevelandabove.
43. POST BALANCE SHEET EVENTS
TherewerenopostreportingdateeventswhichcouldhaveamaterialeffectonthefinancialpositionoftheGroupandBank
asat31December2013ortheprofitfortheyearendedonthatdatethathavenotbeenadequatelyprovidedforordisclosed.
Group Bank
2013 2012 2013 2012
N’000 % N’000 % N’000 % N’000 %
GrossOperating
income 33,381,749 34,344,841 33,392,845 34,353,717
Interestexpense
-Foreign (67,342) (64,849) (67,342) (64,849)
-Local (4,740,954) (6,122,680) (4,743,447) (6,122,680
28,573,453 28,157,312 28,582,056 28,166,188
Netcreditlosses (436,536) (241,971) (436,536) (241,971)
Adminstrative
overheads (5,616,893) (5,231,571) (5,617,142) (5,231,807)
Shareofprofitof
associatesaccountedfor
usingequitymethod 78,197 56,652 - -
22,598,221 100% 22,740,422 100% 22,528,378 100% 22,692,411 100%
Distribution:
Employees
-Salariesandbenefits 5,334,864 24% 5,156,267 23% 5,096,218 23% 4,978,037 22%
Government
-Taxation 3,267,092 14% 3,874,866 17% 3,267,012 14% 3,874,791 17%
Future
-Assetreplacement
(depreciation) 353,135 2% 684,897 3% 353,135 2% 684,897 3%
-Expansion
(transfertoequity) 13,643,130 60% 13,024,392 57% 13,814,505 61% 13,154,684 58%
22,598,221 100% 22,740,422 100% 22,530,870 100% 22,692,410 100%
UNAUDITED STATEMENT OF VALUE ADDEDFOR THE YEAR ENDED 31 DECEMBER 2013
IFRS IFRS IFRS NGAAP NGAAP
2013 2012 2011 2010 2009
N’000 N’000 N’000 N’000 N’000
ASSETS
Cashandbalanceswith
CentralBankofNigeria 22,996,953 20,762,072 13,420,668 2,983,740 24,539,219
Loansandadvancestobanks 122,258,126 121,241,497 215,295,404 - -
Loansandadvancestocustomers 81,538,729 61,168,214 55,422,672 43,833,016 44,856,319
Tradingsecurities 14,466,556 10,962,881 7,226,690 - -
Derivativefinancialinstruments 14,237 167,107 383,387 - -
Investmentsecurities 89,778,262 97,501,871 64,016,831 55,654,073 18,022,956
Assetspledgedascollateral 4,646,152 7,808,015 6,231,282 - -
Otherassets 1,091,075 850,692 342,820 4,939,766 854,044
Investmentsinassociates 564,864 497,762 449,986 - -
Property,plantandequipment 2,606,933 2,618,705 2,827,488 3,106,370 3,138,001
IntangibleAssets - 7,508 15,697 - -
Deferredtaxasset 359,545 - 1,503,699 - -
Treasurybillsandothereligiblebills - - - 3,012,113 5,894,955
Duefromotherbanks - - - 144,998,390 84,493,142
On-lendingfacilities - - - 322,500 -
Advancesunderfinanceleases - - - 62,376 67,761
Total assets 340,321,432 323,586,324 367,136,624 258,912,344 181,866,397
LIABILITIES
Depositsfrombanks 1,263,243 10,440,127 248,008 - -
Depositsfromcustomers 276,901,195 250,158,010 315,733,569 206,134,576 125,113,021
Derivativefinancialinstruments 12,393 93,550 248,926 - -
Retirementbenefitobligations 8,063 13,054 10,894 37,592 45,384
Currentincometaxliabilities 3,740,849 3,551,266 2,497,527 2,525,410 3,600,987
Otherborrowedfunds 700,000 2,285,714 2,486,000 - -
Otherliabilities 7,376,514 6,930,799 6,330,374 7,208,701 10,234,124
Provisions 58,488 58,488 58,488 8,488 10,734
Deferredincometaxliability - 782,923.62 - 537,740 400,406
Totalequity 50,260,687 49,272,392 39,522,838 41,737,733 42,461,727
Duetootherbanks - - - 3 78,104 14
On-lendingliabilities - - - 344,000 -
Total equity and liabilities 340,321,432 323,586,324 367,136,624 258,912,344 181,866,397
Creditcommitmentsandother
financialfacilties 56,189,598 62,277,919 54,837,495 53,150,071 59,949,539
CONSOLIDATED UNAUDITED FIVE YEAR FINANCIAL SUMMARYFOR THE YEAR ENDED 31 DECEMBER 2013
113112
Netoperatingincome 28,573,453 28,157,312 21,547,410 18,496,841 23,105,344
Operatingexpenses (11,304,892) (11,072,735) (9,588,588) (7,872,421) (7,454,962)
Netcreditlosses (436,536) (241,971) 375,477.77 - -
Write-back/(allowance)
onriskassets - - - 1,103,881 18,890
Shareofprofitofassociates
accountedforusingequitymethod 78,197 56,652 42,063.23 - -
Profitbeforetax 16,910,222 16,899,258 11,625,408 11,728,301 15,669,272
Incometaxexpense (3,267,092) (3,874,866) (2,243,804) (2,674,075) (3,778,797)
Profitfortheyear 13,643,130 13,024,392 9,381,604 9,054,226 11,890,475
Othercomprehensiveincomefor
theyear,netoftax (1,858,058) 4,788,575 2,025,917.27 - -
Totalcomprehensiveincome
attributabletoshareholders 11,785,072 17,812,967 7,355,686.71 - -
Earningspershare 495k 476k 343k 324k 426k
Declareddividendpershare 395k 295k 275k 350k 255k
NumberofordinarysharesofN1.00 2,793,777 2,793,777 2,793,777 2,793,777 2,793,777
IFRS IFRS IFRS NGAAP NGAAP
2013 2012 2011 2010 2009
N’000 N’000 N’000 N’000 N’000
STATEMENT OF COMPREHENSIVE INCOME
2013 IN PICTURES