BoI recovers N2.9b from debtors as non-performing loans dip to 4.09%
Following an aggressive loan recovery exercise, a re-engineering of its processes as well as a review of its risk management framework, the Bank of Industry’s (BoI) non-performing loan portfolio has dropped to 4.09 per cent.
Specifically, the bank’s loan recovery effort has seen it recovering over N2.9 billion within a period of 15 months, representing January 2014 till March 31, 2015 from defaulters.
According to bank, the present state of its non-performing loans shows a positive outlook, compared to 12.98 per cent recorded at the end of December, 2013.
In a chat with the Guardian in Lagos, on Tuesday, the Chief Risk Officer of the bank, Dr. Ezekiel Oseni explained that the bank was able to achieve the feat following a review of its processes and risk framework.
He added that the bank’s induction of some manufacturers in its hall of fame, a scheme introduced to honour some of its customers who have shown excellent performance by repaying the loans granted to them conformably as well as the blacklisting of some 24 companies found to be involved in fraudulent practices aided the recovery process.
He explained that since the introduction of the hall of fame, the bank recovered N1.3 billion in the last quarter of 2014, while N403 million was recovered between January to March, 31, 2015.
With a target of three per cent as the maximum level of its non-performing loans by the end of 2016 in line with global best practices, Oseni explained that the bank is restrategising to further ensure that its operations aid the developmental agenda of industrialising the country.
“The Bank of Industry remains the only development finance institution to be rated by any rating agency. We have opened our books to regulators in order to assess our services so as to serve customers better. We have re-engineered our credit approval process such that it is easy to access loans within five days of submitting applications.
“Similarly, risk mitigation measures have been applied to our processes while human interference has been reduced through the automation process. Our target is to recover N600 million every quarter and a minimum of N2.4 billion yearly. We hope to reduce our non-performing loans to the barest minimum”, he added.
The Bank’s Managing Director, Rasheed Olaoluwa, while reacting to the bank’s domestic credit rating of A- from Agusto & Co said: “the positive rating is an endorsement of our ongoing transformation project at BOI, and an affirmation of our strategic intent of adopting global best practices in all aspects of our operations.”
He added: “we are determined to make increasing impact in our focus sectors and to continue to set the pace as Nigeria’s leading development bank.
It could be recalled that the Bank had in 2014 commenced the implementation of a corporate transformation project leading to the development of a Five-Year Strategic Plan which is currently being implemented.