From 2017 to date, the Bank of Industry (BOI) has raised over $5 billion from international financial markets to support micro, small and medium-sized enterprises (MSMEs) and the industrial sector of the national economy, according to LEADERSHIP.
Under its current management led by the Managing Director/CEO, Mr. Kayode Pitan, the Bank completed six major capital raising transactions in the international financial markets between 2017 and now, thereby strengthening the Bank’s financial power to lend to MSMEs. The beneficiary companies have the BOI loans used to expand their businesses, create jobs, create wealth and reduce poverty.
The bank announced the first of the deals was a $750 million syndication completed in 2017 (now fully disbursed) with the backing of Afreximbank and a team of international FIs.
The second and third were the €1 billion syndication, which closed in March 2020, and another $1 billion syndication, which closed in December 2020 (full repayment by December 2023).
The bank’s first €750 million Eurobond, completed in February 2022, was the fourth transaction. This transaction was the first of its kind for the Bank, Nigeria and Africa in several respects as this transaction was the Bank’s first Eurobond transaction and the first Euro-denominated Eurobond transaction in Nigeria.
The transaction was also the first Eurobond transaction to be backed by Nigeria’s government guarantee and therefore sets a benchmark for other prospective issuers from the African continent, even as it won the bank the Agency Bond Deal of the Year award Awards Event 2023 brought in Bonds, Credit and ESG Capital Markets in Cape Town, South Africa.
The fifth capital raising transaction was the €1 billion guaranteed senior loan facility completed in August 2022. Through this transaction, the Bank raised liquidity at affordable interest rates and diversified its funding sources, attracting new lenders at a time when international capital markets were prohibitively expensive and unaffordable many borrowers were closed.
Also, in August 2022, a credit line of 100 million euros was signed by the French Development Agency (AFD), representing the 6th capital raising. This credit facility allows the bank to expand its financing interventions for green projects, while the deal also included a €2.5 million grant to support capacity building for employees and customers.
In terms of development impact, BOI said it disbursed N210.7 billion to 418,436 beneficiaries in 2022 through its direct and indirect lending platforms and through funds it manages on behalf of its strategic partners, adding:
His intervention programs, which cut across multiple sectors and segments of Nigeria’s economy, not only contributed significantly to his national goals of economic recovery and the creation of millions of jobs, but also empowered Nigerian companies, particularly micro, small and medium-sized enterprises, to do business to maintain sustainable.
BOI also announced that it has disbursed over N418 billion to 41,654 food and agricultural processing beneficiaries and produced approximately 88,700 tonnes of rice and corn.
Since 2016, the bank said Kayode Pitan’s leadership has shown commitment and innovation that have enhanced the bank’s fortunes, noting that the bank’s total assets grew an impressive 248% between 2016 and 2022, ending 1, Reached N71 trillion by 2021 and closed at N2.38 trillion as of December 2022.
“BOI has also increased its equity position by 95 percent since 2016 – from N220 billion to N430 billion (US$935 million) in December 2022, exceeding the regulatory requirement of N10 billion (US$26 million) for development finance institutions (DFIs) for the retail trade.
“Profit before tax (PBT) increased by 325 percent from N17 billion to N72 billion between 2016 and 2022. The bank has increased by paying about N28.9 billion in dividends and £30 in taxes N.4 billion contributed to the national budget. In general, the bank typically pays out 15% of its net income as a dividend. With over 85 percent of loans secured by a guarantee and with aggressive recovery efforts, the bank has historically been able to maintain a non-performing loan (NPL) ratio below the regulatory five percent threshold,” the bank said .
Similarly, gross income increased 15.4 percent to N212.96 billion in 2022 from N184.55 billion in 2021. Likewise, interest income increased 21.1 percent to N212.96 billion in 2022 from 175 N.83 billion a year of this growth was accounted for in the previous year as revenue from both customer loans and investments.
Pre-tax profit improved 15.6 per cent to N71.99 billion for the year from N62.28 billion in 2021, with notable growth in interest income and other income lines alongside the reduction in allowances enabling this noticeable growth.
Total equity grew 11.7 percent to N429.83 billion from N384.85 billion in 2021, while loans and advances grew 3.2 percent to N805.46 billion from N780.48 billion in 2021 N improved.
In response, its President/CEO, Mr. Kayode Pitan, attributed these and other achievements to the combined efforts of the board, management and employees, his predecessors, his partner banks offering credit enhancements, and the unwavering support of its owners (the Federal Ministry of Finance Incorporated and the Central Bank of Nigeria), the Federal Department of Finance, Budget and National Planning and its Oversight Department, the Federal Department of Industry, Trade and Investment, with whom it enjoys a harmonious relationship.
He added that the bank’s high hopes of building on its past achievements and resilience were tested in a global economic storm with strong headwinds as the national economy contracted 1.8% in 2020, its deepest contraction since 1983 , the COVID-19 crisis fueled the economic slowdown; Capital outflows characterized the external context, heightened risk aversion, low oil prices and contracting cross-border remittances.
With economic activity grounded by COVID-19 and many businesses struggling to survive, Bank of Industry, as a development finance institution serving thousands of MSMEs as well as large corporations, came under additional pressure to also provide its support to numerous customers to survive .
But the story of 2022, told by the bank’s financial results and other accomplishments, shows notable achievements of its board and management, which also underlined its resilience, he stressed.
Regarding infrastructure development, he said the bank is continuously improving its internal processes for management efficiency, noting that the number of BOI State Offices/branches nationwide has increased from 21 in 2016 to 31 in 2022 and that over the past year have completed the construction of BOI Tower 2 in Abuja, a thirteen-story eco-friendly office complex with a six-story parking garage structure to provide its employees with a modern and efficient workspace to better serve customers.
However, market observers believe that the key to BOI’s long list of accomplishments is the company’s robust industrial harmony, which Pitan describes as a dedicated and peaceful man, traits that are hallmarks of his leadership style.
But Pitan also commends the bank’s CEO, Alhaji Aliyu Abdulrahman Dikko, for the growth-enabling climate at the bank, describing him as “a calm and experienced team player who always strives to improve and serve the country.”
He stressed that the bank also implements some government programs, listing the Government Enterprise Empowerment Program (GEEP) and the N-Power Social Investment Programs, under which BOI reported disbursements of N68 billion ($188.5 million). 2.9 million beneficiaries enabled.
The bank, he noted, has also disbursed N569.3 million ($1.6 million) to 56,934 beneficiaries under the North-East Rehabilitation Fund (NERF), a BOI fund that covers the economies of the 6 of them Affected states in north-east Nigeria aim to rejuvenate negative impacts of the insurgency over the years.
“Under the MSME Survival Fund Scheme (part of the Nigerian Economic Sustainability Plan), BOI facilitated N75 billion MSME Survival Fund disbursement. To date, N66 billion (US$156 million) has been distributed under the scheme to 1,258 .188 beneficiaries paid out.
“Similarly, over N22.3 billion was disbursed to 1,309 SME beneficiaries under the NEPC Export Expansion Facility; over US$300 million disbursed to local actors in the oil and gas sector under the Nigeria Content Intervention Fund without default, while BOI is the executive agency for the FGN/Islamic Development Bank BRAVE program which aims to to improve the economic opportunities of women entrepreneurs, especially in times of conflict and social unrest,” the bank stressed.
In the past six years, under its current leadership, the Bank of Industry has received over 20 awards and recognitions, including 12 in 2022, for outstanding achievement and commitment to promoting economic growth in Nigeria.
Comments are closed.