LAPO Microfinance Bank posts 17% rise in PAT

• Disburses N113.70b loans to SMEs in 2015
• Links performance to deposit increase, cost reduction

Amid harsh operating environment, LAPO Micro finance Bank has posted a Profit After Tax (PAT) of N3.29 billion in its 2015 operations, against N2.80 billion achieved in the corresponding period in 2014.

The micro finance bank’s profit before tax also rose from N4.14 billion to N4.86 billion in 2015.According to the bank, the improved performance was a consequence of a robust deposit mobilisation and cost reduction strategy adopted by the bank during the year under review.

Also, over N6.33 billion was raised from local and international investors during the same period.Consequently, the directors of the bank recommended a total dividend of N1.19 billion, translating to 30 kobo per 50 kobo ordinary share for the 2015 financial year.

Reviewing its performance during the bank’s yearly general meeting held in Lagos at the weekend, the Chairman of the company, Osarenren Emokpae explained that the percentage increase in both figures was 17 per cent respectively.

According to him, gross earnings also rose to N19..67 billion, which represent 18 per cent over N16.60 billion posted in 2015 while deposits from customers, grew from N20.36 billion to N25.70 billion during the year under review.

Total asset of the bank stood at N52.39 billion, compared to N39.62 billion in 2014. The microfinance bank also disbursed N113. 70 billion as loan Small and Medium Enterprises (SMEs).

This figure, according to the Chairman represents 23 per cent rise, when compared to N92.46 billion distributed in 2014.He added that the bank’s client base increased from 1,414,964 IN 2014 to 2,073,879 in 2015, which, according to him, represents 47 per cent growth.

“Our performance during the year under review was driven by increased focus on deposit mobilization and cost curtailment. Beyond the financial performance, the microfinance bank made huge progress in the implementation of its sustainability initiatives.

“Over 26,346 clients have been supported to acquire and use solar lamps instead of kerosene lamps. All our major meetings conducted with minimal use of papers. A total of 636 scholarship awards for secondary and tertiary education were given to children of our clients.”

The Managing Director of the bank, Godwin Ehigiamusoe explained that the N6.33 billion raised by the bank was a reflection of investors’ confidence strength and efficiency of its business model.

“The testimonial of our performance is depicted by the award conferred on our Microfinance bank as the best microfinance bank in agriculture financing under Credit Guarantee Scheme in 2015.”

Speaking on the effect of the micro economic issues and areas where government intervention is needed on the business, he said: “Comprehensive intervention that would boost the economy will also affect our businesses specifically, I would like the government to look at the areas of job creation, providing specific incentives of various nature to businesses in order to assist those businesses to weather through the economic crisis at the same time in a position to create jobs.

“At the moment we have not laid off anyone and I want to say that we are not considering that, but when you look at the dynamics in the economy, that could be a possibility but we have not bring that on the table. One area that we anticipated that would have impact on our operation indirectly is the effect of the macro-economic challenges on the businesses of our clients.

“When you have a situation were salaries are not paid as at when due, realizing that these salary earners form the bulk of the customers of owners of Micro Small medium businesses, that will affect the volume of their business and that may have some implication on our operation in the area of possible reduction in loan access and also the ability to meet repayment obligation as at when due.” He added.