NDIC Quarterly Vol 39 No 3&4 2024 – Activities of the NDIC in the Fourth Quarter of 2024

5.0 Introduction

Activities of the NDIC in the Fourth Quarter, 2024 This report discusses the activities and achievements of the NDIC in the fourth quarter of 2024.

5.1 Update on Corporate Strategic Performance

The NDIC continued to implement its various strategic initiatives in the period under review. At the end of December 2024, the Corporation:

i. Commenced the compilation of the 2024 full year Efficiency Report on utilities expenditure for Departments, Units, and Zonal offices (DUZs)/Cost Centres, which aimed at assessing cost efficiency and the Corporation's overall effectiveness. ii. Conducted the general review of its 2021 – 2025 strategic plan to assess performance, align it with current realities, and address emerging and critical issues affecting the Corporation. iii. Conducted the biennial 2024 Employee Motivation Survey (EMS) to measure and assess its Employee Motivation Index (EMI) and enhance employee motivation. iv. Conducted IT service review meetings to ensure the Corporation's IT infrastructure effectively support its strategic objectives. v. Conducted sensitization for desk officers of all Departments, Units, and Zones (DUZs) on the Service Level Agreement Management (SLAM) system to enhance understanding of agreement consummation, rating processes, and the policy of the system. vi. Conducted the biennial review of the Standard Operating Procedure (SOP) manuals for all DUZs to ensure the manual continues to act as a guide for all staff in accordance with the dynamic operating environment of the Corporation and address the gaps identified during the concluded Business Impact Analysis (BIA) exercise. vii. Responded to the Bureau for Public Service Reforms (BPSR) questionnaires on the Stakeholder Perception Survey on Public Service Reforms to help identify areas of success and challenges in implementing policy reforms. viii. Hosted the National Coordinator of the SERVICOM Office of the Presidency during the 2024 Customer Service Week (CSW) celebration at the Head office.

5.2 Corporate Operational Performance

5.2.1 Payments to Insured and Uninsured Depositors of Closed Insured Banks

i. In the fourth quarter of 2024, the NDIC paid N3.10 billion to 4,488 insured depositors, while no payment was made to uninsured depositors of banks in-liquidation. Cumulatively, the Corporation paid N59.32 billion to 1,131,203 insured depositors and N105.77 billion to uninsured depositors of 50 DMBs in-liquidation at end-December 2024. ii. The NDIC also paid N9.22 million to 121 insured depositors, while no payment was made to uninsured depositors of MFBs in-liquidation during the review period. Cumulatively, iii. the NDIC paid N5.16 billion to 135,773 insured depositors and N247.26 million to uninsured depositors of 546 MFBs in-liquidation at end-December 2024. During the fourth quarter of 2024, 10 insured depositors were paid N2.98 million, while no payment was made to uninsured depositors of 55 Primary Mortgage Banks (PMBs) in-liquidation. The cumulative insured amount paid by the NDIC to 2,701 depositors of closed PMBs stood at N367.06 million, and N261.99 million to the uninsured depositors at end-December 2024.

5.2.2 Payments to Creditors of Banks in-Liquidation

During the period under review, the NDIC made no payment to banks' creditors in-liquidation. Therefore, the cumulative payment to 1,034 out of 1,320 creditors remained at N1.28 billion at end-December 2024, as in the third quarter of 2024.

5.2.3 Payments to Shareholders of Banks in-Liquidation

In the period under review, there was also no payment by the NDIC to the banks' shareholders in-liquidation. Therefore, the cumulative payment to 1,007 shareholders remained at N4.90 billion as at end-December 2024, as in the third quarter of 2024.

5.3 Asset management activities

5.3.1 Risk Assets Recovery

N1,263.42 million was recovered from debtors of seven DMBs in-liquidation during the fourth quarter of 2024. Similarly, the sum of N7.29 million and N22.24 million were recovered from debtors of three PMBs and 12 MFBs in-liquidation, respectively. The total recovery from the risk assets of banks in-liquidation for the period was N1,292.95 million, as detailed in Table 5.1.

Table 5.1: Loan Recoveries (N' Million) for the Third Quarter and Fourth Quarter of 2024

Insured Institutions	Q3, 2024				Q4, 2024
	Jul N'mn	Aug N'mn	Sept N'mn	TOTAL N'mn	Oct N'mn	Nov N'mn	Dec N'mn	TOTAL N'mn
DMBS	167.95	382.53	264.46	814.94	517.46	582.41	163.55	1,263.42
PMBS	3.48	2.85	51.79	58.12	-	4.62	2.67	7.29
MFBS	1.24	2.71	3.49	7.44	17.25	3.44	1.55	22.24
GRAND TOTAL	172.67	388.1	319.74	880.51	534.71	590.47	167.77	1,292.95

Source: NDIC The total risk assets recovery of N1,292.95 million in the fourth quarter of 2024 represented an increase of N412.44 million or 46.84 per cent from N880.51 million recovered in the third quarter of 2024. The total recovery in 2024 stood at N2,639.12 million, representing 203.01 per cent of the Corporation's full-year Risk Assets Recovery target of N1,300 million.

5.3.2 Disposal of Physical Assets Banks in-Liquidation

The total amount realised from the sales of physical assets of banks in-liquidation in the fourth quarter ended December 31, 2024, was N4,769.52 million, compared with the sum of N58.66 million realised in the third quarter of 2024. The recovery of N4,769.52 million comprised the sum of N4,639.82 million, N0.09 million, and N129.61 million realised for DMBs, PMBs, and MFBs, respectively.

As at December 31, 2024, the cumulative realisation from Physical Assets and Rent collected on property of banks in-liquidation stood at N28,713.78 million. This figure comprised N27,178.10 million, N236.99 million, and N1,298.69 million for DMBs, PMBs, and MFBs in-liquidation, respectively.

5.3.3 Realisation of Investments of Banks in-Liquidation

The amount realised from investments of 59 banks in-liquidation during the fourth quarter of 2024 was N1.96 million, compared with N824.76 million realised during the third quarter of 2024. The sum comprised N0.50 million, and N1.46 million for one DMBs, two MFBs, and no realization of PMBs in-liquidation, respectively. Table 4 presents the summary of year-to-date actual recoveries against the target for the year.

Table 5.2: Year to date Actual Recoveries/Realisations by Asset Category (N' Million) at the end of the Fourth Quarter 2024

S/N	ASSET TYPE	ACTUAL RECOVERY ('bn)	RECOVERY TARGET ('bn)	COMPARISON TO TARGET (%)
1	Risk Assets	2,639,122,215.16	1,300,000,000.00	203.01
2	Physical Assets	4,871,948,471.06	1,000,000,000.00	487.19
3	Investments	841,732,737.79	-	-
	TOTAL	8,352,803,424.01	2,300,000,000.00	363.17

Source: NDIC The cumulative sum realised from investments of banks in-liquidation stood at N6,832.73 million at end-December 2024. This figure comprised realisations of N6,593.38 million, N75.05 million, and N164.30 million from the sale of investments of DMBs, PMBs, and MFBs, respectively.

5.4 Bank Supervision

5.4.1 Risk Based Examination (RBE) - On-Site Examination of DMBS

In the fourth quarter of 2024, the CBN/NDIC conducted risk-based supervision (RBS) of 22 banks with composite risk ratings of "above average" and "high".

Furthermore, as at December 31, 2024, the NDIC monitored 40 examined banks comprising 35 DMBs and 5 PSBs. The monitoring exercise assesses the expected direction of risks and the extent of the banks' implementation of previous examiners' recommendations.

5.4.2 On-Site Examination of MFBs and PMBS

The CBN allocated 160 banks (150 MFBs and 10 PMBs) to the NDIC for the 2024 on-site RBS Examination cycle, representing a 50.94 per cent increase, compared with 106 banks (100 MFBs and 6 PMBs) allocated in 2023.

During the period under review, the examination reports of the 10 PMBs examined by the Corporation in the third quarter of 2024 were issued to the PMBs and the CBN. Furthermore, it is worthy of note that the NDIC had examined 144 MFBs out of the 150 MFBs allocated to it by the CBN, while the Corporation was unable to examine six MFBs due to security challenges in the locations of five MFBs, in addition to one MFB that the CBN already examined.

In the fourth quarter of 2024, the NDIC monitored 93 of the 144 MFBs examined. The monitoring exercise aims to assess the extent of the banks' implementation of previous examiners' recommendations.

5.4.3 Investigations/Consumer Protection

At the end of the fourth quarter of 2024, 340 customer complaints from various banks were received by the NDIC, in addition to 84 brought forward from the fourth quarter of 2023, bringing the total to 424. Of the 424 complaints, 342, representing 80.66 per cent, were fully resolved, and 64 (15.09 per cent) were still being investigated. In contrast, 18 (4.25 per cent) were stepped down because account details and disputed amounts were not provided. Furthermore, out of the 342 investigations concluded, the NDIC successfully ensured the affected banks refunded the sum of N2.58 million and recommended a further refund of N31.15 million to the complainants. However, the amount borne by the complainants due to their negligence was N9.91 million during the quarter under review, representing a 65.47 per cent decrease compared with N28.70 million recorded in the quarter ended September 2024.

In the PMB-MFB sub-sector, the NDIC received 14 customer complaints from various banks during the fourth quarter ended December 31, 2024, in addition to 52 complaints received in the first three quarters of 2024. This brings the total number of complaints received during the 12 months ended December 31, 2024, to 66, out of which 58 were resolved, while investigations on the remaining eight are ongoing.

5.4.4 Special Investigations

The Corporation conducted the following special investigations during the quarter under review:

i. Attempted fraud and forgeries by staff of four DMBs involving significant amount, but no actual loss. Accordingly, the NDIC continued to enforce the bank's compliance with the regulation on Fidelity Guarantee Bonds. ii. A reported fraud incident in a Payment Service Bank (PSB) involving N9.79 billion occurred due to control lapses on the bank's core banking application and system glitch. iii. The total exposure amounted to N8.2 billion, of which N1.9 billion was recovered, and the recovery of N6.3 billion is ongoing. iv. Petition from Global Integrity Crusade Network (GICN) against Guaranty Trust Holding Company Plc (GTCO) and some of its subsidiaries, bordering false financial reporting, economic sabotage, unauthorized opening of accounts for its customers, KYC infraction in the UK, and violation of Ghana Foreign Exchange Regulations. Findings from the investigations found no merit in any of the alibi presented by the petitioner. v. Payment service disruptions due to the upgrade of core banking applications by three 3 DMBs that accounted for over 35 per cent of digital transactions in the banking industry. The affected banks were recommended to enhance their change management processes and stakeholders' communication strategies based on the findings.

5.4.5 Premium Assessment, Collection and Deposit Verification on Insured banks

As at December 31, 2024, the NDIC collected a premium of N3.64 billion from 486 MFBs and N335.52 million from 17 PMBs, bringing the total premium collected during the 12 months ended December 31, 2024, to N3.98 billion. The total premium collected represented 306.15 per cent of the N1.3 billion target collection in 2024 for the PMB-MFB sub-sector.

5.4.6 Fit and Proper Persons Enquiries

In the fourth quarter of 2024, the NDIC received and treated 352 requests (involving 1,204 individuals) from the other financial sector regulators (CBN, National Insurance Commission, National Pension Commission, and Securities and Exchange Commission) to conduct due diligence on prospective appointees in the financial sector.

5.5 Legal Activities

The major legal activities of the Corporation for the quarter ended December 31, 2024, were as follows:

i. The NDIC monitored 96 debt recoveries of "N100 million and above", 83 debt recoveries of "below N100 million", 44 corporate cases, 48 High Profile Defensive Litigations, six defensive cases involving MFBs & PMBs, 43 winding-up petition cases of MFBs & PMBs closed in 2023, 15 Criminal cases, 49 Corporate cases, and 20 cases handled by in-house counsel. ii. The Corporation obtained an additional five winding-up orders from the Federal High Court regarding MFBs and PMBs whose licenses were revoked by the Central Bank of Nigeria (CBN) in 2023. This brings the total number of winding-up orders obtained for these banks to 147. iii. The NDIC continued to monitored 20 criminal cases pending at the various national courts involving fraud, granting unauthorised and unsecured credit facilities, conspiracy, non-disclosure of interest and stealing funds belonging to DMBs in-liquidation. iv. The Corporation received one judgement, and recovered the sum of N24,450,000.00 from debtors of banks in-liquidation. v. The Corporation continued to monitor 25 investigation cases being conducted by the Director Public Prosecution of the Federation (DPPF), FMIU and EFCC for prosecution.

5.6 Enterprise Risk Assessment

During the fourth quarter of 2024, the NDIC continued to carry out its Enterprise Risk Management activities. At end-December 2024, the Corporation:

i. Consolidated the monthly Risk Reports (MRR 100) to continuously identify, assess, mitigate, manage and report on inherent risks across Departments, Units and Zones (DUZs). ii. Concluded monitoring the implementation of the Crisis Communication Plan (CCP), and Notification Call Tree (NCT). iii. Conducted the Business Impact Analysis (BIA) & Risk Assessment (RA) for Lagos & Zonal Offices, while reviewing the consolidated BIA report by the Senior Management is ongoing. iv. Also conducted sensitization for its staff regarding the approved NDIC Document Retention Policy, Record Managers and Pairing Partners, and commenced the implementation of the policy across the Corporation's DUZs. v. Commenced deploying the approved Electronic Document Management System (EDMS) across the Corporation's DUZs. vi. Reviewed the Risk Treatment Register, Corrective Action and Preventive Action Plan, and conducted the internal audit of the three International Standard Organisation (ISO) and the Integrated Management System (IMS). vii. Conducted the facility test, IT application test, and risk assessment on the NDIC Academy (Alternate site) to assess the Corporation's resilience. The significant risks identified during these exercises were profiled, and appropriate controls were reinforced. viii. Concluded the update of the Change Management Application, and reviewed the Incident Log to address enterprise risks and harness opportunities. ix. Conducted the 2024 Risk Awareness Week across the Corporation's DUZs to enhance staff's risk awareness. x. Organised the maiden Strategic Retreat with the theme "The Cost of Risk in the Corporation: Strategies for a Resilient Future" to enhance the staff's level of risk awareness within the corporation. xi. Held the 17th Business Continuity Steering Committee (BCSC) Meeting, 2nd Management Review (MR), and Crisis Management Team (CMT) Meeting to discuss progress, challenges, and way forward on the implementation of Business Continuity Management System (BCMS), and Crisis management.

5.7 Achievements/Challenges

5.7.1 Achievements

The following are some of the notable achievements of the NDIC during the quarter ended December 31, 2024:

i. The NDIC remitted the sum of N57.81 billion, which is 80 per cent of the Corporation's 2024 half-year unaudited Net Operating Surplus, into the FGN Consolidated Revenue Fund (CRF). ii. The NDIC paid N3.10 billion to 4,488 insured depositors of DMBs in-liquidation. It also paid N9.22 million to 121 insured depositors of MFBs in-liquidation. In addition, the NDIC paid N2.98 million to 10 insured depositors of 55 PMBs in-liquidation during the review period. iii. The sum of N1,263.42 million was recovered from debtors of seven DMBs in-liquidation during the fourth quarter of 2024. Similarly, the sum of N7.29 million and N22.24 million were recovered from debtors of three PMBs and 12 MFBs in-liquidation, respectively. The total recovery from the risk assets of banks in-liquidation for the period was N1,292.95 million. iv. The Corporation also received the "Best Use of Cloud Technology in Public Service and Excellence in Technology Deployment (Federal Agency)" merit award by the Nigeria Technology Award. v. The Corporation sensitized 398 students comprising 188 students from two Universities, 195 students from Secondary schools, and 15 students from the Ummah Scholarship Initiative for the Less Privileged (SLIP) Abuja, on the mandate and activities of the Corporation and its role in contributing to the stability of the nation's financial system.

5.7.2 Challenges

Regardless of the achievements mentioned above, the NDIC is still confronted with the following challenges:

i. Difficulty in debt recovery. ii. Difficulty in the execution of judgments. iii. Protracted legal processes. iv. Non-availability of title documents. v. Poor documentation by failed banks and inadequate information on borrowers.

5.8 Conclusion

Through its various activities on Deposit guarantee, Bank supervision, Distress resolution, and Bank liquidation, the Corporation has consistently pursued the achievement of its public policy objectives of depositors' protection, enhancing public confidence, and promoting financial system stability.