Activities of the NDIC in the First Quarter, 2024

4.0 Introduction

This report discusses the activities and achievements of the NDIC in the first quarter of 2024.

4.1 Update on Corporate Strategic Performance

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

i. Concluded the review of the Corporation's Integrated Management System (IMS) Framework. The report is ready for submission to the ISO Consultant (KPMG Advisory Services), in preparation for the upcoming ISO Surveillance Audit for the three ISO standards: 22301, 20000, and 27001. ii. Submitted report of the reforms implemented by the Corporation from 2021-2023 to Bureau of Public Service Reforms (BPSR). The purpose of the report was to enable BPSR to harmonise and consolidate all strands of reforms across the public service. iii. Automated its 24-Hour Toll-Free Help Desk (ZoHo Desk) authorizing the Desk policy guidelines to ensure effective and efficient resolutions of depositors' and other stakeholders' enquiries/complaints. iv. Conducted the first quarter of 2024 Service Level Agreement (SLA) ratings of all Departments, Units, and Zones (DUZs), using its Service Level Agreement Management System (SLAMS). v. Conducted the biennial review of the Standard Operating Procedure (SOP) manuals of all DUZs in line with the Corporation's approved policy and uploaded the SOP on the NDIC Portal.

4.2 Corporate Operational Performance.

4.2.1 Payments to Insured and Uninsured Depositors of Closed Insured Banks

i. In the first quarter of 2024, the NDIC paid N936,051.49 to 21 insured depositors and N40.79 million to uninsured depositors of 49 DMBs in-liquidation. Cumulatively, the NDIC had paid N8.28 billion to 444,214 insured depositors and N105.29 billion to uninsured depositors of 49 DMBs in-liquidation at end-March 2024. ii. The NDIC also paid N89.87 million to 1,500 insured depositors, while N37.86 million was paid to uninsured depositors of one Microfinance Bank (MFB) in-liquidation during the review period. Cumulatively, the NDIC had paid N5.12 billion to 135,196 insured depositors and N227.98 million to uninsured depositors of closed MFBs at end-March 2024. iii. During the first quarter of 2024, 52 insured depositors were paid N18.47 million, while no payment was made to uninsured depositors of 51 Primary Mortgage Banks (PMBs) in-liquidation. The cumulative insured amount paid by the NDIC to 2,625 depositors of closed PMBs stood at N359.07 million, and N261.99 million to the uninsured depositors as at March 31, 2024.

4.2.2 Payments to Creditors of Banks in-Liquidation

There was no payment to creditors of the 49 DMBs in-liquidation during the period under review. The cumulative payment to 1,033 out of 1,320 creditors, therefore, remained at N1.28 billion as in the quarter ended December 31, 2023.

4.2.3 Payments to Shareholders of Banks in-Liquidation

During the period under review, the NDIC paid the sum of N136,080 to two shareholders of closed DMBs in-liquidation. Consequently, the cumulative sum of N4.90 billion had been paid to 1,000 shareholders as at March 31, 2024.

4.3 Asset Management Activities

4.3.1 Risk Assets Recovery

The sum of N194.03 million was recovered from debtors of nine DMBs in-liquidation during the first quarter of 2024. Similarly, the sum of N21.09 million, and N79.51 million were recovered from debtors of 25 MFBs, and debtors of four PMBs in-liquidation, respectively. The total recovery from the risk assets of banks in-liquidation for the period was N294.63 million, as detailed in Table 4.1.

Table 4.1: Loan Recoveries (N' Million) for the Fourth Quarter of 2023 and First Quarter of 2024

INSURED Institutions	October N'mn	November N'mn	December N'mn	TOTAL N'mn	January N'mn	February N'mn	March N'mn	TOTAL N'mn
DMBs	26.65	9.54	4.89	41.08	64.1	126.38	3.55	194.03
MFBs	5.34	6.64	7.83	19.81	8.61	1.57	10.91	21.09
PMBs	14.71	0.6	3.05	18.36	66.95	7.99	4.57	79.51
GRAND TOTAL	46.70	16.79	15.76	79.25	139.7	135.9	19.03	294.63

Source: NDIC

The total risk assets recovery of N294.63 million represented an increase of N215.38 million (271.77 per cent) from N79.25 million recovered in the fourth quarter of 2023. The total recovery in the first quarter represents 22.66 per cent of the Corporation's full-year Risk Assets Recovery target of N1,300 million.

At end-March 2024, the cumulative recovery of Risk Assets of all banks in-liquidation stood at N32,657.65 million, comprising N31,337.39 million, N399.54 million and N920.72 million from debtors of DMBs, MFBs and PMBs in-liquidation, respectively.

4.3.2 Disposal of Physical Assets of Banks in-Liquidation

The total amount realised from the sales of physical assets of MFBs in-liquidation in the first quarter ended March 31, 2024, was N36.77 million, compared with the sum of N46.82 million realised in the fourth quarter of 2023. There was no such realisation from other categories of banks in liquidation. The realisation in the first quarter represents 3.68 per cent of the Corporation's full-year budgeted Physical Assets Recovery target of N1,000 million.

As at March 31, 2024, the cumulative realisation from Physical Assets and Rent collected on properties of banks in-liquidation stood at N23,878.59 million. This figure comprised N22,528.23 million, N1,116.94 million and N233.42 million for DMBs, MFBs and PMBs in-liquidation, respectively.

4.3.3 Realisation of Investments of Banks in-Liquidation

The amount realised from investments of nine banks in-liquidation during the first quarter of 2024 was N4.78 million, compared with N30.22 million realised during the fourth quarter of 2023. The sum comprised N3,209.01, N4.66 million, and N115,596.45 for one DMB, seven MFBs, and one PMB in-liquidation, respectively. Table 4.2 presents the summary of quarterly recoveries against the target for the year.

Table 4.2: Actual and Target Recoveries/Realisations by Asset Category (N' Million) at the end of the First Quarter 2024

S/N	ASSET TYPE	RECOVERY'(N' Million)	TARGET'('Million)	ACHIEVEMENT (%)
1	Risk Assets	294.63	1,300	22.66
2	Physical Assets	36.77	1,000	3.68
3	Investments	4.78		-
TOTAL		336.18	2,300	14.62

Source: NDIC

The cumulative sum realized from investments of banks in-liquidation stood at N5,995.77 million at end-March 2024. This figure comprised realisations of N5,802.95 million, N123.76 million, and N69.06 million from the sale of investments of DMBs, MFBs and PMBs, respectively.

4.4.Bank Supervision Risk-Based Supervision

4.4.1 On-Site Examination of Payment Service Banks

In the first quarter of 2024, CBN/NDIC examiners conducted Risk Based Supervision (RBS) of two Payment Service Banks (PSBs).

4.4.2 Risk Asset Examination - On-Site Examination of DMBs

During the period under review, CBN/NDIC examiners conducted Risk Assets Examination (RAE) of 41 banks, comprising 35 DMBs and Six PSBs. The CBN led the examination of 32 out of the 41 banks, while the NDIC led the remaining nine. The objective of the examination was to facilitate the CBN's approval of the DMBs' 2023 Annual Audited Accounts.

4.4.3 Quality Assurance on DMBs' Examination Reports

The quality assurance of the under-listed examinations was jointly carried out by the CBN/NDIC Supervisory Methodology Group during the first quarter 2024:

i. RAE Reports as at December 31, 2023. ii. RBS Reports of 16 high and above-average risk-rated banks as at September 30, 2023.

4.4.4 On and Off-Site Monitoring of DMBs and PSBs

As at March 31, 2024, the NDIC monitored 41 examined banks. The monitoring exercise aims to assess the extent of the banks' implementation of previous examiners' recommendations.

4.4.5 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 50.94 per cent increase, compared with 106 banks (100 MFBs and 6 PMBs) allocated in 2023. The planning for the RBS examination is ongoing, after which the fieldwork will commence.

4.4.6 Investigations/Consumer Protection

At the end of the first quarter of 2024, 108 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 192. These complaints involve the sum of N315.42 million deducted from customers' accounts. Of the 192 complaints, 133, representing 69 per cent, were fully resolved, 53 (28 per cent) were still being investigated, while six (3 per cent) were stepped down because account details and disputed amounts were not provided. In addition, out of the 133 investigations concluded, the NDIC successfully ensured the affected banks refunded the sum of N13.83 million and recommended a further refund of N20.37 million to the complainants. In comparison, the complainants should bear the sum of N48.34 million due to negligence.

At the PMB-MFB sub-sector, 18 customer complaints from various banks were received by the NDIC during the first quarter ended March 31, 2024. When added to 13 brought forward from the fourth quarter of 2023, the total complaints amounted to 31. Of these complaints, 6 (19.35 per cent) were fully resolved, while 25 (80.65 per cent) were at various stages of resolution.

4.4.7 Premium Assessment, Collection and Deposit Verification on Insured Banks

During the quarter under review, the NDIC collected a total premium of N2.20 billion from 235 banks comprising 233 MFBs and two PMBs. The premium collected in the first quarter of 2024 represented 169.23 per cent of the N1.3 billion target collection of 2024 for the PMB-MFB sub-sector. Notably, the increase in premium collection was due to the premium payment of N1.4 billion by Moniepoint MFB.

4.4.8 Fit and Proper Persons Enquiries

As at end-March 2024, the NDIC received and treated 186 requests (involving 556 individuals) from the other financial sector regulators (CBN, National Insurance Commission, National Pension Commission) to conduct due diligence on prospective appointees in the financial sector.

4.5 Legal Activities

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

i. The NDIC monitored 84 debt recovery "N100 million and above", 71 debt recovery of "below N100 million", 49 corporate cases, 26 Defensive Litigations, six defensive cases involving MFBs & PMBs, 113 winding-up petition cases of MFBs & PMBs, and 17 cases handled by in-house counsel. ii. The NDIC further monitored 14 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.

4.6 Enterprise Risk Assessment

In the first quarter of 2024, the Enterprise Risk Management activities of the NDIC included:

i. Review of the Change Management and Incident Log, as well as the Integrated Management Manual, to address enterprise risks and harness opportunities. ii. Successful conduct of a 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.

4.7 Achievements/Challenges

4.7.1 Achievements

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

i. The NDIC received the 'Financial Institution of the Year' award from the Silverbird Group. ii. The Corporation received two awards for 'Best use of social media' and 'Excellence in adopting emerging technologies' from the Nigeria Technology Awards (NITA). iii. The Corporation obtained four judgments in her favour in various courts of the federation. iv. The NDIC executed 36 Corporate Social Responsibility (CSR) Projects across the six geopolitical regions of the country. v. The NDIC paid N936,051.49 to 21 insured depositors and N40.79 million to uninsured depositors of 49 DMBs in-liquidation. The NDIC also paid N89.87 million to 1,500 insured depositors, while N37.86 million was paid to uninsured depositors of one MFB in-liquidation during the review period. vi. N194.03 million was recovered from debtors of nine DMBs in-liquidation during the first quarter of 2024. Similarly, the sum of N21.09 million, and N79.51 million were recovered from debtors of 25 MFBs, and debtors of four PMBs in-liquidation, respectively. Consequently, the total recovery from the risk assets for the period was N294.63 million.

4.7.2 Challenges

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

i. Difficulty in debt recovery. ii. Difficulty in execution of judgments. iii. Protracted legal processes.

4.8 Conclusion

Through its various activities, the Corporation has consistently pursued the achievement of its public policy objectives of depositors' protection, enhancing public confidence, and promoting financial system stability.