Chartered Bank was recognized as, "The Best Overall Bank in both real sector
financing and export sector", and also Best Banker of the year for 2004, by the Bankers Committee. In all, Chartered Bank left the evening with two trophies, numerous plaques, and certificates of recognition in hand.
To Mr. Moses Adedoyin, the bank's Managing Director, the awards were recognition of Chartered Bank's commitment to the traditional role of banks as engines for economic growth and development and also its eagerness to play in Nigeria's post-consolidation era. Chartered Bank plan to focus on the financing of economic development, whereby this recent award symbolize the continuation of the string of achievements recorded by the bank this year: such as, "AA" rating by Agusto & Co, one of Nigeria's leading financial analysts.
Education, Training and Development
One of the factors that has contributed to Chartered Bank's impressive achievements, according to Mr. Adedoyin, "Was the fact that it successfully
concluded an ambitious phased expansion program which saw its branch network
grow from 37 to 50 in less than six months. This achievement was the result of a long-term technology and training philosophy held at the bank. Chartered Bank has always ensured that its key staff are trained to enable rapid expansion into multiple markets and optimize returns as rapidly as possible. Chartered Bank also work closely with its technology partners, Neptune Software Plc, owners of Equinox banking system, whose role was to actively support this process through ongoing training and a strong local support network."
Performance
Chartered bank has an impressive performance record, according to Augusto & Co, "As of March 31, 2004, non-performing loans accounted for 0.4 per cent of the bank's portfolio of loans and advances. The bank has provided for 96 of its non-performing, which complied with the minimum requirement under the prudential guidelines and it is higher than the industry average of 72 per cent. The bank's cost to income ratio is better than the industry average and the lowest among its peers, while the pre-tax return on average assets and pre-tax returns on equity are the best among its peers." Augosto & Co noted, "The bank's liquidity ratio of 53 per cent was higher than the minimum regulatory requirements of 40 per cent as at that date," adding that, "Chartered Bank has satisfied all the regulatory requirements of capital adequacy and its capital is adequate for its current level of business."
Technology
Technology has played an important role in the success of Chartered Bank. The bank uses Equinox Executive Information System (EIS) to enable it to identify profit centers and minimize risk. Having the right information available has contributed to Chartered Banks decision to focus on the real sector and export sectors of the economy. A review of sectoral allocation of the bank's credit during the year shows that the manufacturing sector accounted for half of the total loans and advances, while the general commerce sector represented about one-quarter. Thus, Equinox EIS has enabled the bank to make profitable decisions such as spending about three-quarter of its total loans and advances portfolio on real sector and export financing during the year.
This process has led to increased profitability, which, in the last five years, the bank has provided to investors, with profitability rising from N318 million in 2000 to N837 million in 2002, N2.1 billion and N2.4 billion in 2003 and 2004 respectively.
The bank recorded net earnings of N4.8 billion in 2004, compared with N4.6 billion in 2003; this indicated a marginal increase in net earnings despite the increase in loans during the year. Pre-tax return on assets was 4.3 per cent, which was higher than the industry average of 3.4 per cent, while its pre-tax returns on equity of 49 per cent is also higher than the industry average of 38 per cent.
The bank's total loans and advances in 2004 increased by 23 per cent to N24.6 billion. The top 20 obligors accounted for 22 per cent of total loans. "We expect these initiatives to boost the bank's deposit base in the current financial year," Adedoyin said.
In future, Chartered Bank plans to complement its successful formula with easier customer access, thanks to Equinox Internet banking and Automated Teller machine (ATM). The bank is currently a member of the ATM consortium and recently deployed its ATMs for staff use on a test run basis prior to its formal launch.
