17 financial statement - nigerian stock exchange · the companies and allied matters act and the...

Financial Statement

17

S K Y E B A N K A N N U A L R E P O R T & F I N A N C I A L S T A T E M E N T S 2 0 1 5

1

Report of the Audit Commitee

April 21, 2016

For the year ended 31 December 2015


2

CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS

For year ended 31 December 2015

Statement of Directors’ Responsibilities In relation to the Consolidated Financial Statements

Dr Tunde Ayeni Timothy Oguntayo

Chairman Group Managing Director

21 April 2016 21 April 2016

The Companies and Allied Matters Act and the Banks and Other Financial Institutions Act, require the directors to prepare nancial

statements for each nancial year that gives a true and fair view of the state of nancial affairs of the Company and Group at the end of

the year and of its prot or loss. The responsibilities include ensuring that the Company and Group;

Keep proper accounting records that disclose, with reasonable accuracy, the nancial position of the Company and Group and

comply with the requirements of the Companies and Allied Matters Act and the Banks and Other Financial Institutions Act;

Establish adequate internal controls to safeguard its assets and to prevent and detect fraud and other irregularities; and

Prepare nancial statements using suitable accounting policies supported by reasonable and prudent judgments and estimates

that are consistently applied.

The Directors accept responsibility for the nancial statements, which have been prepared using appropriate accounting policies

supported by reasonable and prudent judgments and estimates, in conformity with the International Financial Reporting Standard (IFRS)

and the requirements of the Companies and Allied Matters Act; CAP C20 Laws of the Federation of Nigeria 2004 and the Financial

Reporting Council of Nigeria No.6, 2011.

The directors are of the opinion that the consolidated nancial statements give a true and fair view of the state of the nancial affairs of

the Bank and Group and of the nancial performance and cash-ows for the period. The directors further accept responsibility for the

maintenance of accounting records that may be relied upon in the preparation of nancial statements, as well as adequate systems of

internal nancial control.

Nothing has come to the directors to indicate that the Bank and Group will not remain a going concern for at least twelve months from

the date of this statement.

SIGNED ON BEHALF OF THE BOARD OF DIRECTORS BY:

For the year ended 31 December 2015


3i


3ii

Statement of Comprehensive Income(All amounts in millions of Naira unless otherwise stated)

Interest income

Interest expense

Net interest income

Loan impairment charges

Fee and commission income

Fee and commission expense

Net fee and commission income

Net trading income

Other operating income

Bargain purchase

Impairment charge on other financial assets

Net operating income

Employee benefit and compensation cost

Administration and general expenses

Depreciation and amortisation

(Loss)/profit before tax

Taxation

(Loss)/profit for the year

(Loss)/profit attributable to:

Owners of the Bank

Non-controlling interests

Other comprehensive income:

Items that may be subsequently reclassified to

profit or loss

Net change in fair value on available-for-sale financial

assets

Currency translation differences arising from foreign

operations

Items that will not be reclassified subsequently to

profit or loss

Remeasurement of post employment benefit obligation

Other comprehensive income for the year, net of

tax

Total comprehensive (loss)/income for the year

Total comprehensive (loss)/income attributable

to:

Owners of the bank

Non-controlling interests

Earnings per share for profit attributable to

owners of the Bank

Basic/diluted (loss)/earnings per share (kobo):

The accompanying notes on pages to form an integral part of these nancial statements40 159

Notes

7

8

9

10

11

12

13

14

15

16

17

38

18

42 467 2,360 467 2,360

31 December 31 December 31 December 31 December

2015 2014 2015 2014

127,908 107,847 125,559 107,081

(76,993) (44,572) (78,085) (44,495)

50,915 63,275 47,474 62,586

(27,536) (18,992) (28,706) (19,706)

23,379 44,283 18,768 42,880

16,862 14,914 16,131 14,532

(1,801) (1,884) (1,785) (1,855)

15,061 13,030 14,346 12,677

13,457 9,252 12,755 9,226

5,651 4,729 5,066 4,607

- 8,976 - -

(7,145) (1,959) (6,251) (1,959)

50,403 78,311 44,684 67,431

(38,229) (19,676) (37,122) (19,481)

(40,874) (34,795) (38,684) (34,561)

(8,946) (4,390) (8,745) (4,124)

(37,646) 19,450 (39,867) 9,265

(3,080) (733) (2,556) (636)

(40,726) 18,717 (42,423) 8,629

(40,804) 18,668 (42,423) 8,629

78 49 - -

(40,726) 18,717 (42,423) 8,629

(129) 2,493 134 2,493

3,339 (698) - -

3,677 4,155 601 4,853

(37,049) 22,872 (41,822) 13,482

(37,212) 22,823 (41,822) 13,482

163 49 - -

(37,049) 22,872 (41,822) 13,482

(299) 137 (306) 62

Group Bank




4


5

(All amounts in millions of Naira unless otherwise stated)

Assets Notes

Cash and balances with central banks 19

Due from banks and other financial institutions 20

Financial assets held for trading 21

Derivative financial assets 36

Loans and advances to customers 22

Investment securities:

- Available for sale investments 23

- Held to maturity investments 24

- Loans and receivables investments 25

Assets pledged as collateral 26

Prepayment and other assets 27

Trading properties 28

Investment properties 29

Investment in subsidiaries 30

Property, plant and equipment 31

Intangible assets 32

Deferred tax assets 40

Assets classified as held for sale 33

Total assets

Liabilities

Due to other financial institutions 34

Deposits from customers 35

Derivative financial liabilities 36

Borrowings from local and foreign institutions 37

Current tax liability 38

Accruals and other liabilities 39

Deferred tax liability 40

Liabilities on investment contracts 41

Retirement benefit obligation 42

Total liabilities

Equity

Share capital 43

Share premium 43

Accumulated (loss)/Retained earnings 43

Other reserves 43

Non-controlling interest 43

Total equity

Total equity and liabilities

The accompanying notes on pages to form an integral part of these nancial statements40 159

The financial statements were approved and authorised for issue by the Board of Directors on 21 April 2016 and signed on its

behalf by:

Dr. Olatunde Ayeni

Chairman

FRC No: 2013/IODN/00000001738

Mr Timothy Oguntayo

Group Managing Director / CEO

FRC No: 2013/ICAN/00000001740

150 150 150 150


2015 2014 2015 2014

205,147 300,644 202,725 251,805

37,031 72,978 35,617 56,114

344 18,283 131 1,384

178 - - -

704,896 645,774 700,403 598,197

14,875 8,414 9,812 2,718

50,756 125,101 43,031 72,687

34,949 36,058 33,919 18,387

68,701 90,170 68,701 34,066

9,973 15,069 15,443 12,619

3,859 3,866 - -

2,008 1,995 - -

- - 6,693 129,607

62,973 65,431 61,813 29,937

3,076 3,871 3,066 1,962

481 463 - -

1,199,247 1,388,117 1,181,354 1,209,483

1,199,397 1,388,267 1,181,504 1,209,633

33,110 51,816 31,766 12,498

753,145 952,302 754,882 818,457

335 288 335 288

216,448 131,279 216,448 124,967

2,716 5,230 1,515 1,278

78,588 97,966 74,141 112,209

3,367 1,225 3,177 1,084

- 26 - -

7,505 6,903 7,491 6,899

1,095,214 1,247,035 1,089,755 1,077,680

6,940 6,609 6,940 6,609

65,548 65,548 65,548 65,548

(6,825) 42,662 (17,134) 32,225

37,593 25,649 36,395 27,571

103,256 140,468 91,749 131,953

927 764 - -

104,183 141,232 91,749 131,953

1,199,397 1,388,267 1,181,504 1,209,633

Group Bank

FRC No: 2016/ICAN/00000014239

Mr Pius Olaoye

Chief Financial O cer



Statement of Financial Position

(All

am

ounts

inm

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sta

ted)

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pre

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tal

inte

rest

Eq

uit

y

Bala

nce

at

1Jan

uary

20

15

Loss

for

the

year

Rem

easure

ment

ofpost

em

plo

ym

ent

benefit

obligation

Tra

nsla

tion

reserv

eChanges

infa

irvalu

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financia

lin

str

um

ents

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tal

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er

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pre

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e

To

tal

com

pre

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siv

e

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e

Tra

nsacti

on

sw

ith

ow

ners

Bonus

share

sTra

nsfe

rfo

rth

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To

tal

tran

sacti

on

sw

ith

ow

ners

Bala

nce

at

31

Decem

ber

20

15

6,6

09 - - - - - -

331 -

33

1

6,9

40

65

,54

8 - - - - - - - - -

65

,54

8

7,5

03 - - - - - - - - -

7,5

03

15

,82

2 - - - - - - -136

13

6

15

,95

8

1,8

54 - - - - - - - - -

1,8

54

23 - - - - - - -

8,6

83

8,6

83

8,7

06

2,4

93 - -

(129)

(1

29

)

(1

29

) - - -

2,3

64

(7

04

) - -3,2

54 -

3,2

54

3,2

54 - - -

2,5

50

(1

,34

2) - - - - - - - - -

(1

,34

2)

42

,66

2

(40,8

04)

467 - -

46

7

(4

0,3

37

)

(331)

(8,8

19)

(9

,15

0)

(6

,82

5)

14

0,4

68

(40,8

04)

467

3,2

54

(129)

3,5

92

(3

7,2

12

) - - -

10

3,2

56

76

4

78 -

85 -

85

16

3 - - -

92

7

14

1,2

32

(40,7

26)

467

3,3

39

(129)

3,6

77

(3

7,0

49

) - - -

10

4,1

83

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31

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Gro

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6

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sTo

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Eq

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Bala

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at

1Jan

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20

14

6,6

09

65

,54

87

,50

31

4,4

24

1,8

54

7,0

13

-(6

)(2

,12

9)

19

,73

71

20

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38

48

12

1,4

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Pro

fit

for

the

year

--

--

--

--

18,6

68

18,6

68

49

18,7

17

Rem

easure

ment

ofpost

em

plo

ym

ent

benefit

obligation

--

--

--

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-2,3

60

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reserv

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--

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(698)

--

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98)

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str

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--

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2,4

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(6

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5

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--

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271

(271)

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--

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-(6

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--

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--

--

--

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(3,9

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--

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31

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ber

20

14

6,6

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65

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87

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31

5,8

22

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2,4

93

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42

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21

40

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87

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14

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32

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ounts

inm

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Equity


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l

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1Jan

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20

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6,6

09

65

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87

,50

31

5,7

21

1,8

54

-2

,49

33

2,2

25

13

1,9

53

Loss

for

the

year

--

--

--

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2,4

23)

(42,4

23)

Oth

er

com

pre

hen

siv

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me/

(lo

ss),

net

of

tax

Rem

easure

ment

ofpost

em

plo

ym

ent

benefit

obligation

--

--

--

-467

467

Net

changes

infa

irvalu

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financia

l

instr

um

ents

--

--

--

134

-134

Tota

loth

er

com

pre

hen

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incom

e/

(lo

ss)

--

--

--

134

467

601

Tota

lcom

pre

hen

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elo

ss

--

--

--

13

4(4

1,9

56

)(4

1,8

22

)

Tra

nsacti

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sw

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ow

ners

Tra

nsfe

rsfr

om

reserv

es

--

--

-8,6

90

-(8

,690)

-Bonus

share

s331

--

--

--

(331)

-D

ivid

ends

for

equity

hold

ers

--

--

--

--

-Barg

ain

purc

hase

--

--

--

-1,6

18

1,6

18

Tota

ltr

an

sacti

on

sw

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Ow

ners

33

1-

--

-8

,69

0-

(7

,40

3)

1,6

18

Bala

nce

at

31

Decem

ber

20

15

6,9

40

65

,54

87

,50

31

5,7

21

1,8

54

8,6

90

2,6

27

(1

7,1

34

)9

1,7

49

Att

rib

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toeq

uit

yh

old

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CO

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(All

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ounts

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ss

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Bank

Sta

tem

ent of C

hanges

in E

quity


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l

Bala

nce

at

1Jan

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20

14

6,6

09

65

,54

87

,50

31

4,4

74

1,8

54

7,0

13

-1

9,4

36

12

2,4

37

Pro

fit

for

the

year

--

--

--

-8,6

29

8,6

29

Oth

er

com

pre

hen

siv

ein

co

me,

net

of

tax

Rem

easure

ment

ofpost

em

plo

ym

ent

benefit

obligation

--

--

--

-2,3

60

2,3

60

Net

changes

infa

irvalu

eofAFS

financia

l

instr

um

ents

--

--

--

2,4

93

-2,4

93

Tota

loth

er

com

pre

hen

siv

ein

com

e-

--

--

-2,4

93

2,3

60

4,8

53

Tota

lcom

pre

hen

siv

ein

com

e-

--

--

-2

,49

31

0,9

89

13

,48

2

Tra

nsacti

on

sw

ith

ow

ners

Div

idends

for

equity

hold

ers

--

--

--

-(3

,966)

(3,9

66)

Tra

nsfe

rfo

rth

eyear

--

-1,2

47

-(7

,013)

-5,7

66

-

Tota

ltr

an

sacti

on

sw

ith

Ow

ners

--

-1

,24

7-

(7

,01

3)

-1

,80

0(3

,96

6)

Bala

nce

at

31

Decem

ber

20

14

6,6

09

65

,54

87

,50

31

5,7

21

1,8

54

-2

,49

33

2,2

25

13

1,9

53

Att

rib

uta

ble

toeq

uit

yh

old

ers

(All

am

ounts

inm

illions

ofN

aira

unle

ss

oth

erw

ise

sta

ted)

CO

NS

OL

IDA

TE

DA

ND

SE

PA

RA

TE

FIN

AN

CIA

LS

TA

TE

ME

NT

S

Fo

ry

ea

re

nd

ed

31

De

ce

mb

er

20

15

Bank

Sta

tem

ent of C

hanges

in E

quity


9


10



Statement of Cashflows


2015 2014 2015 2014

Operating activities

Net cash used in operating activities (268,997) (77,491) (310,467) (68,482)

Investing activities

Acquisition of investment securities (34,098) (30,129) (34,002) (39,481)

Interest received on investment securities 27,926 28,061 26,356 27,976

Dividend received 317 18 205 18

Acquisition of property and equipment (7,438) (6,175) (7,188) (5,968)

Acquisition of investment in subsidiaries - - - (126,575)

Proceeds from the sale of property and

equipment

872 2,341 857 2,342

Acquisition of intangible assets (1,091) (209) (1,086) (190)

Net cash effect of acquired subsidiary - (103,147) 66,114 -

Proceeds from disposal of assets held for sale - 67 - 67

Proceeds from disposed and matured investment

securities

142,072 136,884 142,071 136,884

Net cash generated from/(used in) investing

activities

128,560 27,711 193,327 (4,927)

Cash flows from financing activities

Interest paid on interest bearing borrowings (6,509) (6,179) (6,509) (6,180)

Proceeds from interest bearing borrowings 158,124 116,088 158,124 116,088

Repayment of interest bearing borrowings (68,496) (128,929) (68,496) (128,929)

Dividends paid to owners - (3,966) - (3,966)

Net cash provided by/(used in) financing

activities

83,119 (22,986) 83,119 (22,987)

Net decrease in cash and cash equivalents (57,318) (72,766) (34,021) (96,396)

Cash and cash equivalents at beginning of year 135,440 205,601 108,306 202,186

Effect of exchange rate fluctuations on cash held 8,348 2,605 8,349 2,516

Net decrease in cash and cash equivalents (57,318) (72,766) (34,021) (96,396)

Cash and cash equivalents at

31 December

Note

44

19.1 86,470 135,440 82,634 108,306

Group Bank



11

1

2

2.1

2.2

2.2.1

a)

(i)

General information

Summary of signicant accounting policies

Statement of compliance

The consolidated and separate nancial statements of the Bank and the Group for the year ended 31 December 2015have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by theInternational Accounting Standards Board (IASB), and the interpretations of these standards, issued by theInternational Financial Reporting Interpretations Committee (IFRIC).

Basis of preparation

Changes in accounting policy and disclosures

The accompanying nancial statements comprise the nancial statements of Skye bank Plc. (referred to as the"Bank" or "the Parent") and its subsidiaries (referred to together as "the Group"). The Bank is a companyincorporated in Nigeria under the Companies and Allied Matters Act CAP C20 LFN 2004. The address of the Bank’sregistered ofce is 3 Akin Adesola Street, Victoria Island, Lagos. These consolidated and separate nancialstatements for the year ended 31 December 2015, are prepared for the Group and the Bank respectively. The Bankand the Group are primarily involved in wholesale, corporate and retail banking and mortgage nancing.

These nancial statements were authorised for issue by the Board of Directors on 21 April 2016.

The principal accounting policies adopted in the preparation of these consolidated and separate nancial statementsare set out below. These policies are applicable to both the Bank and Group nancial statements and have beenconsistently applied to all the years presented, unless otherwise stated.

These nancial statements comprise the statement of comprehensive income prepared as a single statement, thestatement of nancial position, the statement of changes in equity, the statement of cash ow and the notes.

These nancial statements have been prepared in accordance with the going concern principle under the historicalcost convention, as modied by the following:

(i) available-for-sale nancial asset, nancial assets and liabilities (including derivative instruments), certain classeso nvestment property - measured at fair value and

(ii) assets held for sale - measured at fair value less cost of disposal.

The preparation of nancial statements in conformity with IFRS requires the use of certain critical accountingestimates. It also requires management to exercise its judgment in the process of applying the Group’s accountingpolicies. Changes in assumptions may have a signicant impact on the nancial statements in the period theassumptions changed. Management believes that the underlying assumptions are appropriate and that the Group’snancial statements therefore present the nancial position and results fairly. The areas involving a higher degree ofjudgment or complexity, or areas where assumptions and estimates are signicant to the consolidated nancialstatements, are disclosed in Note 6.

The Group has applied the following standards and amendments for the rst time for their annual reporting periodcommencing 1 January 2015:

New standards, amendments and interpretations adopted by the Group

(i) Annual Improvements to IFRSs – 2010-2012 Cycle and 2011 – 2013(ii) Dened Benet Plans: Employee Contributions – Amendments to IAS 19

The adoption of the improvements made in the 2012-2012 Cycle has required additional disclosures in our segmentnote. Other than that, the adoption of these amendments did not have any impact on the current period or any priorperiod and is not likely to affect future periods.

Annual Improvements 2010-2012 Cycle



NOTES TO THE FINANCIAL STATEMENTS

(ii)

b)

(i) IFRS 9, 'Financial instruments'

New standards and interpretations not yet adopted

IFRS 9 addresses the classication, measurement and derecognition of nancial assets and nancial liabilities andintroduces new rules for hedge accounting. In July 2014, the IASB made further changes to the classication andmeasurement rules and also introduced a new impairment model. These latest amendments now complete the newnancial instruments standard. The standard is effective for annual periods beginning 1 January 2018.

Amendments to IAS 19 Dened Benet Plans: Employee Contributions

IAS 24 Related Party Disclosures

The amendment is applied retrospectively and claries that a management entity (an entity that provides keymanagement personnel services) is a related party subject to the related party disclosures. In addition, an entity thatuses a management entity is required to disclose the expenses incurred for management services. This amendmentis not relevant for the Group as it does not receive any management services from other entities.

IAS 19 requires an entity to consider contributions from employees or third parties when accounting for denedbenet plans. Where the contributions are linked to service, they should be attributed to periods of service as anegative benet. These amendments clarify that, if the amount of the contributions is independent of the number ofyears of service, an entity is permitted to recognise such contributions as a reduction in the service cost in the periodin which the service is rendered, instead of allocating the contributions to the periods of service. This amendment iseffective for annual periods beginning on or after 1 July 2014. This amendment is not relevant to the Group, sincenone of the entities within the Group has dened benet plans with contributions from employees or third parties.

With the exception of the improvement relating to IFRS 2 Share-based Payment applied to share-based paymenttransactions with a grant date on or after 1 July 2014, all other improvements are effective for accounting periodsbeginning on or after 1 July 2014. The Group has applied these improvements for the rst time in these consolidatednancial statements. They include:

IFRS 8 Operating Segments

The amendments are applied retrospectively and clarify that:• An entity must disclose the judgements made by management in applying the aggregation criteria in paragraph 12of IFRS 8, including a brief description of operating segments that have been aggregatedand the economic characteristics (e.g., sales and gross margins) used to assess whether the segments are ‘similar’• The reconciliation of segment assets to total assets is only required to be disclosed if the reconciliation is reportedto the chief operating decision maker, similar to the required disclosure for segment liabilitiesThe Group has not applied the aggregation criteria in IFRS 8.12. The Group has presented the reconciliation ofsegment assets to total assets in previous periods and continues to disclose the same in Note 45 in this period’snancial statements as the reconciliation is reported to the chief operating decision maker for the purpose of decisionmaking.

IFRS 3 Business Combinations

The amendment is applied prospectively and claries that all contingent consideration arrangements classied asliabilities (or assets) arising from a business combination should be subsequently measured at fair value throughprot or loss whether or not they fall within the scope of IAS 39. This is consistent with the Group’s currentaccounting policy and, thus, this amendment did not impact the Group’s accounting policy.





12


13

(ii)

(iii)

2.3

(a)

(b)

The IASB has issued a new standard for the recognition of revenue. This will replace IAS 18 which covers contractsfor goods and services and IAS 11 which covers construction contracts. The new standard is based on the principlethat revenue is recognised when control of a good or service transfers to a customer – so the notion of controlreplaces the existing notion of risks and rewards. The standard permits a modied retrospective approach for theadoption. Under this approach entities will recognise transitional adjustments in retained earnings on the date ofinitial application (e.g. 1 January 2018), i.e. without restating the comparative period. They will only need to applythe new rules to contracts that are not completed as of the date of initial application. The standard is effective forannual periods beginning 1 January 2018.

In addition, the IASB has indicated that it will issue a new standard on accounting for leases. Under the proposals,lessees would be required to recognise assets and liabilities arising from both operating and nance leases on thebalance sheet. The standard is effective for annual periods beginning 1 January 2019. The Group is yet to assess theimpact of this standard.

In addition, the IASB also plans to issue a new standard on insurance contracts. The Group will consider the nancialimpacts of these new standards as they are nalised.

There are no other standards that are not yet effective and that would be expected to have a material impact on theentity in the current or future reporting periods and on foreseeable future transactions.

Items included in the consolidated nancial statements of each of the Group's entities are measured using thecurrency of the primary economic environment in which the entity operates (the “functional currency”). Theconsolidated nancial statements are presented in Nigerian Naira (“N”), which is the Group’s presentation currency.

Transactions and balances

IFRS 15 Revenue from Contracts with Customers

IFRS 16 Leases

Foreign currency translation

Functional and presentation currency

Changes in the fair value of monetary securities denominated in foreign currency classied as available for sale areanalysed between translation differences resulting from changes in the amortised cost of the security and otherchanges in the carrying amount of the security. Translation differences related to changes in amortised cost arerecognised in prot or loss, and other changes in carrying amount are recognised in other comprehensive income.

Foreign currency transactions, that is transactions denominated or that require settlement in a foreign currency, aretranslated into the functional currency using the exchange rates prevailing at the dates of the transactions. Monetaryitems denominated in foreign currency are translated using the closing rate as at the reporting date. Non-monetaryitems measured at historical cost denominated in a foreign currency are translated with the exchange rate as at thedate o nitial recognition; non-monetary items in a foreign currency that are measured at fair value are translatedusing the exchange rates at the date when the fair value was determined.

Foreign exchange gains and losses resulting from the settlement of foreign currency transactions and from the yearend translation of monetary assets and liabilities denominated in foreign currencies are recognised in the incomestatement, except when deferred in other comprehensive income as qualifying cash ow hedging instruments andqualifying net investment hedging instruments.

All foreign exchange gains and losses recognised in the income statement are presented net in the IncomeStatement. Foreign exchange gains and losses on other comprehensive income items are presented in othercomprehensive income within the corresponding item.

Except where indicated, nancial information presented in Naira has been rounded to the nearest million.




(c)

2.4

Subsidiaries

The results and nancial position of all the Group entities (none of which has the currency of a hyper-inationaryeconomy) that have a functional currency different from the presentation currency are translated into thepresentation currency as follows:

• assets and liabilities for each statement of nancial position presented are translated at the closing rate at thedate of that statement of nancial position;• income and expenses for each income statement are translated at average exchange rates (unless this average isnot a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in whichcase income and expenses are translated at the dates of the transactions); and• all resulting exchange differences are recognised in other comprehensive income.

Exchange differences arising from the above process are reported in shareholders' equity as 'Foreign currencytranslation reserve'.

Group companies (foreign operations)

Basis of consolidation

The nancial statements of the subsidiaries used to prepare the consolidated nancial statements were prepared asof the parent company’s reporting date. The consolidation principles are unchanged as against the comparativeperiod.

The Group applies the acquisition method to account for business combinations. The consideration transferred for theacquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred to the former owners ofthe acquiree and the equity interests issued by the Group. The consideration transferred includes the fair value ofany asset or liability resulting from a contingent consideration arrangement. Identiable assets acquired andliabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at theacquisition date. The Group recognises any non-controlling interest in the acquiree on an acquisition-by-acquisitionbasis, either at fair value or at the non-controlling interest’s proportionate share of the recognised amounts ofacquiree’s identiable net assets. Investment in subsidiaries are reported at cost less impairment (if any) in theseparate nancial statements of the Bank.

Acquisition-related costs are expensed as incurred. If the business combination is achieved in stages, the acquisitiondate carrying value of the acquirer’s previously held equity interest in the acquiree is re-measured to fair value at theacquisition date; any gains or losses arising from such re-measurement are recognised in prot or loss.

Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls anentity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and hasthe ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the dateon which control is transferred to the group. They are deconsolidated from the date that control ceases.

Translation differences on non-monetary nancial assets and liabilities such as equities held at fair value throughprot or loss are recognised in prot or loss as part of the fair value gain or loss. Translation differences on non-monetary nancial assets measured at fair value, such as equities classied as available for sale, are included inother comprehensive income.

On consolidation, exchange differences arising from the translation of the net investment in foreign entities, and ofborrowings and other currency instruments designated as hedges of such investments, are taken to 'Othercomprehensive income'. When a foreign operation is disposed of, or partially disposed of, such exchange differencesare recognised in the consolidated income statement as part of the gain or loss on sale. Goodwill and fair valueadjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity andtranslated at the closing rate.





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15

2.5 Current and deferred income tax

Current income tax

The tax expense for the period comprises current and deferred tax. Tax is recognised in the income statement,except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In thiscase, the tax is also recognised in other comprehensive income or directly in equity, respectively.

Business combinations in which all of the combining entities or businesses are ultimately controlled by the sameparty or parties both before and after the business combination (and where that control is not transitory) are referredto as common control transactions. The accounting policy for the acquiring entity would be to account for thetransaction at book values in its consolidated nancial statements. The book values of the acquired entity are theconsolidated book values as reected in the group annual nancial statements of the selling entity. The excess of thecost of the transaction over the acquirer’s proportionate share of the net asset value acquired in common controltransactions, will be allocated to the existing business combination reserve in equity. Where comparative periods arepresented, the nancial statements and nancial information are not restated. Accounting policies of the subsidiarieshave been changed were necessary to reect the accounting policies of the group.

Associates are all entities over which the Group has signicant inuence but not control, generally accompanying ashareholding of between 20% and 50% of the voting rights. Investments in associates are accounted for using theequity method of accounting. Under the equity method, the investment is initially recognised at cost, and thecarrying amount is increased or decreased to recognise the investor's share of the prot/loss and othercomprehensive income of the investee after the date of acquisition.

Changes in ownership interests in subsidiaries without change of control

Inter-company transactions, balances and unrealised gains on transactions between Group companies areeliminated. Unrealised losses are also eliminated. When necessary, amounts reported by subsidiaries have beenadjusted to conform with the Group’s accounting policies.

Any contingent consideration to be transferred by the Group is recognised at fair value at the acquisition date.Subsequent changes to the fair value of the contingent consideration that is deemed to be an asset or liability isrecognised in accordance with IAS 39 either in prot or loss or as a change to other comprehensive income.Contingent consideration that is classied as equity is not re-measured, and its subsequent settlement is accountedfor within equity.

Disposal of subsidiaries

When the Group ceases to have control, any retained interest in the entity is remeasured to its fair value at the datewhen control is lost, with the change in carrying amount recognised in prot or loss. The fair value is the initialcarrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint ventureor nancial asset. In addition, any amounts previously recognised in other comprehensive income in respect of thatentity are accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean thatamounts previously recognised in other comprehensive income are reclassied to prot or loss.

The current income tax charge is calculated on the basis of the applicable tax laws in the respective jurisdiction andit consists of Company Income Tax, Education Tax and NITDEF Tax. Company Income Tax is assessed at 30%statutory rate of total prot, Education Tax is computed as 2% of assessable prot while NITDEF tax is a 1% levy onProt Before Tax of the Bank. The Group periodically evaluates positions taken in tax returns; ensuring informationdisclosed are in agreement with the underlying tax liability which has been adequately provided for in the nancialstatements.

Transactions with non-controlling interests that do not result in loss of control are accounted for as equitytransactions – that is, as transactions with the owners in their capacity as owners. The difference between fair valueof any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary isrecorded in equity. Gains or losses on disposals to non-controlling interests are also recorded in equity.

Associates

Common control transactions




Deferred income tax

2.6 Financial assets and liabilities

2.6.1 Financial assets

a. Financial assets at fair value through prot or loss

i

ii

Deferred income tax assets are recognised only to the extent that it is probable that future taxable prot will beavailable against which the temporary differences can be utilised. Deferred income tax liabilities are provided ontaxable temporary differences arising from investments in subsidiaries, associates and joint arrangements, except fordeferred income tax liability where the timing of the reversal of the temporary difference is controlled by the Groupand it is probable that the temporary difference will not reverse in the foreseeable future.

The Group classies its nancial instruments in the following categories: at fair value through prot or loss, loansand receivables, held to maturity and available for sale. The classication depends on the purpose for which thenancial assets were acquired and their characteristics and is in accordance with IAS 39.

Financial assets at fair value through prot or loss are nancial assets held for trading and those designated by theGroup as at fair value through prot or loss upon initial recognition.

Deferred income tax assets are recognised on deductible temporary differences arising from investments insubsidiaries, associates and joint arrangements only to the extent that it is probable the temporary difference willreverse in the future and there is sufcient taxable prot available against which the temporary difference can beutilised.

Deferred income tax is provided in full, using the liability method, on temporary differences arising between the taxbases of assets and liabilities and their carrying amounts in the consolidated nancial statements. However, deferredtax liabilities are not recognised if they arise from the initial recognition of goodwill; deferred income tax is notaccounted for i t arises from initial recognition of an asset or liability in a transaction other than a businesscombination that at the time of the transaction affects neither accounting nor taxable prot or loss. Deferred incometax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of thereporting period and are expected to apply when the related deferred income tax asset is realized or the deferredincome tax liability is settled.

Financial assets classied as held for trading

Financial assets and liabilities classied as held for trading are those assets and liabilities that Group acquires orincurs principally for the purpose of selling or repurchasing in the near term or holds as part of a portfolio that ismanaged together for short-term prot. Trading assets and liabilities are initially recognised and subsequentlymeasured at fair value in the statement of nancial position with transactions costs recognised in prot or loss. Allchanges in fair value are recognised as part of net trading income in prot or loss.

Designation at fair value through prot or loss

The Group designates certain nancial assets upon initial recognition as at fair value through prot or loss (fair valueoption). This designation cannot subsequently be changed. According to IAS 39, the fair value option is only appliedwhen the following conditions are met:

· the application of the fair value option reduces or eliminates an accounting mismatch that would otherwise ariseor· the nancial assets are part of a portfolio of nancial instruments which is risk managed and reported to seniormanagement on a fair value basis or· the nancial assets consists of debt host and an embedded derivative that must be separated.

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current taxassets against current tax liabilities and when the deferred income taxes assets and liabilities relate to taxes leviedby the same taxation authority on either the same taxable entity or different taxable entities where there is anintention to settle the balances on a net basis.





16

b. Loans and receivables

c. Held-to-maturity nancial assets

d. Available-for-sale nancial assets

In the consolidated statement of cash ows, cash and cash equivalents includes cash in hand, deposits held at callwith banks, other short-term highly liquid investments with original maturities of three months or less and bankoverdrafts.

· Sales or reclassication that are so close to maturity that changes on the market rate o nterest would not havea signicant effect on the nancial asset’s fair value.· Sales or reclassication after the Group has collected substantially all the asset’s original principal.· Sales or reclassication attributable to non-recurring isolated events beyond the Group’s control that could nothave been reasonably anticipated.

Cash and cash equivalents include notes and coins on hand, unrestricted balances held with central banks, balancesheld with other banks , money market placements and highly liquid nancial assets with original maturities o essthan three months, which are subject to insignicant risk of changes in their fair value and are used by the Group inthe management o ts short-term commitments. Cash and cash equivalents are carried at amortised cost in thestatement of nancial position.

Loans and receivables are non-derivative nancial assets with xed or determinable payments that are not quoted inan active market and that the Group does not intend to sell immediately or in the near term. The Group's loans andreceivables comprises loans and advances, cash and cash equivalents and other receivables.

When the Group is the lessor in a lease agreement that transfers substantially all of the risks and rewards incidentalto ownership of an asset to the lessee, the arrangement is classied as a nance lease and a receivable equal to thenet investment in the lease is recognised and presented within loans and advances.

Financial assets for which the fair value option is applied are recognised in the statement of nancial position as‘Financial assets designated at fair value’ . Fair value changes relating to nancial assets designated at fair valuethrough prot or loss are recognised in ‘Net trading income’ .

Held-to-maturity investments are carried at amortised cost using the effective interest method. A sale orreclassication of a signicant amount of held-to-maturity investments would result in the reclassication of all held-to-maturity investments as available-for-sale and prevent the Group from classifying investment securities as held-to-maturity for the current and the following two nancial years.

However, sales and reclassications in any of the following circumstances would not trigger a reclassication:

Held-to-maturity investments are non-derivative nancial assets with xed or determinable payments and xedmaturities that the Group has the positive intent and ability to hold to maturity and which are not designated at fairvalue through prot or loss or available-for-sale.

Available-for-sale nancial assets are non-derivative investments that are not designated as another category ofnancial assets. Unquoted equity securities whose fair value cannot be reliably measured are carried at cost. Allother available-for-sale investments are carried at fair value.

Interest income is recognised in prot or loss using the effective interest method. Dividend income is recognised inprot or loss when the Group becomes entitled to the dividend. Foreign exchange gains or losses on available-for-sale debt security investments are recognised in prot or loss. Other fair value changes are recognised directly inother comprehensive income until the investment is sold or impaired whereupon the cumulative gains and lossespreviously recognised in other comprehensive income are recognised in prot or loss as a reclassication adjustment.

When the Group purchases a nancial asset and simultaneously enters into an agreement to resell the asset (or asubstantially similar asset) at a xed price on a future date (“reverse repo or stock borrowing”), the arrangement isaccounted for as a loan or advance, and the underlying asset is not recognised in the Group’s nancial statements.





17

2.6.2 Financial Liabilities

2.6.3 Recognition and measurement

2.7 Offsetting nancial instruments

2.8 Assets pledged as collateral

Financial assets transferred to external parties that do not qualify for de-recognition are reclassied in the statementof nancial position from investment securities to assets pledged as collateral, if the transferee has received the rightto sell or re-pledge them in the event of default from agreed terms.

Initial recognition of assets pledged as collateral is at fair value, whilst subsequent measurement is based on theclassication of the nancial asset. Assets pledged as collateral are either designated as available for sale or held tomaturity. Where the assets pledged as collateral are designated as available for sale, subsequent measurement is atfair-value through equity. Assets pledged as collateral designated as held to maturity are measured at amortisedcost.

Financial assets and liabilities are set off and the net amount reported in the statement of nancial position when theGroup has a legally enforceable right to set off the recognised amounts and there is an intention to settle on a netbasis or realise the asset and settle the liability simultaneously. The legally enforceable right must not be contingenton future events and must be enforceable in the normal course of business and in the event of default, insolvency orbankruptcy of the counterparty.

Income and expenses are presented on a net basis only when permitted under IFRSs or for gains and losses arisingfrom a group of similar transactions such as in the Group's trading activity.

These consists of nancial liabilities at fair value through prot or loss and nancial liabilities at amortised cost.Financial liabilities that are not classied as at fair value through prot or loss are measured at amortised cost.Interest expenditure is recognised in interest expense. The Bank's non-derivative nancial liabilities consists of dueto other nancial institutions, deposits from customers, borrowings from local and foreign institutions, accruals andother liabilities. Such liabilities are recognised initially at fair value plus any directly attributable transaction costs.Subsequent to initial recognition, these nancial liabilities are recognised at amortized cost using the effectiveinterest method. The Bank derecognises a nancial liability when its contractual obligations are discharged orcancelled or expired.

Regular purchases and sales of nancial assets are recognised on the settlement date. Investments are initiallyrecognised at fair value plus transaction costs for all nancial assets not carried at fair value through prot or loss.Financial assets carried at fair value through prot or loss are initially recognised at fair value and transaction costsare expensed in the income statement. Financial assets are derecognised when the rights to receive cash ows fromthe investments have expired or have been transferred and the group has transferred substantially all risks andrewards of ownership. Available-for-sale nancial assets and nancial assets at fair value through prot or loss aresubsequently carried at fair value. Loans and receivables are subsequently carried at amortised cost using theeffective interest method. Non-trade nancial liabilities are measured at amortised cost. Liabilities held for tradingare measured at fair value.

Gains or losses arising from changes in the fair value of the ‘nancial assets at fair value through prot or loss’category are presented in the income statement within ‘net trading income’ in the period in which they arise.Dividend income from nancial assets at fair value through prot or loss is recognised in the income statement aspart of other operating income when the group’s right to receive payments is established. Changes in the fair valueof nancial instruments classied as available-for-sale are recognised in other comprehensive income (OCI).

When securities classied as available for sale are sold or impaired, the accumulated fair value adjustmentsrecognised in equity are included in the income statement as ‘other operating income’ .

Interest on available-for-sale securities calculated using the effective interest method is recognised in the incomestatement as part of interest income. Dividends on available-for-sale equity instruments are recognised in theincome statement as part of other operating income when the group’s right to receive payments is established.

A non-derivative nancial asset may be reclassied from the available-for-sale category to the loans and receivablecategory if it otherwise would have met the definition of loans and receivables and if the Group has the intention andability to hold that nancial asset for the foreseeable future or until maturity.





18

2.9 Impairment of nancial assets

a. Assets carried at amortised cost

The Group assesses at each reporting date whether there is objective evidence that a nancial asset or group ofnancial assets is impaired. A nancial asset or group of nancial assets is impaired and impairment losses areincurred only if there is objective evidence o mpairment as a result of one or more events that occurred after theinitial recognition of the asset (a 'loss event') and that loss event (or events) has an impact on the estimated futurecash ows of the nancial asset or group of nancial assets that can be reliably estimated.

Evidence o mpairment may include indications that the debtors or a group of debtors is experiencing signicantnancial difculty, default or delinquency in interest or principal payments, the probability that they will enterbankruptcy or other nancial reorganisation, and where observable data indicate that there is a measurable decreasein the estimated future cash ows, such as changes in arrears or economic conditions that correlate with defaults.

The estimated period between a loss occurring and its identication is determined by local management for eachidentied portfolio. In general, the periods used vary between three months and twelve months; in exceptionalcases, longer periods are warranted.

The Group rst assesses whether objective evidence o mpairment exists individually for nancial assets that areindividually signicant and individually or collectively for nancial assets that are not individually signicant. If theGroup determines that no objective evidence o mpairment exists for an individually assessed nancial asset,whether signicant or not, it includes the asset in a group of nancial assets with similar credit risk characteristicsand collectively assesses them for impairment. Assets that are individually assessed for impairment and for which animpairment loss is or continues to be recognised are not included in a collective assessment o mpairment.

The amount of the loss is measured as the difference between the asset’s carrying amount and the present value ofestimated future cash ows (excluding future credit losses that have not been incurred) discounted at the nancialasset's original effective interest rate. The carrying amount of the asset is reduced through the use of an allowanceaccount and the amount of the loss is recognised in the consolidated income statement. If a loan or held-to-maturityinvestment has a variable interest rate, the discount rate for measuring any impairment loss is the current effectiveinterest rate determined under the contract. As a practical expedient, the Group may measure impairment on thebasis of an instrument’s fair value using an observable market price.

The calculation of the present value of the estimated future cash ows of a collateralized nancial asset reects thecash ows that may result from foreclosure less costs for obtaining and selling the collateral, whether or notforeclosure is probable.

Estimates of changes in future cash ows for groups of assets should reect and be directionally consistent withchanges in related observable data from period to period (for example, changes in unemployment rates, propertyprices, payment status, or other factors indicative of changes in the probability o osses in the Group and theirmagnitude). The methodology and assumptions used for estimating future cash ows are reviewed regularly by theGroup to reduce any differences between loss estimates and actual loss experience.

Future cash ows in a group of nancial assets that are collectively evaluated for impairment are estimated on thebasis of the contractual cash ows of the assets in the Group and historical loss experience for assets with credit riskcharacteristics similar to those in the Group. Historical loss experience is adjusted on the basis of current observabledata to reect the effects of current conditions that did not affect the period on which the historical loss experience isbased and to remove the effects of conditions in the historical period that do not currently exist.

For the purposes of a collective evaluation o mpairment, nancial assets are grouped on the basis of similar creditrisk characteristics (that is, on the basis of the Group’s grading process that considers asset type, industry,geographical location, collateral type, past-due status and other relevant factors). Those characteristics are relevantto the estimation of future cash ows for groups of such assets by being indicative of the debtors’ ability to pay allamounts due according to the contractual terms of the assets being evaluated.

When a loan is uncollectible, it is written off against the related allowance for loan impairment. Such loans arewritten off after all the necessary procedures have been completed and the amount of the loss has been determined.Impairment charges relating to loans and advances to customers are classied in loan impairment charges whilstimpairment charges relating to investment securities (held to maturity category) are classied in ‘impairmentcharges on other nancial assets ’ .





19

b. Assets classied as available for sale

2.10 Interest income and expense

2.11 Fees and commission income

Fees and commission that are integral to the effective interest rate on a nancial asset are included in themeasurement of the effective interest rate. Fees, such as processing and management fees charged for assessing thenancial position of the borrower, evaluating and reviewing guarantee, collateral and other security, negotiation ofinstruments’ terms, preparing and processing documentation and nalising the transaction are an integral part of theeffective interest rate on a nancial asset or liability and are included in the measurement of the effective interestrate of nancial assets or liabilities.

Other fees and commissions which relates mainly to transaction and service fees, including loan account structuringand service fees, investment management and other duciary activity fees, sales commission, placement line fees,syndication fees and guarantee issuance fees are recognised as the related services are provided or performed.

If any such evidence exists for available-for-sale nancial assets, the cumulative loss – measured as the differencebetween the acquisition cost and the current fair value, less any impairment loss on that nancial asset previouslyrecognised in prot or loss – is removed from equity and recognised in the income statement. Impairment lossesrecognised in the consolidated income statement on equity instruments are not reversed through the consolidatedincome statement.

Interest income and expense presented in the income statement include:· Interest on nancial assets and liabilities measured at amortised cost calculated on an effective interest ratebasis;· Interest on nancial assets measured at fair value through prot or loss calculated on an effective interest ratebasis;· Interest on nancial assets measured at fair value through OCI calculated on an effective interest rate basis.

Interest income and expense for all interest-earning and interest-bearing nancial instruments are recognised in theincome statement within “interest income” and “interest expense” using the effective interest method.

The effective interest rate is the rate that exactly discounts the estimated future cash payments and receipts throughthe expected life of the nancial asset or liability (or, where appropriate, the next re-pricing date), to the net carryingamount of the nancial asset or liability. When calculating the effective interest rate, the Group estimates future cashows considering all contractual terms of the nancial instrument but not future credit losses. The calculation of theeffective interest rate includes contractual fees and points paid or received, transactions costs and discounts orpremiums that are an integral part of the effective interest rate. Transaction costs are incremental costs that aredirectly attributable to the acquisition, issue or disposal of a nancial asset or liability.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectivelyto an event occurring after the impairment was recognised (such as an improvement in the debtor’s credit rating),the reversal of the previously recognised impairment loss is recognised in the consolidated income statement.

The Group assesses at the end of each reporting period whether there is objective evidence that a nancial asset or agroup of nancial assets is impaired. For equity investments classied as available for sale, a signicant or prolongeddecline in the fair value of the security below its cost is objective evidence of impairment resulting in the recognitionof an impairment loss.

If, in a subsequent period, the fair value of a debt instrument classied as available for sale increases and theincrease can be objectively related to an event occurring after the impairment loss was recognised in prot or loss,the impairment loss is reversed through the income statement. Assets classied as available for sale are assessed forimpairment in the same manner as assets carried at amortised cost.





20

2.12 Net trading income

2.13 Dividend income

2.14 Impairment of non-nancial assets

2.15 Non-current assets (or disposal groups) held for sale

2.16 Leases

a. Group is the lessee

i Operating lease

Any impairment loss in a disposal group is allocated rst to goodwill and then to the remaining assets and liabilitieson a prorata basis except that loss is allocated to inventories, deferred tax assets, employee benets and investmentproperty which continue to be measured in accordance with the group's accounting policies.

Dividend income is recognised when the right to receive income is established. Dividends are reected as acomponent of other operating income.

Net trading income comprises all fair value changes, net fair value gain on derivative instrument, and foreignexchange translation and trading gains/losses.

Non-current assets (or disposal groups) are classied as assets held for sale when their carrying amount is to berecovered principally through a sale transaction and a sale is considered highly probable. They are stated at thelower of carrying amount and fair value less costs to sell.

An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised inprior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists.An impairment loss is reversed if there has been a change in the estimates used to determine the recoverableamount only to the extent that the asset’s carrying amount does not exceed the carrying amount that would havebeen determined, net of depreciation or amortisation, if no impairment loss had been recognised.

The recoverable amount of an asset or cash-generating unit is the greater o ts value in use and its fair value lesscosts to sell. In assessing value in use, the estimated future cash ows are discounted to their present value using apre-tax discount rate that reects current market assessments of the time value of money and the risks specic tothe asset.

An impairment loss is recognised in the income statement if the carrying amount of an asset or its cash generatingunit exceeds its recoverable amount. A cash generating unit is the smallest identiable asset group that generatescash ows that largely are independent from other assets and groups. Impairment losses recognised in respect ofcash-generating units are allocated rst to reduce the carrying amount of any goodwill allocated to the units andthen to reduce the carrying amount of the other assets in the unit (group of units) on a pro rata basis.

The carrying amounts of the Group’s non-nancial assets, inclusive of deferred tax assets are reviewed at eachreporting date to determine whether there is any indication o mpairment. If any such indication exists then theasset’s recoverable amount is estimated. For goodwill and intangible assets that have indenite useful lives or thatare not available for use, the recoverable amount is estimated each year.

Leases in which a signicant portion of the risks and rewards of ownership are retained by another party, the lessor,are classied as operating leases. Payments, including prepayments, made under operating leases (net of anyincentives received from the lessor) are charged to the income statement on a straight-line basis over the period ofthe lease. When an operating lease is terminated before the lease period has expired, any payment required to bemade to the lessor by way of penalty is recognised as an expense in the period in which termination takes place.

Leases are accounted for in accordance with IAS 17, 'Leases' and IFRIC 4, 'Determining whether an arrangementcontains a lease'. They are divided into nance leases and operating leases.





21

ii Finance lease

b.

2.17 Property, plant and equipment

i. Recognition and measurement

ii. Subsequent costs

iii. Depreciation

Depreciation is recognised in the income statement on a straight-line basis to write down the cost of each asset, totheir residual values over the estimated useful lives of each part of an item of property, plant and equipment. Leasedassets under nance lease are depreciated over the shorter of the lease term and their useful lives.

The cost of replacing part of an item of property, plant or equipment is recognised in the carrying amount of the itemi t is probable that the future economic benets embodied within the part will ow to the Group and its cost can bemeasured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance arecharged to the income statement during the nancial period in which they are incurred.

Leases, where the Group has substantially all the risks and rewards of ownership, are classied as nance leases.Finance leases are capitalised at the lease’s commencement at the lower of the fair value of the leased property andthe present value of the minimum lease payments. Each lease payment is allocated between the liability and nancecharges so as to achieve a constant rate on the outstanding balance of the nance lease.

Depreciation begins when an asset is available for use and ceases at the earlier of the date that the asset isderecognised or classied as held for sale in accordance with IFRS 5. A non-current asset or disposal group is notdepreciated while it is classied as held for sale.

The Group recognizes items of property, plant and equipment at the time the cost is incurred. These costs includecosts incurred initially to acquire or construct an item of property, plant and equipment as well as the costs o tsdismantlement, removal or restoration, the obligation for which an entity incurs as a consequence of using the itemduring a particular period.

The assets’ carrying values and useful lives are reviewed, and written down if appropriate, at each reporting date.Assets are impaired whenever events or changes in circumstances indicate that the carrying amount is less than therecoverable amount.

The corresponding rental obligations, net of nance charges, are included in other liabilities. The interest element ofthe nance cost is charged to the income statement over the lease period so as to produce a constant periodic rateo nterest on the remaining balance of the liability for each period. Investment properties acquired under nancelease are measured subsequently at their fair value.

Items of property and equipment are measured at cost less accumulated depreciation and impairment losses. Costincludes expenditures that are directly attributable to the acquisition of the asset. When parts of an item of propertyor equipment have different useful lives, they are accounted for as separate items (major components) of propertyand equipment.

Group is the lessor

When assets are leased to a third party under nance lease terms, the present value of the lease income isrecognised as a receivable. The difference between the gross receivable and the present value of the receivable isrecognised as unearned nance income. Lease income is recognised over the term of the lease using the netinvestment method (before tax), which reects a constant periodic rate of return.





22

iv. Derecognition

2.18 Intangible assets

Goodwill

Software

Software acquired by the Group is stated at cost less accumulated amortisation and accumulated impairment losses.Expenditure on internally developed software is recognised as an asset when the Group is able to demonstrate itsintention and ability to complete the development and use the software in a manner that will generate futureeconomic benets, and can reliably measure the costs to complete the development.

include all costs directly attributable to developing the software and capitalised borrowing costs, and are amortisedover its useful life. Internally developed software is stated at capitalised cost less accumulated amortisation andimpairment.

Leasehold land and buildings - Over the shorter of the useful life of 50 years or lease termLeasehold improvements - Over the shorter of the useful life of 50 years or lease termMotor vehicles - 4 yearsComputer hardware - 3 yearsFurniture and ttings - 5 yearsPlant and machinery - 5 years

Goodwill impairment reviews are undertaken annually or more frequently if events or changes in circumstancesindicate a potential impairment. The carrying value of the CGU containing the goodwill is compared to therecoverable amount, which is the higher of value in use and the fair value less costs of disposal. Any impairment isrecognised immediately as an expense and is not subsequently reversed. Gains and losses on the disposal of anentity include the carrying amount of goodwill relating to the entity sold.

An item of property and equipment is derecognised on disposal or when no future economic benets are expectedfrom its use or disposal. Any gain or loss arising on de-recognition of the asset (calculated as the difference betweenthe net disposal proceeds and the carrying amount of the asset) is included in the income statement in the year theasset is derecognised.

Goodwill arises on the acquisition of subsidiaries and represents the excess of the cost of the acquisition over theGroup's interest in the net fair value of the identiable assets, liabilities and contingent liabilities of the acquiredsubsidiaries at the date of acquisition. When the excess is negative, it is recognised immediately in prot or loss.Goodwill on acquisition of subsidiaries is included in intangible assets.

For the purpose o mpairment testing, goodwill acquired in a business combination is allocated to each of the CGUs,or groups of CGUs, that is expected to benet from the synergies of the combination. Each unit or group of units towhich the goodwill is allocated represents the lowest level within the entity at which the goodwill is monitored forinternal management purposes. Goodwill is monitored at the operating segment level.

The estimated useful lives for the current and comparative periods are as follows:

Depreciation rates, methods and the residual values underlying the calculation of depreciation o tems of property,plant and equipment are kept under review on an annual basis to take account of any change in circumstances.

Capital work in progress is not depreciated. Upon completion it is transferred to the relevant asset category.Depreciation methods, useful lives and residual values are reassessed at each reporting date.

Subsequent expenditure on software assets is capitalised only when it increases the future economic benetsembodied in the specic asset to which it relates. All other expenditure is expensed as incurred.

Development costs previously expensed cannot be capitalised.The capitalised costs of internally developed software





23

2.19 Employee benets

Dened contribution plans

Dened benet plans

Termination benets

Short-term employee benets

Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged orcredited to equity in other comprehensive income in the period in which they arise.

The current service cost of the dened benet plan, recognised in the income statement in employee benetexpense, except where included in the cost of an asset, reects the increase in the dened benet obligationresulting from employee service in the current year, benet changes curtailments and settlements.

Amortisation method, useful lives, and residual values are reviewed at each nancial year-end and adjusted ifappropriate.

For dened contribution plans, the Group pays contributions to publicly or privately administered pension fundadministrators (PFA) on a mandatory, contractual or voluntary basis. The Group has no further payment obligationsonce the contributions have been paid. The contributions are recognised as employee benet expense in the incomestatement when they are due. Prepaid contributions are recognised as an asset to the extent that a cash refund or areduction in the future payments is available.

Past-service costs are recognised immediately in the income statement. The net interest cost is calculated byapplying the discount rate to the net balance of the dened benet obligation. This cost is included in employeebenet expense in the income statement.

Short-term employee benet obligations are measured on an undiscounted basis and are expensed as the relatedservice is provided. A liability is recognised for the amount expected to be paid under short-term cash bonus or prot-sharing plans if the Group has a present legal or constructive obligation to pay this amount as a result of past serviceprovided by the employee and the obligation can be estimated reliably.

A dened contribution plan is a pension plan under which the Group pays xed contributions to a separate entity.The Group has no legal or constructive obligations to pay further contributions if the fund does not hold sufcientassets to pay all employees the benets relating to employee service in the current and prior periods.

A dened benet plan is a pension plan that denes an amount of pension benet that an employee will receive onretirement, usually dependent on one or more factors, such as age, years of service and compensation. The liabilityrecognised in the statement of nancial position in respect of dened benet pension plans is the present value ofthe dened benet obligation at the end of the reporting period. The dened benet obligation is calculated annuallyby independent actuaries using the projected unit credit method. The present value of the dened benet obligationis determined by discounting the estimated future cash outows using interest rates of high-quality corporate bondsthat are denominated in the currency in which the benets will be paid, and that have terms to maturityapproximating the terms of the related pension liability.

Termination benets are recognised as an expense when the Group is demonstrably committed, without realisticpossibility of withdrawal, to a formal detailed plan to terminate employment before the normal retirement date.Termination benets for voluntary redundancies are recognised if the Group has made an offer encouragingvoluntary redundancy, it is probable that the offer will be accepted, and the number of acceptances can be estimatedreliably.

Amortisation is recognised in prot or loss on a straight-line basis over the estimated useful life of the software, fromthe date that it is available for use since this most closely reects the expected pattern of consumption of the futureeconomic benets embodied in the asset. The estimated useful life of software is 3 years.





24

2.20 Provisions

2.21 Financial guarantees

2.22 Share capital

Ordinary shares are classied as equity.

Share issue costs

Dividends on the Bank's ordinary shares

A provision for onerous contracts is recognised when the expected benets to be derived by the Group from acontract are lower than the unavoidable cost of meeting its obligations under the contract. The provision is measuredat the present value of the lower of the expected cost of terminating the contract and the expected net cost ofcontinuing with the contract. Before a provision is established, the Group recognises any impairment loss on theassets associated with that contract.

Dividends proposed by the Directors but not yet approved by members are disclosed in the nancial statements inaccordance with the requirements of the Company and Allied Matters Act.

Incremental costs directly attributable to the issue of new shares or options or to the acquisition of a business areshown in equity as a deduction, net of tax, from the proceeds.

Dividends on the Bank's ordinary shares are recognised in equity in the period in which they are approved by theBank’s shareholders. Dividends for the year that are declared after the date of the consolidated statement of nancialposition are dealt with in the subsequent events note.

Where the Bank or any member of the Group purchases the Bank’s equity share capital (treasury shares), theconsideration paid, including any directly attributable incremental costs (net o ncome taxes) is deducted fromequity attributable to the Bank’s equity holders until the shares are cancelled or reissued. Where such ordinaryshares are subsequently reissued, any consideration received, net of any directly attributable incremental transactioncosts and the related income tax effects, is included in equity attributable to the company’s equity holders.

A provision is recognized if, as a result of a past event, the Group has a present legal or constructive obligation thatcan be estimated reliably, and it is probable that an outow of economic benets will be required to settle theobligation. Provisions are determined by discounting the expected future cash ows at a pre-tax rate that reectscurrent market assessments of the time value of money and, where appropriate, the risks specic to the liability.

Financial guarantee contracts are contracts that require the issuer to make specied payments to reimburse theholder for a loss it incurs because a specied debtor fails to make payments when due in accordance with the termsof a debt instrument.

Financial guarantees are initially recognised in the consolidated nancial statements at their fair values on the datethat the guarantee was given; and the initial fair value amortised over the life of the nancial guarantee. Theguarantee liability is subsequently carried at the higher of this amortised amount and the present value of anyexpected payment (when a payment under the guarantee has become probable).

A provision for restructuring is recognised when the Group has approved a detailed and formal restructuring plan,and the restructuring either has commenced or has been announced publicly. The Group recognizes no provision forfuture operating losses.





25

2.23 Earnings per share

2.24 Segment reporting

2.25 Derivatives held for risk management purposes

2.26 Borrowings

2.27 Investment properties

2.28 Trading properties

2.29 Liabilities under investment contracts

Liabilities under investment contracts are clients' funds invested on clients' behalf by the Group and are designatedas other nancial liabilities at amortised cost.

Fees paid on the establishment of borrowings are recognised as transaction costs of the borrowing to the extent thatit is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-downoccurs. To the extent that there is no evidence that it is probable that some or all of the facility will be drawn down,the fee is capitalised as a pre-payment for liquidity services and amortised over the period of the facility to which itrelates.

Derivatives held for risk management purposes include all derivative assets and liabilities that are not classied astrading assets or liabilities. Derivatives are recognised initially at fair value; attributable transaction costs arerecognised in prot or loss when incurred. Subsequent to initial recognition, derivatives are measured at fair valuewith changes in fair value recognised in prot or loss (net trading income).

Investment property is property held either to earn rental income or for capital appreciation or for both, but not forsale in the ordinary course of business, use in the production of goods and services or for administrative purposes.Investment property is measured initially at cost, including transaction costs. Subsequent to initial recognition,investment properties are carried in the statement of nancial position at their market value and revalued yearly ona systematic basis.

Trading properties are properties developed for sale. Trading properties are measured at the lower of cost and netrealisable value. The cost of trading properties includes expenditure incurred in acquiring the properties, productionor conversion costs and other costs incurred in bringing them to their existing location and condition. The netrealisable value is the estimated selling price in the ordinary course of business less the estimated cost to sell.

Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequentlycarried at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption valueis recognised in the income statement over the period of the borrowings using the effective interest method.

The Group presents basic and diluted earnings per share (EPS) for its ordinary shares. Basic EPS is calculated bydividing the prot or loss attributable to ordinary shareholders of the Group by the weighted average number ofordinary shares outstanding during the period.

Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding toassume conversion of all dilutive potential ordinary shares.

An operating segment is a component of the Group that engages in business activities from which it can earnrevenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’sother components, whose operating results are reviewed regularly by the Executive Management Committee to makedecisions about resources allocated to each segment and assess its performance, and for which discrete nancialinformation is available. All costs that are directly traceable to the operating segments are allocated to the segmentconcerned, while indirect cost are allocated based on the benets derived from such costs.





26


3. Financial risk management

3.1 Credit risk

3.1.1 Maximum exposure to credit risk before collateral held or credit enhancements

Credit risk maximum exposure relating to on-balance sheet items

31 December 31 December 31 December 31 December2015 2014 2015 2014

160,989 248,035 160,324 207,040Due from banks and other financial institutions 37,031 72,978 35,617 56,114Financial assets held for trading - debt securities 131 16,055 131 1,384Derivative financial assets 178 - - -Loans and advances to customers:- Term loans 562,470 500,541 558,500 471,083- Overdraft 98,801 111,167 98,278 98,942- Finance lease receivables 43,625 34,066 43,625 28,172

Investment securities - debt securities:- Available for sale investments 5,335 78 2,628 -- Held to maturity investments 50,756 125,101 43,031 72,687- Loans and receivables investments 34,949 36,058 33,919 18,387

Asset pledged as collateral - debt securities 68,701 90,170 68,701 34,066Other assets 1,360 6,473 7,095 6,594

1,064,326 1,240,722 1,051,849 994,469

Loans exposure to total credit risk exposure 66% 52% 67% 60%15% 22% 14% 13%

Other exposures to total credit risk exposure 19% 26% 19% 27%

Credit exposures relating to off-balance sheet items


Bonds and guarantees 75,339 64,983 75,280 61,664Letters of credit 31,352 17,691 31,352 15,608

106,691 82,674 106,632 77,272

Total maximum exposure 1,171,017 1,323,396 1,158,481 1,071,741

Group Bank

Debt securities exposure to total credit risk exposure

The table above shows a worst-case scenario of credit risk exposure to the Group as at 31 December 2015 and 31December 2014 without taking account of any collateral held or other credit enhancements attached. For on-balance-sheetassets, the exposures set out above are based on amounts reported in the statement of nancial position.

Group Bank

The Group's maximum exposure to credit risk at 31 December 2015 and 31 December 2014 respectively is represented bythe carrying amounts of the nancial assets in the statement of nancial position.

Cash and balances with central banks





27


3.1.2 Credit quality of nancial assets using external ratings

Counterparties with external credit rating (S&P)- A- AA- B- BB

Sovereign ratings- Nigeria (B+) S&P-Other Sovereign Ratings

Counterparties without external credit ratings- Local discount houses-Foreign subsidiaries

Total

Financial assets held for trading

Sovereign ratings- Nigeria (B+) S&P

Sovereign ratings- Nigeria (B+) S&P-Other Sovereign Ratings

Counterparties without external credit ratings- Corporate bonds

Total

Assets pledged as collateralSovereign ratings

- Nigeria (B+) S&P-Other Sovereign Ratings

Counterparties without external credit ratings- Corporate bonds

The credit quality of balances due from banks and other nancial institutions are assessed by reference to external credit

ratings information about counterparty default rates.

Due from other banks and other nancial institutions

IFRS 7, 'Financial instruments: disclosures', requires information about the credit quality of nancial assets. This information is provided below for balances

The credit quality of debt investment securities (available for sale, held to maturities and loans and receivables) are assessed by reference to external credit

Investment securities - Debt


20,998 48,812 19,838 41,319189 82 189 82

4,087 7,874 4,087 7,874- 337 - 337

25,274 57,105 24,114 49,612

11,757 6,502 11,503 6,502- 938 - -

11,757 7,440 11,503 6,502

- 39 - -- 8,394 - -- 8,433 - -

37,031 72,978 35,617 56,114


131 16,055 131 1,384

Group Bank

Group Bank


56,091 143,640 45,658 72,68731,862 17,457 30,945 18,247

87,953 161,097 76,603 90,934

3,087 140 2,975 1403,087 140 2,975 140

91,040 161,237 79,578 91,074

55,164 - 55,164 -12,731 90,170 12,731 34,066

806 806 -68,701 90,170 68,701 34,066

Group Bank

due from banks and nancial institutions and debt investment securities.

ratings information about counterparty default rates.





28

3.1.3 Credit risk concentration

Concentration risk refers to the risk arising from an uneven distribution of counterparties within a credit portfolio or fromconcentration in sectors, geographical locations etc which poses a potential threat to the solvency of the counterparty.

The Group recognizes that concentration risk may exist among loans, which though may have been prudentlyunderwritten, are collectively sensitive to the same economic and nancial or business development events, such that anegative development affecting these factors may cause loans to perform as if it were a single, large exposure.

IFRS 7 requires disclosures about concentrations of credit risk. Concentration of credit risk arise from nancial instrumentsthat have similar characteristics and are affected similarly by changes in economic or other conditions. This informationhas been provided along geographical areas and economic sectors.

The Group complies fully with all regulatory portfolio concentration limits as determined by the CBN. The Group setsinternal thresholds, which are more conservative than the regulatory limits and this acts as a buffer to ensure compliance.In addition to regulatory limits, the Group uses risk-based measurement systems to dene a variety of concentrationthresholds for its credit portfolio. These include; sectors, geographical locations, strategic business units etc.





29

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40

3.1.4 Analysis by security

Secured against real estate

Secured by shares

Cash collateral

Otherwise secured

Unsecured

Sensitivity of exposure at default to changes in loan loss impairment

a Sensitivity of exposure at default - probability at default (PD)

Increase

Decrease

b Sensitivity of exposure at default - loss given default (LGD)

Increase

Decrease

Exposure at default as stated on the statement of nancial position is subject to interplay of three keyvariables: probability of default, loss given default and emergence period. Therefore changes to these threekey variables would directly impact the exposure at default as at reporting date.

The Group carried out the following activities in assessing the sensitivity of the Group’s profit to fluctuationsin the probability of default and emergence period.

As at 31 December 2015, if the probability of default increased or decreased by 5%, with all other variables(exposure at default and loss given default) held constant, the impact on impairment charge, whichultimately affects loss before tax and exposure at default, would have been as set out in the tables below:

The Group in assessing the sensitivity of the Group’s profit to fluctuations in the loss given period, assumeda 5% change in the loss given default. The chosen change in the loss given default was then applied to thebank's loan portfolio as at end of the year.

As at 31 December 2015, if the loss given default increased or decreased by five percent, with all othervariables (exposure at default, probability of default and emergence period) held constant, the impact onimpairment charge, which ultimately affects loss before tax and exposure at default, would have been as setout in the tables below:


2015 2014 2015 2014

242,541 242,509 241,319 241,073

1,112 16,378 1,106 16,325

76,888 111,735 76,501 111,657

400,138 279,342 398,345 250,298

20,489 20,322 20,385 4,052

741,168 670,286 737,656 623,405

Group Bank


2015 2014 2015 2014

Pre tax Pre tax Pre tax Pre tax

298 306 288 412

(567) (559) (577) (418)

(269) (253) (289) (6)

Group Bank


2015 2014 2015 2014

Pretax Pretax Pretax Pretax

573 304 563 286

(567) (338) (577) (356)

6 (34) (14) (70)

Group Bank






3. Financial risk management continued

3.1.5


2015 2014 2015 2014

Neither past due nor impaired 602,099 567,850 599,288 519,857

Past due but not impaired 34,264 69,006 33,563 68,843

Past due and impaired 104,805 33,430 104,805 34,705

Gross 741,168 670,286 737,656 623,405

Less allowances for impairment

Specific impairment (24,487) (16,766) (25,678) (17,611)

Collective impairment (11,785) (7,746) (11,575) (7,597)

Total allowance (36,272) (24,512) (37,253) (25,208)

Net loans and advances 704,896 645,774 700,403 598,197

Each category of the gross loans and advances to customers is further analysed into product as follows:


2015 2014 2015 2014

Term loans 478,146 466,935 475,960 431,110

Overdrafts 86,432 70,052 85,996 57,899

Finance lease receivables 37,521 30,863 37,332 30,848

Neither past due nor impaired 602,099 567,850 599,288 519,857

Term loans 26,790 45,012 26,242 44,849

Overdraft 7,440 23,830 7,288 23,830

Finance lease receivables 34 164 33 164

Past due but not impaired 34,264 69,006 33,563 68,843

Term loans 78,666 12,999 78,666 14,274

Overdrafts 18,573 20,300 18,573 20,300

Finance lease receivables 7,566 131 7,566 131

Past due and impaired 104,805 33,430 104,805 34,705

741,168 670,286 737,656 623,405

The table below analyses the Group's loans and advances to customers based on the categorization of the loans and the allowancestaken on them:

Group Bank

Group Bank

Total gross loans and advances to customers

Categorisation of loans and advances to customers





41


The impairment on loans and advances to customers is further analysed as follows:

Specific impairment

Term loans

Overdrafts

Finance lease receivables

Collective impairment

Term loans

Overdrafts


Total impairment loss

Individually assessed for

impairmentCollectively assessed for

impairment

Individually assessed for

impairmentCollectively assessed for

impairment

All cash and short term funds (balances held with central bank), due from banks and other nancial institutions, nancial assetsheld for trading - debt securities, investment securities - debt securities, asset pledged as collateral - debt securities are neitherpast due nor impaired except for other assets which has past due and impaired balance of Group - N10.745 Billion (2014: N3.640Billion) and Bank - N11.165 Billion (2014: N4,914Billion) while the remaining balance are neither past due nor impaired.


2015 2014 2015 2014

14,203 5,956 14,203 6,781

9,185 10,660 10,377 10,680

1,099 150 1,098 150

24,487 16,766 25,678 17,611

8,239 6,341 8,165 6,323

3,335 1,404 3,202 1,272

211 1 208 2

11,785 7,746 11,575 7,597

36,272 24,512 37,253 25,208

Group Bank

Carrying

value before

impairment

Allowance

for

impairment

Loans &

advances

net of

impairment

Carrying

value before

impairment

Allowance

for

impairment

Loans &

advances

net of

impairment

139,069 (24,487) 114,582 132,040 (16,766) 115,274

602,099 (11,785) 590,314 538,246 (7,746) 530,500

741,168 (36,272) 704,896 670,286 (24,512) 645,774

2015Group

2014

Carrying

value before

impairment

Allowance

for

impairment

Loans &

advances

net of

impairment

Carrying

value before

impairment

Allowance

for

impairment

Loans &

advances

net of

impairment

138,368 (25,678) 112,690 132,040 (17,611) 114,429

599,288 (11,575) 587,713 491,365 (7,597) 483,768

737,656 (37,253) 700,403 623,405 (25,208) 598,197

20142015Bank

Analysis of loans and advances by category of impairment





42


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as

at

31

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(31

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3.1.7 Credit collateral continued

i. Past due but not impaired risk assets continued

Collateral repossessed

ii. Past due and impaired risk assets

Gross loans

Term loans

Overdrafts


Impairment

Term loans

Overdrafts


Net amount

Term loans

Overdrafts


FV of collateral

Term loans

Overdrafts


Amount of under-collateralisation

Term loans

Overdrafts


Amount of

undercollateralisation on

net loans

Upon initial recognition of loans and advances, the fair value of collateral is based on valuation techniquescommonly used for the corresponding assets. In subsequent periods, the fair value is assessed by reference tomarket price or indexes of similar assets.

The Group does not take physical possession of properties or other assets held as collateral and therefore therewas no repossessed collateral as at 31 December 2015 (31 December 2014: Nil). I n the unlikely event thatthe Group takes physical possession of an asset held as collateral, the asset will be carried on the Group'sbalance sheet and classied according to the Group's accounting policies.

Individually impaired loans and advances are loans for which the group determines that there is objectiveevidence of impairment and it does not expect to collect all principal and interest due according to thecontractual terms of the loan/investment security agreement(s). The breakdown of the gross amount ofindividually impaired loans and advances by class, along with the fair value of related collateral held by theGroup as security, are as follows:


2015 2014 2015 2014

78,666 12,999 78,666 15,389

18,573 20,300 18,573 19,166

7,566 131 7,566 150

104,805 33,430 104,805 34,705

(14,203) (5,956) (14,203) (6,781)

(9,185) (10,660) (10,377) (10,680)

(1,099) (150) (1,098) (150)

(24,487) (16,766) (25,678) (17,611)

65,654 7,043 64,463 8,608

8,196 9,640 8,196 8,486

6,468 (19) 6,468 -

80,318 16,664 79,127 17,094

45,810 33,792 45,810 13,011

6,917 49,168 6,917 18,931

5,256 - 5,256 -

57,983 82,960 57,983 31,942

32,856 - 32,856 2,378

11,656 - 11,656 235

2,310 131 2,310 150

46,822 131 46,822 2,763

22,334 - 21,143 -

Group Bank





46


3.1.8 Summary of collaterals held against loans and advances to customers

Upon initial recognition of loans and advances, the fair value of collateral is based on valuation techniquescommonly used for the corresponding assets. In subsequent periods, the fair value is assessed by reference to

market price or indexes of similar assets.

An estimate of the fair value of any collateral and other security enhancements held against loans and advances

to customers and due from banks and other financial institution is shown below:

31 December 2015

Against past due and impaired

Against past due but not impaired

Against neither past due nor impaired

Total

31 December 2014




Total


Property

Equities

Treasury bills

Cash

Guarantees

Negative pledge

ATC, stock hypothecation and ISPO

Others

Total


Property

Others

Total

Gross

amount

Collateral Gross

amount

Collateral

104,805 57,983 104,805 57,983

34,264 22,690 33,563 22,690

602,099 447,262 599,288 447,262

741,168 527,935 737,656 527,935

Gross

amount

Collateral Gross

amount

Collateral

33,430 82,960 34,705 31,942

69,006 68,844 68,843 68,844

567,850 583,818 519,857 518,252

670,286 735,622 623,405 619,038


2015 2014 2015 2014

22,969 33,053 22,969 19,539

- 272 - 272

- - - -

- 66 - -

- 816 - 816

- - - -

- - - -

35,014 48,753 35,014 11,315

57,983 82,960 57,983 31,942

17,314 33,137 17,314 33,137

5,376 35,707 5,376 35,707

22,690 68,844 22,690 68,844

Group

Loans and advances to

customers


customers

Group


customers


customers

Group


customers


customers

Bank

Bank

Bank





47



48






Property

Debt securities

Equities

Treasury bills

Cash

Guarantees

Negative pledge

ATC, stock hypothecation and ISPO

Others

Total

Grand total

Other than loans and advances, no collateral is held against other financial assets

124,854 101,467 124,854 64,076

- - - -

588 516 588 516

- - - -

73,179 10,035 73,179 9,688

21,205 11,005 21,205 11,005

- 15,545 - 15,545

- 85,600 - 85,600

227,436 359,650 227,436 331,822

447,262 583,818 447,262 518,252

527,935 735,622 527,935 619,038


2015 2014 2015 2014

Group


customers


customers

Bank

3.

Fin

an

cia

lri

sk

man

ag

em

en

tco

nti

nu

ed

3.1

.9D

eb

tsecu

riti

es

The

table

belo

wshow

sanaly

sis

ofdebt

securities

into

the

di e

rent

cla

ssifi

cations:

The

Gro

up’s

investm

ent

inrisk-f

ree

Govern

ment

securities

constitu

tes

95%

ofdebt

instr

um

ents

port

folio

(Decem

ber

2014:

95%

).In

vestm

ent

incorp

ora

teand

euro

bonds

accounts

for

the

outs

tandin

g5%

(Decem

ber

2014:

5%

).The

Bank’s

investm

ent

inrisk-f

ree

Govern

ment

securities

constitu

tes

95%

ofdebt

instr

um

ents

port

folio

(Decem

ber

2014:

100%

)and

investm

ent

incorp

ora

teand

euro

bonds

accounts

for

the

outs

tandin

g5%

(Decem

ber

2014:

Nil).

(All

am

ounts

inm

illions

ofN

aira

unle

ss

oth

erw

ise

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ted)

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OL

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ea

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31

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mb

er

20

15

31

Decem

ber

20

15

Federa

lgovern

ment

bonds

Sta

tegovern

ment

bonds

Corp

ora

tebonds

Tre

asury

bills

Euro

bond

31

Decem

ber

20

14

Federa

lgovern

ment

bonds

Sta

tegovern

ment

bonds

Corp

ora

tebonds

Tre

asury

bills

Euro

bonds

Fin

an

cia

l

assets

held

for

trad

ing

In

vestm

en

t

secu

riti

es

Assets

ple

dg

ed

as

co

llate

ral

Tota

lFin

an

cia

l

assets

held

for

trad

ing

In

vestm

en

t

secu

riti

es

Assets

ple

dg

ed

as

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ral

Tota

l

-44,7

19

33,8

78

78,5

97

-42,0

14

33,8

78

75,8

92

-27,7

43

12,7

31

40,4

74

-26,8

24

12,7

31

39,5

55

-3,0

87

806

3,8

93

-2,9

75

806

3,7

81

131

11,3

72

21,2

86

32,7

89

131

3,6

45

21,2

86

25,0

62

-4,1

20

-4,1

20

-4,1

20

-4,1

20

13

19

1,0

41

68

,70

11

59

,87

31

31

79

,57

86

8,7

01

14

8,4

10

Fin

an

cia

l

assets

held

for

trad

ing

In

vestm

en

t

secu

riti

es

Assets

ple

dg

ed

as

co

llate

ral

Tota

lFin

an

cia

l

assets

held

for

trad

ing

In

vestm

en

t

secu

riti

es

Assets

ple

dg

ed

as

coll

ate

ral

Tota

l

5,0

68

37,4

04

34,3

19

76,7

91

-34,1

16

15,3

91

49,5

07

-25,0

98

11,0

21

36,1

19

-18,2

47

11,0

21

29,2

68

4,3

73

7,5

57

-11,9

30

-140

-140

6,6

14

87,7

75

44,8

30

139,2

19

1,3

84

38,5

71

7,6

54

47,6

09

-3,4

03

-3,4

03

--

--

16

,05

51

61

,23

79

0,1

70

26

7,4

62

1,3

84

91

,07

43

4,0

66

12

6,5

24

Gro

up

B

an

k

Gro

up

B

an

k


49

NO

TE

S T

O T

HE

FIN

AN

CIA

L S

TA

TE

ME

NT

S

3.2 Liquidity Risk

3.2.1 Liquidity Risk Measurement

• Cash and balances with the Central Bank;

• Government Bonds and Treasury Bills

• Highly liquid instruments in the Group’s trading portfolio

Assets & Liability Mix 31 December 31 December

2015 2014

Asset components % Proportion % Proportion

Cash 4% 44,158 5% 44,765

Cash reserve 15% 153,415 24% 237,892

Treasury bills 0% 131 1% 6,614

FGN bonds & other certificates 6% 56,091 1% 5,068

Placements 1% 11,757 2% 15,166

Loans and advances 74% 741,168 67% 670,286

Total 100 1,006,720 100 979,791

Liability components % Proportion % Proportion

Current accounts 53% 324,020 51% 352,430

Savings accounts 23% 140,441 19% 129,591

Term deposits 24% 149,224 30% 210,221

Total 100 613,685 100 692,242

The measure of the Group’s liquidity is the ratio of its liquid assets to total customer deposits. The liquid assetsheld for managing liquidity risk comprise:





50



3.3 Market risk3.3.1 Market risk measurement techniques

Exposure to market risks - trading portfolios

Given that the crystalisation of trading market risk exposure is instant in most cases, board approval trading policyremains a vital tool in managing exposures on a daily basis. The policy provides for both open posion and periodic losslimits across all traded instruments, while strict policy compliance is ensured on a real time basis with the aid ofauthomated, real-time trading platform.

Typically, the bank trades in the following nancial instruments:1. Treasury bills2. Bonds3. Foreign currencies4. Money market products

Below are some of the Key variables used in quantifying, monitoring, controlling and reporting market risk exposure(traded and non traded) across the group:

• Open position assessment: - for trading and currency risk exposures.• Value at Risk model (VaR) - for trading and currency risk exposures• Expected shortfall - for trading and currency risk exposures• Interest and exchange rate sensitivity - For balance sheet level interest and exchange rate exposures assessment• Stress testing - Both trading and non-trading exposures.

The Group applies a Value at Risk (VAR) methodology to its trading portfolios (including assets and liabilities that aredesignated at fair value) to estimate the market risk exposures of open positions.

VAR is a statistically based estimate of the potential loss on the current portfolio from adverse market movements. Itexpresses the ‘maximum’ amount the Group might lose, at certain level of condence (ofte 99%) given a time horizon(usually 1 day). There is therefore a specied statistical probability (1%) that actual loss may be greater than the VARestimate. The VAR model assumes a certain ‘holding period’ until positions can be closed (1 day). The likely estimate ofthe size of 1% expected violation of the VaR number is accessed via stress testing. VaR also assumes that marketmoves occurring over this holding period will follow a similar pattern to those that have occurred in the past.

Traded Instruments: The instruments the bank's trade in are strictly provided for in the trading policy which include:Federal Government securities and foreign currencies. The policy also claries requirements for trading in new productsas well as position and loss limits at dealers and product levels.

FGN Bond Trading: The Bank bond trading portfolio consists of about eight actively traded issues of varying maturities.The correlation between trading assets components reduced quite signicantly during the year (relative to the previousyear), resulting in an appreciable increase the consequential risk reduction benet on the portfolio from 11.6% in 2014to 7.2% in 2015. The portfolio highest VaR (99% condence interval, 1 day holding period) in the course of the yearwas 4.12%, lowest at 0.38% and average 1.29% of position size.

Treasury Bills Trading: The treasury bills portfolio highest VaR (99% condence interval, 1 day holding period) was1.81%, lowest at 0.21% and average 0.76% of position size. Relative to other traded instruments, the treasury billstrading portfolio risk prole is the lowest through the year.





51


Year 2015

Year 2014

Exposure to market risks - non-trading portfolios

Decrease

Assets

Liabilities

Increase

Assets

Liabilities

The table below shows the result of interest rate sensitivity by applying a change of a 100 basis points. The impact onprot or loss is as follows:

Non trading interest rate risk exposures are present on the Group’s balance sheet, resulting from disproportionateimpact o nterest rate changes on cash ows arising from asset and liability maturity mismatches. This holds potentialto impact the Group’s earnings.

Decisions on interest rate direction is the responsibility of the ALCO, who work with the risk team in the day to daymonitoring and forecasting of interest rate directions, based on macro-economic fundamentals, market dynamics andthe monetary authority objectives.

Exposure to interest rate risk is occasioned by maturity gap, hence this is managed via maturity gap analysis, earningat risk model, together with informed interest rate forecast.

FX Trading Activities: - The Bank currency trading activity is largely limited to trading Naira/USD currency pairthroughout the nancial year, and this also reduced the Bank’s market risk exposure occasioned by currency tradingactivities. Trading activities in USD/NGN currency pair recorded the highest VaR gure (99% condence interval oneday horizon) of 3.82% of the position size, minimum of 0.59% and average of 1.29%.

The integrity of the VAR model is validated via back-testing model over a reasonable period. Although a valuable guideto risk, VAR is always viewed in the context of its limitations i.e.

• The use of historical data as a proxy for estimating future events may not be reective of the growing complexitiesand changes in the interactions of market drivers.• The holding period assumption may also be awed particularly in times of market illiquidity when it takes muchlonger to liquidate positions• The likely size o osses under the permissible 1% violation is not stated, which might exceed the bank’s lossthreshold

In adjusting for these limitations, the Group has, in addition to stress testing, adopted the expected shortfall model, togain a statistical sense of the likely size of the extreme loss events. VaR is also assessed at 99% condence intervaland a 10-day holding period as additional stress factor.

BONDS Treasury bills FX

Maximum 4.12% 1.81% 3.82%

Minimum 0.38% 0.21% 0.59%

Average 1.29% 0.76% 1.29%

BONDS Treasury bills FX

Maximum 2.81% 1.17% 3.90%

Minimum 0.31% 0.11% 0.44%

Average 0.91% 0.34% 1.39%

VaR ANALYSIS

VaR ANALYSIS

31

December

31

December

31

December

31

December2015 2014 2015 2014


(1,504) 6,715 (1,348) 6,676

(7,543) (9,092) (7,517) (9,052)

(9,047) (2,377) (8,865) (2,376)

1,504 (6,567) 1,348 (6,531)

7,543 8,884 7,517 8,884

9,047 2,317 8,865 2,353

BankGroup




52



Components of Balance Sheet Interest Rate sensitivity

Decrease

Financial assets

Due from banks and other financial institutions

Loans and advances to customers

- Available for sale investments

- Held to maturity investments

- Loans and receivables investments

Assets pledged as collateral

Financial liabilities

Due to other financial institutions

Deposits from customers

Borrowings from local and foreign institutions

Total

Increase

Financial assets

Due from banks and other financial institutions


- Available for sale investments

- Held to maturity investments

- Loans and receivables investments

Assets pledged as collateral


Due to other financial institutions


Borrowings from local and foreign institutions

Total

At 31 December 2015, if interest rates had been 100 basis points higher/lower with all other variables held constant,other components of equity would have been N52 million lower for the Group (Bank: N8 million) mainly as a result of a

decrease/increase in the fair value o xed rate debt financial assets classified as available-for-sale.

The aggregated figures presented above are further analysed into their various components as shown in the following

tables:

31

December

31

December

31

December

31

December2015 2014 2015 2014


(325) 540 (312) 540

(740) 5,177 (715) 5,165

(52) - (8) -

(126) 665 (58) 639

(28) - (22) -

(233) 333 (233) 332

(1,504) 6,715 (1,348) 6,676

290 115 278 115

6,528 7,776 6,514 7,736

725 1,201 725 1,201

7,543 9,092 7,517 9,052

(9,047) (2,377) (8,865) (2,376)

31

December

31

December

31

December

31

December2015 2014 2015 2014

325 (529) 312 (529)

740 (5,088) 715 (5,078)

52 - 8 -

126 (654) 58 (628)

28 - 22 -

233 (296) 233 (296)

1,504 (6,567) 1,348 (6,531)

(290) (113) (278) (113)

(6,528) (7,592) (6,514) (7,592)

(725) (1,179) (725) (1,179)

(7,543) (8,884) (7,517) (8,884)

9,047 2,317 8,865 2,353

Group Bank

Group Bank





53


31

December

31

December

31

December

31

December

2015 2014 2015 2014


Decrease 13 973 13 1,058

Increase (13) (973) (13) (1,058)

- - - -

3.4 Foreign exchange risk

The group operates internationally and is exposed to foreign exchange risk arising from various currency exposures

primarily with respect to the US dollar, UK pound and Euro. Foreign exchange risk represents exposures to changes in

the values of current holdings and future cash flows denominated in other currencies. The types ofi nstruments

exposed to this risk include investments in foreign subsidiaries, foreign currency-denominated loans and securities,

future cash flows in foreign currencies arising from foreign exchange transactions, foreign currency denominated debt.

In view of the current devaluation of naira, the bank also ensures that currency trading limits are in line with market

realities, foreign currency lending and funding is subject to approvals by top management. In this case the bank makes

use of limits and management action triggers for strict adherence to the Bank’s internal policies and risk appetite.Further, management ensures that repricing of the assets is in line with market realities.

The Group maintains strict policy guidance for all its foreign currency related activities, and Board approval is required

where business exigencies necessitate currency exposure creation, which must still be contained within permissible

threshold and adequately mitigated. The Group ensures that foreign currencies denominated assets are matched with

foreign currency denominated liabilities to reduce currency risk exposure (exchange exposure gap). Periodic reports on

the Group’s foreign currency exposure are rendered up to the Board level. In line with the Basel II provision, both

trading and non-trading currency exposures are treated as trading positions, and are therefore subject to fair valuation

relative to prevailing market exchange rate (mark-to-market).

Group Bank

Cash flow interest rate risk: This risk arises from the timing die rences of exposure ofi nterest rate sensitive assets and

liabilities to changes in market interest rates. The Group manages the cash flow interest rate risk by matching floating

rate assets to floating rate liabilities as much as feasible, while residual exposures are actively managed via die rent

market instruments including interest rate swaps where practicable.

At 31 December 2015, if interest rates on borrowed funds at amortised cost increased or reduced by 50 basis pointswith all other variables held constant, the e ect on profit or loss would have been as set out below:





54


3.

Fin

an

cia

lri

sk

man

ag

em

en

tco

nti

nu

ed

3.3

.2C

on

trac

tual

matu

rity

of

n

an

cia

las

sets

an

dli

ab

ilit

ies

Gro

ss

no

min

al

(un

dis

co

un

ted

)m

atu

riti

es

of

n

an

cia

lass

ets

an

dli

ab

ilit

ies

The

follow

ing

table

sshow

the

undis

counte

dcashflow

son

the

Gro

up's

financia

lassets

and

liabilitie

sand

on

the

basis

ofth

eir

earlie

st

possib

lecontr

actu

alm

atu

rity

.The

gro

ss

nom

inalin

flow

/(outfl

ow

)dis

clo

sed

inth

eta

ble

isth

econtr

actu

al,

undis

counte

dcash

flow

on

the

financia

lassets

and

liabilitie

s:

Gro

up

31

Decem

ber

20

15

Carr

yin

g

am

ou

nt

Gro

ss

nom

inal

infl

ow

/(ou

tflow

)

Less

than

90

days

91

-1

80

days

18

1-

36

5

days

Over

1year

bu

tle

ss

than

5years

Over

5years

Fin

an

cia

lassets

Cash

and

bala

nces

with

centr

albanks

205,1

47

205,1

47

205,1

47

--

--

Due

from

banks

and

oth

er

financia

lin

stitu

tions

37,0

31

37,0

31

37,0

31

--

--

Fin

ancia

lassets

held

for

tradin

g344

349

286

50

13

--

Derivative

financia

lassets

178

178

178

--

--

Loans

and

advances

tocusto

mers

704,8

96

1,2

21,3

25

71,4

34

8,4

19

24,2

45

237,5

41

879,6

86

-Available

for

sale

investm

ents

14,8

75

19,2

15

5,1

55

-2,8

39

-11,2

21

-H

eld

tom

atu

rity

investm

ents

50,7

56

108,7

54

12,9

07

874

2,9

86

14,0

32

77,9

55

-Loans

and

receiv

able

sin

vestm

ents

34,9

49

52,3

25

285

2,9

99

2,4

54

40,2

31

6,3

56

Assets

ple

dged

as

collate

ral

68,7

01

125,1

97

22,5

54

3,5

37

5,0

51

16,2

05

77,8

50

Oth

er

assets

1,3

60

1,3

60

1,3

60

--

--

1,1

18

,23

71

,77

0,8

81

35

6,3

37

15

,87

93

7,5

88

30

8,0

09

1,0

53

,06

8

Fin

an

cia

lli

ab

ilit

ies

Due

tooth

er

financia

lin

stitu

tions

33,1

10

33,1

10

33,1

10

--

--

Deposits

from

custo

mers

753,1

45

763,3

08

722,9

95

23,3

89

16,9

24

--

Derivative

financia

lliabilitie

s335

335

335

--

--

Borr

ow

ings

from

localand

fore

ign

institu

tions

216,4

48

233,1

57

42,7

67

54,0

03

4,1

99

34,5

79

97,6

09

Oth

er

financia

lliabilitie

s78,5

88

78,5

88

78,5

88

--

--

1,0

81

,62

61

,10

8,4

98

87

7,7

95

77

,39

22

1,1

23

34

,57

99

7,6

09

Gap

(asset

-li

ab

ilit

ies)

36

,61

16

62

,38

3(5

21

,45

8)

(6

1,5

13

)1

6,4

65

27

3,4

30

95

5,4

59

Cu

mu

lati

ve

liq

uid

ity

gap

--

(5

21

,45

8)

(5

82

,97

1)

(5

66

,50

6)

(2

93

,07

6)

66

2,3

83

(All

am

ounts

inm

illions

ofN

aira

unle

ss

oth

erw

ise

sta

ted)

CO

NS

OL

IDA

TE

DA

ND

SE

PA

RA

TE

FIN

AN

CIA

LS

TA

TE

ME

NT

S

Fo

ry

ea

re

nd

ed

31

De

ce

mb

er

20

15


55

NO

TE

S T

O T

HE

FIN

AN

CIA

L S

TA

TE

ME

NT

S

Gro

up

31

Decem

ber

20

14

Carr

yin

g

am

ou

nt

Gro

ss

nom

inal

infl

ow

/(ou

tflow

)

Less

than

90

days

91

-1

80

days

18

1-

36

5

days

Over

1year

bu

tle

ss

than

5years

Over

5years

Fin

an

cia

lassets

Cash

and

bala

nces

with

centr

albanks

300,6

44

300,6

43

262,0

74

--

38,5

69

-

Due

from

banks

and

oth

er

financia

lin

stitu

tions

72,9

78

75,5

02

75,5

02

--

--

Fin

ancia

lassets

held

for

tradin

g18,2

83

19,5

34

11,6

82

4,3

73

1,2

51

-2,2

28

Loans

and

advances

tocusto

mers

645,7

74

730,7

80

147,5

77

44,9

34

85,6

36

344,4

36

108,1

97

-Available

for

sale

investm

ents

8,4

14

19,8

99

11,6

71

97

157

244

7,7

30

-H

eld

tom

atu

rity

investm

ents

125,1

01

318,2

99

55,7

89

63,3

65

50,0

45

44,0

20

105,0

80

-Loans

and

receiv

able

sin

vestm

ents

36,0

58

67,7

23

503

3,6

05

4,5

89

47,2

54

11,7

72

Assets

ple

dged

as

collate

ral

90,1

70

120,4

60

63,2

10

9,5

67

3,6

77

25,7

71

18,2

35

Oth

er

assets

6,4

73

6,4

73

6,4

73

--

--

1,3

03

,89

51

,65

9,3

13

63

4,4

81

12

5,9

41

14

5,3

55

50

0,2

94

25

3,2

42

Fin

an

cia

lli

ab

ilit

ies

Due

tooth

er

financia

lin

stitu

tions

51,8

16

52,1

85

51,8

31

--

354

-

Deposits

from

custo

mers

952,3

02

981,2

08

940,3

14

24,6

62

15,9

15

317

-

Derivative

financia

lliabilitie

s288

288

288

--

--

Borr

ow

ings

from

localand

fore

ign

institu

tions

131,2

79

134,7

96

78,8

69

20,3

22

13,1

59

12,8

02

9,6

44

Oth

er

financia

lliabilitie

s97,9

66

140,1

40

139,7

86

--

354

-

Lia

bilitie

son

investm

ent

contr

acts

26

26

16

--

10

-

1,2

33

,67

71

,30

8,6

43

1,2

11

,10

44

4,9

84

29

,07

41

3,8

37

9,6

44

Gap

(asset

-li

ab

ilit

ies)

70

,21

83

50

,67

0(5

76

,62

3)

80

,95

71

16

,28

14

86

,45

72

43

,59

8

Cu

mu

lati

ve

liq

uid

ity

gap

--

(5

76

,62

3)

(4

95

,66

6)

(3

79

,38

5)

10

7,0

72

35

0,6

70

(All

am

ounts

inm

illions

ofN

aira

unle

ss

oth

erw

ise

sta

ted)

CO

NS

OL

IDA

TE

DA

ND

SE

PA

RA

TE

FIN

AN

CIA

LS

TA

TE

ME

NT

S

Fo

ry

ea

re

nd

ed

31

De

ce

mb

er

20

15


56

NO

TE

S T

O T

HE

FIN

AN

CIA

L S

TA

TE

ME

NT

S

Gro

ss n

om

inal (u

nd

isco

un

ted

) m

atu

riti

es o

f

nan

cia

l as

sets

an

d l

iab

ilit

ies c

on

tin

ued

Ban

k

31

Decem

ber

20

15

Carr

yin

g

am

ou

nt

Gro

ss

nom

inal

infl

ow

/(ou

tflow

)

Less

than

90

days

91

-1

80

days

18

1-

36

5

days

Over

1year

bu

tle

ss

than

5years

Over

5years

Fin

an

cia

lassets

Cash

and

bala

nces

with

centr

albanks

202,7

25

202,7

25

202,7

25

--

--

Due

from

banks

and

oth

er

financia

lin

stitu

tions

35,6

17

35,6

17

35,6

17

--

--

Fin

ancia

lassets

held

for

tradin

g131

134

72

49

13

--

Loans

and

advances

tocusto

mers

700,4

03

1,2

16,2

75

68,9

96

8,0

80

23,3

64

236,1

48

879,6

87

-Available

for

sale

investm

ents

9,8

12

10,0

30

183

-2,6

63

-7,1

84

-H

eld

tom

atu

rity

investm

ents

43,0

31

101,0

29

5,1

82

874

2,9

86

14,0

32

77,9

55

-Loans

and

receiv

able

sin

vestm

ents

33,9

19

51,2

95

285

2,1

69

2,4

54

40,2

31

6,1

56

Assets

ple

dged

as

collate

ral

68,7

01

125,1

97

22,5

54

3,5

37

5,0

51

16,2

05

77,8

50

Oth

er

assets

7,0

95

7,0

95

7,0

95

--

--

1,1

01

,43

41

,74

9,3

97

34

2,7

09

14

,70

93

6,5

31

30

6,6

16

1,0

48

,83

2

Fin

an

cia

lli

ab

ilit

ies

Due

tooth

er

financia

lin

stitu

tions

31,7

66

32,2

13

32,2

13

--

--

Deposits

from

custo

mers

754,8

82

760,3

96

722,9

20

21,7

43

15,7

33

--

Derivative

financia

lliabilitie

s335

335

335

--

--

Borr

ow

ings

from

localand

fore

ign

institu

tions

216,4

48

233,1

57

42,7

67

54,0

03

4,1

99

34,5

79

97,6

09

Oth

er

financia

lliabilitie

s74,1

41

74,1

41

74,1

41

--

--

1,0

77

,57

21

,10

0,2

42

87

2,3

76

75

,74

61

9,9

32

34

,57

99

7,6

09

Gap

(asset

-li

ab

ilit

ies)

23

,86

26

49

,15

5(5

29

,66

7)

(6

1,0

37

)1

6,5

99

27

2,0

37

95

1,2

23

Cu

mu

lati

ve

liq

uid

ity

gap

-(5

29

,66

7)

(5

90

,70

4)

(5

74

,10

5)

(3

02

,06

8)

64

9,1

55

(All

am

ounts

inm

illions

ofN

aira

unle

ss

oth

erw

ise

sta

ted)

CO

NS

OL

IDA

TE

DA

ND

SE

PA

RA

TE

FIN

AN

CIA

LS

TA

TE

ME

NT

S

Fo

ry

ea

re

nd

ed

31

De

ce

mb

er

20

15


57

NO

TE

S T

O T

HE

FIN

AN

CIA

L S

TA

TE

ME

NT

S

Gro

ss n

om

inal (u

nd

isco

un

ted

) m

atu

riti

es o

f

nan

cia

l assets

an

d l

iab

ilit

ies c

on

tin

ued

Ban

k

31

Decem

ber

20

14

Carr

yin

g

am

ou

nt

Gro

ss

nom

inal

infl

ow

/(ou

tflow

)

Less

than

90

days

91

-1

80

days

18

1-

36

5

days

Over

1year

bu

tle

ss

than

5years

Over

5years

Fin

an

cia

lassets

Cash

and

bala

nces

with

centr

albanks

251,8

05

251,8

05

251,8

05

--

--

Due

from

banks

and

oth

er

financia

lin

stitu

tions

56,1

14

58,6

38

58,6

38

--

--

Fin

ancia

lassets

held

for

tradin

g1,3

84

1,5

12

209

52

1,2

51

--

Loans

and

advances

tocusto

mers

598,1

97

688,0

66

135,8

01

37,8

13

81,8

51

331,8

27

100,7

74

-Available

for

sale

investm

ents

2,7

18

2,7

18

--

--

2,7

18

-H

eld

tom

atu

rity

investm

ents

72,6

87

259,7

28

28,6

87

51,2

86

43,2

49

38,1

04

98,4

02

-Loans

and

receiv

able

sin

vestm

ents

18,3

87

67,7

23

503

3,6

05

4,5

89

47,2

54

11,7

72

Assets

ple

dged

as

collate

ral

34,0

66

64,4

66

7,2

16

9,5

67

3,6

77

25,7

71

18,2

35

Oth

er

assets

6,5

94

6,5

94

6,5

94

--

--

1,0

41

,95

21

,40

1,2

50

48

9,4

53

10

2,3

23

13

4,6

17

44

2,9

56

23

1,9

01

Fin

an

cia

lli

ab

ilit

ies

Due

tooth

er

financia

lin

stitu

tions

12,4

98

12,5

13

12,5

13

--

--

Deposits

from

custo

mers

818,4

57

847,3

31

810,5

77

21,5

64

14,8

73

317

Derivative

financia

lliabilitie

s288

288

288

--

--

Borr

ow

ings

from

localand

fore

ign

institu

tions

124,9

67

128,4

83

78,3

27

20,3

22

13,1

59

10,2

53

6,4

22

Oth

er

financia

lliabilitie

s112,2

09

112,2

09

112,2

09

--

--

1,0

68

,41

91

,10

0,8

24

1,0

13

,91

44

1,8

86

28

,03

21

0,5

70

6,4

22

Gap

(asset

-li

ab

ilit

ies)

(2

6,4

67

)3

00

,42

6(5

24

,46

1)

60

,43

71

06

,58

54

32

,38

62

25

,47

9

Cu

mu

lati

ve

liq

uid

ity

gap

-(5

24

,46

1)

(4

64

,02

4)

(3

57

,43

9)

74

,94

73

00

,42

6

(All

am

ounts

inm

illions

ofN

aira

unle

ss

oth

erw

ise

sta

ted)

CO

NS

OL

IDA

TE

DA

ND

SE

PA

RA

TE

FIN

AN

CIA

LS

TA

TE

ME

NT

S

Fo

ry

ea

re

nd

ed

31

De

ce

mb

er

20

15


58

NO

TE

S T

O T

HE

FIN

AN

CIA

L S

TA

TE

ME

NT

S

Gro

ss n

om

inal (u

nd

isco

un

ted

) m

atu

riti

es o

f

nan

cia

l as

sets

an

d l

iab

ilit

ies c

on

tin

ued

(All

am

ounts

inm

illions

ofN

aira

unle

ss

oth

erw

ise

sta

ted)

CO

NS

OL

IDA

TE

DA

ND

SE

PA

RA

TE

FIN

AN

CIA

LS

TA

TE

ME

NT

S

Fo

ry

ea

re

nd

ed

31

De

ce

mb

er

20

15

The

table

belo

win

dic

ate

sth

eearlie

st

tim

eth

eG

roup

can

vary

the

term

softh

eunderlyin

gfinancia

lasset

or

liabilitie

sand

analy

ze

the

Gro

up’s

inte

rest

rate

risk

exposure

on

assets

and

liabilitie

sw

hic

hare

inclu

ded

at

carr

yin

gam

ount

and

cate

gorised

by

the

earlie

rofcontr

actu

alre

–pricin

gor

matu

rity

date

s.

Gro

up

31

Decem

ber

20

15

Carr

yin

g

am

ou

nt

Tota

lLess

than

90

days

91

-1

80

days

18

1-

36

5

days

Over

1year

bu

tle

ss

than

5years

Over

5years

Fin

an

cia

lassets

Cash

and

bala

nces

with

centr

albanks

205,1

47

205,1

47

205,1

47

--

--

Due

from

banks

and

oth

er

financia

lin

stitu

tions

37,0

31

37,0

31

37,0

31

--

--

Fin

ancia

lassets

held

for

tradin

g344

344

284

48

12

--

Derivative

financia

lassets

178

178

178

--

--

Loans

and

advances

tocusto

mers

704,8

96

704,8

96

70,2

12

7,9

93

21,8

39

167,4

92

437,3

60

-Available

for

sale

investm

ents

14,8

75

14,8

75

5,0

83

-2,6

08

-7,1

84

-H

eld

tom

atu

rity

investm

ents

50,7

56

50,7

56

11,3

51

-634

10,8

93

27,8

78

-Loans

and

receiv

able

sin

vestm

ents

34,9

49

34,9

49

1,0

29

--

28,4

77

5,4

43

Assets

ple

dged

as

collate

ral

68,7

01

68,7

01

20,3

40

945

1,1

62

14,1

46

32,1

08

Oth

er

assets

1,3

60

1,3

60

1,3

60

--

--

1,1

18

,23

71

,11

8,2

37

35

2,0

15

8,9

86

26

,25

52

21

,00

85

09

,97

3

Fin

an

cia

lli

ab

ilit

ies

Due

tooth

er

financia

lin

stitu

tions

33,1

10

33,1

10

33,1

10

--

--

Deposits

from

custo

mers

753,1

45

753,1

45

713,9

01

22,9

52

16,2

92

--

Derivative

financia

lliabilitie

s335

335

335

--

--

Borr

ow

ings

from

localand

fore

ign

institu

tions

216,4

48

216,4

48

50,1

37

39,5

54

10,4

42

32,1

16

84,1

99

Oth

er

financia

lliabilitie

s78,5

88

78,5

88

78,5

88

--

--

1,0

81

,62

61

,08

1,6

26

87

6,0

71

62

,50

62

6,7

34

32

,11

68

4,1

99

36

,61

13

6,6

11

(5

24

,05

6)

(5

3,5

20

)(4

79

)1

88

,89

24

25

,77

4

Rep

ricin

g p

eri

od

of

n

an

cia

l assets

an

d lia

bilit

ies


59

NO

TE

S T

O T

HE

FIN

AN

CIA

L S

TA

TE

ME

NT

S

Gro

up

31

Decem

ber

20

14

Carr

yin

g

am

ou

nt

Tota

lLess

than

90

days

91

-1

80

days

18

1-

36

5

days

Over

1year

bu

tle

ss

than

5years

Over

5years

Fin

an

cia

lassets

Cash

and

bala

nces

with

centr

albanks

300,6

44

300,6

44

262,0

74

--

38,5

70

-

Due

from

banks

and

oth

er

financia

lin

stitu

tions

72,9

78

72,9

78

72,9

78

--

--

Fin

ancia

lassets

held

for

tradin

g18,2

83

18,2

83

12,7

33

4,4

22

1,1

28

--

Loans

and

advances

tocusto

mers

645,7

74

645,7

74

149,7

60

32,8

71

72,9

27

297,7

43

92,4

73

-Available

for

sale

investm

ents

8,4

14

8,4

14

78

8,3

36

-H

eld

tom

atu

rity

investm

ents

125,1

01

125,1

01

40,4

22

30,8

41

7,3

16

12,8

90

33,6

32

-Loans

and

receiv

able

sin

vestm

ents

36,0

58

36,0

58

36,0

58

--

--

Assets

ple

dged

as

collate

ral

90,1

70

90,1

70

15,0

72

33,7

63

4,5

37

17,4

16

19,3

82

Oth

er

assets

6,4

73

6,4

73

6,4

73

--

--

1,3

03

,89

51

,30

3,8

95

59

5,6

48

10

1,8

97

85

,90

83

66

,61

91

53

,82

3

Fin

an

cia

lli

ab

ilit

ies

Due

tooth

er

financia

lin

stitu

tions

51,8

16

51,8

16

51,8

16

--

--

Deposits

from

custo

mers

952,3

02

952,3

02

914,0

55

23,1

66

14,7

93

288

-

Derivative

financia

lliabilitie

s288

288

288

--

--

Borr

ow

ings

from

localand

fore

ign

institu

tions

131,2

79

131,2

79

131,2

79

--

--

Oth

er

financia

lliabilitie

s97,9

66

97,9

66

97,6

02

--

364

-

Lia

bilitie

son

investm

ent

contr

acts

26

26

26

--

--

1,2

33

,67

71

,23

3,6

77

1,1

95

,06

62

3,1

66

14

,79

36

52

-

70

,21

87

0,2

18

(5

99

,41

8)

78

,73

17

1,1

15

36

5,9

67

15

3,8

23

(All

am

ounts

inm

illions

ofN

aira

unle

ss

oth

erw

ise

sta

ted)

CO

NS

OL

IDA

TE

DA

ND

SE

PA

RA

TE

FIN

AN

CIA

LS

TA

TE

ME

NT

S

Fo

ry

ea

re

nd

ed

31

De

ce

mb

er

20

15


60

NO

TE

S T

O T

HE

FIN

AN

CIA

L S

TA

TE

ME

NT

S

Rep

ricin

g p

eri

od

of

n

an

cia

l assets

an

d lia

bilit

ies

Ban

k

31

Decem

ber

20

15

Carr

yin

g

am

ou

nt

Tota

lLess

than

90

days

91

-1

80

days

18

1-

36

5

days

Over

1year

bu

tle

ss

than

5years

Over

5years

Fin

an

cia

lassets

Cash

and

bala

nces

with

centr

albanks

202,7

25

202,7

25

202,7

25

--

--

Due

from

banks

and

oth

er

financia

lin

stitu

tions

35,6

17

35,6

17

35,6

17

--

--

Fin

ancia

lassets

held

for

tradin

g131

131

71

48

12

--

Loans

and

advances

tocusto

mers

700,4

03

700,4

03

68,5

47

6,9

41

21,0

45

166,5

10

437,3

60

-Available

for

sale

investm

ents

9,8

12

9,8

12

20

-2,6

08

-7,1

84

-H

eld

tom

atu

rity

investm

ents

43,0

31

43,0

31

3,6

26

-634

10,8

93

27,8

78

-Loans

and

receiv

able

sin

vestm

ents

33,9

19

33,9

19

--

-28,4

77

5,4

42

Assets

ple

dged

as

collate

ral

68,7

01

68,7

01

20,3

40

945

1,1

62

14,1

46

32,1

08

Oth

er

assets

7,0

95

7,0

95

7,0

95

--

--

1,1

01

,43

41

,10

1,4

34

33

8,0

41

7,9

34

25

,46

12

20

,02

65

09

,97

2

Fin

an

cia

lli

ab

ilit

ies

Due

tooth

er

financia

lin

stitu

tions

31,7

66

31,7

66

31,7

66

--

--

Deposits

from

custo

mers

754,8

82

754,8

82

718,4

00

21,3

36

15,1

46

--

Derivative

financia

lliabilitie

s335

335

335

--

--

Borr

ow

ings

from

localand

fore

ign

institu

tions

216,4

48

216,4

48

50,1

37

39,5

54

10,4

42

32,1

16

84,1

99

Oth

er

financia

lliabilitie

s74,1

41

74,1

41

74,1

41

--

--

1,0

77

,57

21

,07

7,5

72

87

4,7

79

60

,89

02

5,5

88

32

,11

68

4,1

99

23

,86

22

3,8

62

(5

36

,73

8)

(5

2,9

56

)(1

27

)1

87

,91

04

25

,77

3

(All

am

ounts

inm

illions

ofN

aira

unle

ss

oth

erw

ise

sta

ted)

CO

NS

OL

IDA

TE

DA

ND

SE

PA

RA

TE

FIN

AN

CIA

LS

TA

TE

ME

NT

S

Fo

ry

ea

re

nd

ed

31

De

ce

mb

er

20

15


61

NO

TE

S T

O T

HE

FIN

AN

CIA

L S

TA

TE

ME

NT

S

Rep

ricin

g p

eri

od

of

n

an

cia

l assets

an

d lia

bilit

ies

(All

am

ounts

inm

illions

ofN

aira

unle

ss

oth

erw

ise

sta

ted)

CO

NS

OL

IDA

TE

DA

ND

SE

PA

RA

TE

FIN

AN

CIA

LS

TA

TE

ME

NT

S

Fo

ry

ea

re

nd

ed

31

De

ce

mb

er

20

15

Ban

k

31

Decem

ber

20

14

Fin

an

cia

lassets

Cash

and

bala

nces

with

centr

albanks

251,8

05

251,8

05

251,8

05

--

--

56,1

14

56,1

14

56,1

14

--

--

Fin

ancia

lassets

held

for

tradin

g1,3

84

1,3

84

1,3

84

--

--

Loans

and

advances

tocusto

mers

598,1

97

598,1

97

117,1

81

32,6

28

70,6

71

286,3

29

91,3

88

-Available

for

sale

investm

ents

2,7

18

2,7

18

--

--

2,7

18

-H

eld

tom

atu

rity

investm

ents

72,6

87

72,6

87

19,3

47

18,7

61

650

6,9

74

26,9

55

-Loans

and

receiv

able

sin

vestm

ents

18,3

87

18,3

87

18,3

87

--

--

Assets

ple

dged

as

collate

ral

34,0

66

34,0

66

6,4

29

7,5

93

1,2

26

12,1

25

6,6

93

Oth

er

assets

6,5

94

6,5

94

6,5

94

--

--

1,0

41

,95

21

,04

1,9

52

47

7,2

41

58

,98

27

2,5

47

30

5,4

28

12

7,7

54

Fin

an

cia

lli

ab

ilit

ies

Due

tooth

er

financia

lin

stitu

tions

12,4

98

12,4

98

12,4

98

--

--

Deposits

from

custo

mers

818,4

57

818,4

57

785,0

45

19,6

03

13,5

21

288

-

Derivative

financia

lliabilitie

s288

288

288

--

--

Borr

ow

ings

from

localand

fore

ign

institu

tions

124,9

67

124,9

67

36,0

67

88,9

00

--

-

Oth

er

financia

lliabilitie

s112,2

09

112,2

09

112,2

09

--

--

1,0

68

,41

91

,06

8,4

19

94

6,1

07

10

8,5

03

13

,52

12

88

-

(2

6,4

67

)(2

6,4

67

)(4

68

,86

6)

(4

9,5

21

)5

9,0

26

30

5,1

40

12

7,7

54

Due

from

banks

and

oth

er

financia

l

institu

tions

Carr

yin

g

am

ou

nt

Tota

lLess

than

90

days

91

-1

80

days

18

1-

36

5

days

Over

1year

bu

tle

ss

than

5years

Over

5years


62

NO

TE

S T

O T

HE

FIN

AN

CIA

L S

TA

TE

ME

NT

S

Rep

ricin

g p

eri

od

of

n

an

cia

l assets

an

d lia

bilit

ies

3.

Fin

an

cia

lri

sk

man

ag

em

en

tcon

tin

ued

The

table

belo

wsum

mari

zes

the

Gro

up's

financia

lassets

and

financia

lliabilitie

sat

gro

ss

am

ount,

cate

gori

sed

by

curr

ency:

Fin

an

cia

lin

str

um

en

tsb

ycu

rren

cy

Gro

up

31

Decem

ber

20

15

Tota

lN

air

aU

SD

GB

PEu

roO

thers

Fin

an

cia

lassets

Cash

and

bala

nces

with

centr

albanks

205,1

47

201,8

13

1,0

92

119

140

1,9

83

Due

from

banks

and

oth

er

financia

lin

stitu

tions

37,0

31

14,4

24

15,4

29

748

2,1

23

4,3

07

Fin

ancia

lassets

held

for

tradin

g344

344

--

--

Derivative

financia

lassets

178

-178

--

-Loans

and

advances

tocusto

mers

741,1

68

457,1

11

281,4

03

29

108

2,5

17

-Available

for

sale

investm

ents

14,8

75

12,1

70

2,7

05

--

-H

eld

tom

atu

rity

investm

ents

50,7

56

45,5

12

--

-5,2

44

-Loans

and

receiv

able

sin

vestm

ents

34,9

49

34,9

49

--

--

Assets

ple

dged

as

collate

ral

68,7

01

68,7

01

--

--

Oth

er

assets

1,3

60

875

82

--

403

1,1

54,5

09

835,8

99

300,8

89

896

2,3

71

14,4

54

Fin

an

cia

lli

ab

ilit

ies

Due

tooth

er

financia

lin

stitu

tions

33,1

10

29,7

66

3,3

44

--

-D

eposits

from

custo

mers

753,1

45

611,1

59

133,1

35

2,1

56

4,7

09

1,9

86

Derivative

financia

lliabilitie

s335

-335

--

-Borr

ow

ings

from

localand

fore

ign

institu

tions

216,4

48

134,6

34

81,8

14

--

-O

ther

liabilitie

s78,5

88

60,9

21

16,7

95

--

872

1,0

81,6

26

836,4

80

235,4

23

2,1

56

4,7

09

2,8

58

(All

am

ounts

inm

illions

ofN

aira

unle

ss

oth

erw

ise

sta

ted)

CO

NS

OL

IDA

TE

DA

ND

SE

PA

RA

TE

FIN

AN

CIA

LS

TA

TE

ME

NT

S

Fo

ry

ea

re

nd

ed

31

De

ce

mb

er

20

15


63

NO

TE

S T

O T

HE

FIN

AN

CIA

L S

TA

TE

ME

NT

S

Fin

an

cia

lin

str

um

en

tsb

ycu

rren

cy

Gro

up

31

Decem

ber

20

14

Tota

lN

air

aU

SD

GB

PEu

roO

thers

Fin

an

cia

lassets

Cash

and

bala

nces

with

centr

albanks

300,6

44

289,1

60

7,7

50

668

1,0

48

2,0

18

Due

from

banks

and

oth

er

financia

lin

stitu

tions

72,9

78

16,5

74

50,8

69

1,8

78

3,0

52

605

Fin

ancia

lassets

held

for

tradin

g18,2

83

18,2

83

--

--

Loans

and

advances

tocusto

mers

670,2

86

391,6

81

276,8

41

35

143

1,5

86

-Available

for

sale

investm

ents

8,4

14

8,4

14

--

--

-H

eld

tom

atu

rity

investm

ents

125,1

01

118,1

47

3,7

02

--

3,2

52

-Loans

and

receiv

able

sin

vestm

ents

36,0

58

36,0

58

--

--

Assets

ple

dged

as

collate

ral

90,1

70

90,1

70

--

--

Oth

er

assets

6,4

73

6,4

73

--

--

1,3

28,4

07

974,9

59

339,1

62

2,5

81

4,2

43

7,4

61

Fin

an

cia

lli

ab

ilit

ies

Due

tooth

er

financia

lin

stitu

tions

51,8

16

51,8

16

--

--

Deposits

from

custo

mers

952,3

02

687,8

00

251,0

25

3,7

22

6,8

03

2,9

52

Derivative

financia

lliabilitie

s288

-288

--

-Borr

ow

ings

from

localand

fore

ign

institu

tions

131,2

79

25,4

66

105,8

13

--

-O

ther

liabilitie

s64,1

57

55,4

95

7,8

50

--

812

1,1

99,8

42

820,5

77

364,9

76

3,7

22

6,8

03

3,7

64

(All

am

ounts

inm

illions

ofN

aira

unle

ss

oth

erw

ise

sta

ted)

CO

NS

OL

IDA

TE

DA

ND

SE

PA

RA

TE

FIN

AN

CIA

LS

TA

TE

ME

NT

S

Fo

ry

ea

re

nd

ed

31

De

ce

mb

er

20

15


64

NO

TE

S T

O T

HE

FIN

AN

CIA

L S

TA

TE

ME

NT

S

Fin

an

cia

lin

str

um

en

tsb

ycu

rren

cy

Ban

k

31

Decem

ber

20

15

Tota

lN

air

aU

SD

GB

PEu

roFin

an

cia

lassets

Cash

and

bala

nces

with

centr

albanks

202,7

25

201,8

13

766

91

55

Due

from

banks

and

oth

er

financia

lin

stitu

tions

35,6

17

14,2

02

18,6

60

718

2,0

37

Fin

ancia

lassets

held

for

tradin

g131

131

--

-Loans

and

advances

tocusto

mers

737,6

56

457,1

10

280,4

09

29

108

-Available

for

sale

investm

ents

9,8

12

9,0

16

796

--

-H

eld

tom

atu

rity

investm

ents

43,0

31

43,0

31

--

--

Loans

and

receiv

able

sin

vestm

ents

33,9

19

29,7

99

4,1

20

--

Assets

ple

dged

as

collate

ral

68,7

01

68,7

01

--

-O

ther

assets

7,0

95

7,0

95

--

-

1,1

38,6

87

830,8

98

304,7

51

838

2,2

00

Fin

an

cia

lli

ab

ilit

ies

Due

tooth

er

financia

lin

stitu

tions

31,7

66

21,0

29

10,7

37

--

Deposits

from

custo

mers

754,8

82

615,7

33

132,3

69

2,1

31

4,6

49

Derivative

financia

lliabilitie

s335

-335

--

Borr

ow

ings

from

localand

fore

ign

institu

tions

216,4

48

134,6

34

81,8

14

--

Oth

er

liabilitie

s74,1

41

57,4

07

16,7

34

--

1,0

77,5

72

828,8

03

241,9

89

2,1

31

4,6

49

(All

am

ounts

inm

illions

ofN

aira

unle

ss

oth

erw

ise

sta

ted)

CO

NS

OL

IDA

TE

DA

ND

SE

PA

RA

TE

FIN

AN

CIA

LS

TA

TE

ME

NT

S

Fo

ry

ea

re

nd

ed

31

De

ce

mb

er

20

15


65

NO

TE

S T

O T

HE

FIN

AN

CIA

L S

TA

TE

ME

NT

S

Fin

an

cia

lin

str

um

en

tsb

ycu

rren

cy

Ban

k

31

Decem

ber

20

14

Tota

lN

air

aU

SD

GB

PEu

roFin

an

cia

lassets

Cash

and

bala

nces

with

centr

albanks

251,8

05

248,6

01

2,4

70

433

301

Due

from

banks

and

oth

er

financia

lin

stitu

tions

56,1

14

8,2

11

42,9

73

1,8

78

3,0

52

Fin

ancia

lassets

held

for

tradin

g1,3

84

1,3

84

--

-Loans

and

advances

tocusto

mers

623,4

05

353,5

95

269,6

32

35

143

-Available

for

sale

investm

ents

2,7

18

2,7

18

--

--

Held

tom

atu

rity

investm

ents

72,6

87

72,6

87

--

--

Loans

and

receiv

able

sin

vestm

ents

18,3

87

18,3

87

--

-Assets

ple

dged

as

collate

ral

34,0

66

34,0

66

--

-O

ther

assets

6,5

94

6,5

94

--

-

1,0

67,1

60

746,2

43

315,0

75

2,3

46

3,4

96

Fin

an

cia

lli

ab

ilit

ies

Due

tooth

er

financia

lin

stitu

tions

12,4

98

12,4

98

--

-D

eposits

from

custo

mers

818,4

57

566,3

89

242,0

53

3,4

11

6,6

04

Derivative

financia

lliabilitie

s288

-288

--

Borr

ow

ings

from

localand

fore

ign

institu

tions

124,9

67

19,1

54

105,8

13

--

Oth

er

liabilitie

s112,2

09

104,3

54

7,8

50

--

1,0

68,4

19

702,4

00

356,0

04

3,4

11

6,6

04

(All

am

ounts

inm

illions

ofN

aira

unle

ss

oth

erw

ise

sta

ted)

CO

NS

OL

IDA

TE

DA

ND

SE

PA

RA

TE

FIN

AN

CIA

LS

TA

TE

ME

NT

S

Fo

ry

ea

re

nd

ed

31

De

ce

mb

er

20

15


66

NO

TE

S T

O T

HE

FIN

AN

CIA

L S

TA

TE

ME

NT

S


Sensitivity of foreign exchange currencies and impact on prot and equity

Dollar

Naira strengthens

Naira weakens

Pounds

Naira strengthens

Naira weakens

Euro

Naira strengthens

Naira weakens

Sensitivity analysis of derivative valuations

The Group carried out the following in determining sensitivity of the Group's profit to fluctuations in exchange rate

of foreign currencies:- Daily foreign exchange rates were obtained and trended

- A reasonably possible change of +/-N1 was determined based on the distribution of one year daily change in

exchange rates.

- The chosen reasonable change in exchange rates was then applied to the bank's foreign currency position as

at end of the period.

At 31 December 2015, a change of +/-N1 against the foreign currency with all other variables held constant, the

loss for the year would have increased/(decreased) as set out in the table below mainly as a result of foreignexchange gains or losses on the translation.

The fair value of interest rate swap contracts varies largely due to changes in LIBOR rates. On the swap contract,the group is long 3M Libor and short fixed rate, resulting in favourable impact when Libor rises and vice versa.

Holding other variables constant, the impact of +/-5 basis points (5bps) in Libor move was assessed. over the last

five years that the contract has been running, 3M Libor move have not exceeded 15bps, hence the choice of 5bps

sensitivity assessment. The table summarizes our derivatives financial instruments and analyzes the sensitivity of

their fair values to an immediate change in LIBOR rate. The liability (fair value) reduced to N 307 milllion from

N336 million ( 2014: N252 from N288 million) given a 5 bps increase in Libor rate.

The following table summarizes our derivative financial instruments and analyzes the sensitivity of their fair values

to an immediate change in LIBOR rate. The impact on profit or loss is as follows:


2015 2014 2015 2014


(336) 138 (322) 230

336 (138) 322 (230)

(4) 4 4 (4)

4 (4) (4) 4

(11) 13 11 (15)

11 (13) (11) 15

Group Bank





67


3.

Fin

an

cia

lri

sk

man

ag

em

en

tco

nti

nu

ed

Tota

ld

eri

vati

ves

Gro

up

an

dB

an

k

31

Decem

ber

20

15

Favoura

ble

changes

(pre

-

tax)

Unfa

voura

ble

changes

(pre

-

tax)

Favoura

ble

changes

(post-

tax)

Unfa

voura

ble

changes

(post-

tax)

Notional

contr

act

am

ount

Asset

Lia

bility

Fair

valu

e

changes

to:

Fair

valu

e

changes

to:

Fair

valu

e

changes

to:

Fair

valu

e

changes

to:

Derivative

financia

lassets

/(liabilitie

s)

USD

100M

illion

-(3

35)

(307)

(364)

(314)

(368)

31

Decem

ber

20

14

Favoura

ble

changes

(pre

-

tax)

Unfa

voura

ble

changes

(pre

-

tax)

Favoura

ble

changes

(post-

tax)

Unfa

voura

ble

changes

(post-

tax)

Notional

contr

act

am

ount

Asset

Lia

bility

Fair

valu

e

changes

to:

Fair

valu

e

changes

to:

Fair

valu

e

changes

to:

Fair

valu

e

changes

to:

Derivative

financia

lassets

/(liabilitie

s)

USD

100M

illion

-(2

88)

(252)

(317)

(262)

(323)

Fair

valu

e

Fair

valu

e

(All

am

ounts

inm

illions

ofN

aira

unle

ss

oth

erw

ise

sta

ted)

CO

NS

OL

IDA

TE

DA

ND

SE

PA

RA

TE

FIN

AN

CIA

LS

TA

TE

ME

NT

S

Fo

ry

ea

re

nd

ed

31

De

ce

mb

er

20

15


68

NO

TE

S T

O T

HE

FIN

AN

CIA

L S

TA

TE

ME

NT

S

4 Capital Management

Capital Risk Management

Capital management is central to the Group’s nancial stability and sustainability. The Group endeavours to maintain the

appropriate level of capital that is adequate to support our risk prole, regulatory requirements and business needs.

The Group’s Capital management philosophy is to optimize its capital structure given the peculiarities of its risk profile, by

maintaining adequate levels of capital to cater for all unexpected losses, beyond meeting regulatory requirements. This

philosophy guides the Group's Internal Capital Adequacy Assessment Process (ICAAP), which sets internal capital targets and

denes strategies for achieving those targets consistent with our risk appetite, business plans and operating environment.

As part of this process, we have implemented a program of enterprise-wide stress testing to evaluate the income and capital

(economic and regulatory) impacts of several potential stress events.

In the Group, capital allocations are approved at the Board level and are monitored daily by the Group’s management.

The Central Bank of Nigeria (CBN) has an oversight function and monitors all banks operating in Nigeria to ensure

compliance with capital adequacy requirements. At every point in time, the Group ensures that it has sufcient capital above

the regulatory capital to hedge against any unanticipated shocks.

The Group’s regulatory capital comprises of two tiers:

• Tier 1 capital: share capital (net of any book values of the treasury shares), statutory reserve, non-controlling interest,

retained earnings, reserves created by appropriations of retained earnings and other disclosed reserves. The book value of

goodwill is deducted in arriving at Tier 1 capital.

• Tier 2 capital: qualifying subordinated debt, unrealized gains arising on the fair valuation of equity instruments held as

available for sale. Investments in capital of other banks and nancial institutions are deducted from Tier 1 and Tier 2 capital

to arrive at the regulatory capital.

Capital adequacy ratio

The capital adequacy ratio is the quotient of the capital base of the Group and the Group's risk weighted asset base. The

Central Bank of Nigeria prescribed a minimum limit of 15% of total qualifying capital/total risk weighted capital/total risk

weighted assets as a measure of capital adequacy





69


31

December

31

December

31

December

31

December

2015 2014 2015 2014

Tier 1 capital

Share capital 6,940 6,609 6,940 6,609

Share premium 65,548 65,548 65,548 65,548

Statutory reserves 15,958 15,822 15,721 15,721

SMEEIS reserve 1,854 1,854 1,854 1,854

Capital reserve 7,503 7,503 7,503 7,503

Regulatory reserve - 23 - -

Minority interest 927 764 - -

Retained earnings (6,825) 42,662 (17,134) 32,225

Total 91,905 140,785 80,432 129,460

Add/(less)

Intangible assets (3,076) (3,871) (3,066) (1,962)

Exposure to own financial holding company - (1,342) - -

Goodwill - (30,710) - -

Deferred tax asset (481) (463) - -

Excess exposure(s) over single obligor without CBN (10,379) - (10,379) -

50% investment in subsidiaries - - (2,789) (64,803)

Adjusted Total qualifying Tier 1 capital 77,969 104,399 64,198 62,695

Tier 2 capital

Other qualifying capital 26,353 23,874 26,353 23,874

AFS Fair value reserves 3,572 1,789 2,627 2,493

50% investment in subsidiaries - - (2,789) (64,803)

Adjusted Total qualifying Tier 2 capital 29,925 25,663 26,191 (38,436)

Total regulatory capital 107,894 130,062 90,389 24,259

Total risk-weighted assets 910,385 751,311 911,405 737,084

Capital Ratios

12% 17% 10% 3%

9% 14% 7% 9%

Total regulatory capital expressed as a

percentage of total risk-weighted assets

The table below summarises the composition of regulatory capital and the ratios of the bank for the years presented below.

Group Bank

Total tier 1 capital expressed as a percentage of

risk-weighted assets





70


5

Acco

un

tin

gcla

ssifi

cati

on

,m

easu

rem

en

tb

asis

an

dfa

irvalu

es

Th

eta

ble

sbe

low

sets

ou

tth

eG

roup's

cla

ssi

cation

of

each

class

of

nan

cial

assets

and

liabili

ties

and

their

fair

valu

es.

All

fair

valu

em

easu

rem

en

tsare

recurr

ing.

Gro

up

31

Decem

ber

20

15

Held

for

trad

ing

Fair

valu

e

thro

ug

h

pro

fit

or

loss

Held

to

matu

rity

Lo

an

san

d

receiv

ab

les

Avail

ab

le

for

sale

Oth

er

fin

an

cia

l

liab

ilit

ies

at

co

st

To

tal

carr

yin

g

am

ou

nt

Level

1Level

2Level

3Fair

valu

e

Fin

an

cia

lassets

Cash

and

short

term

funds

--

-205,1

47

--205,1

47

-205,1

47

-205,1

47

Due

from

banks

and

oth

er

financia

lin

stitu

tions

--

-37,0

31

--

37,0

31

-37,0

31

-37,0

31

Fin

ancia

lassets

held

for

tradin

g344

--

--

-344

120

224

-344

Derivative

financia

lassets

-178

--

--

178

-178

-178

Loans

and

advances

tocusto

mers

--

-704,8

96

--

704,8

96

--

704,8

96

704,8

96

Available

for

sale

investm

ents

-Q

uote

dequity

investm

ent

measure

dat

fair

valu

e-

--

-9,5

40

-9,5

40

10

9,5

30

-9,5

40

-Tre

asury

bills

--

--

21

-21

21

--

21

-Bonds

--

--

5,3

14

-5,3

14

5,3

14

--

5,3

14

Held

tom

atu

rity

investm

ents

-Tre

asury

bills

--

11,3

51

--

-11,3

51

11,3

80

--

11,3

80

-Federa

lgovern

ment

bonds

--

39,4

05

--

-39,4

05

43,7

18

--

43,7

18

Loans

and

receiv

able

s investm

ents

-Corp

ora

tebonds

--

-3,0

87

--

3,0

87

-4,1

94

-4,1

94

-Sta

tegovern

ment

bonds

--

-27,7

42

--

27,7

42

-29,4

90

-29,4

90

-Euro

bonds

--

-4,1

20

--

4,1

20

-3,2

14

-3,2

14

Assets

ple

dged

as

collate

ral

-Tre

asury

bills

--

21,2

86

--

-21,2

86

21,4

52

--

21,4

52

-Federa

lgovern

ment

bonds

--

33,8

78

--

-33,8

78

34,2

03

--

34,2

03

-Sta

tegovern

ment

bonds

--

-12,7

31

--

12,7

31

-13,8

11

-13,8

11

-Corp

ora

tebonds

--

-806

--

806

-806

-806

Oth

er

assets

--

-1,3

60

--

1,3

60

-1,3

60

-1,3

60

344

178

105,9

20

996,9

20

14,8

75

-1,1

18,2

37

116,2

18

304,9

85

704,8

96

1,1

26,0

99

Fin

an

cia

lli

ab

ilit

ies

Due

tooth

er

financia

lin

stitu

tions

--

--

-33,1

10

33,1

10

-33,1

10

-33,1

10

Deposits

and

oth

er

accounts

--

--

-753,1

45

753,1

45

-753,1

45

-753,1

45

Derivative

financia

lliabilitie

s-

335

--

--

335

--

335

335

Borr

ow

ings

from

localand

fore

ign

banks/I

nstitu

tions

--

--

-216,4

48

216,4

48

-216,4

48

-216,4

48

Oth

er

liabilitie

s-

--

--

78,5

88

78,5

88

-78,5

88

-78,5

88

-335

--

-1,0

81,2

91

1,0

81,6

26

-1,0

81,2

91

335

1,0

81,6

26

Carr

yin

gam

ou

nt

Fair

valu

e am

ort

ised

Fa

ir v

alu

es

of

n

an

cia

l a

ss

ets

an

d l

iab

ilit

ies

(All

am

ounts

inm

illions

ofN

aira

unle

ss

oth

erw

ise

sta

ted)

CO

NS

OL

IDA

TE

DA

ND

SE

PA

RA

TE

FIN

AN

CIA

LS

TA

TE

ME

NT

S

Fo

ry

ea

re

nd

ed

31

De

ce

mb

er

20

15


71

NO

TE

S T

O T

HE

FIN

AN

CIA

L S

TA

TE

ME

NT

S


72

Gro

up

31

Decem

ber

20

14

Held

for

trad

ing

Fair

valu

e

thro

ug

h

pro

fit

or

loss

Held

to

matu

rity

Lo

an

san

d

receiv

ab

les

Avail

ab

le

for

sale

Oth

er

fin

an

cia

l

liab

ilit

ies

at

am

ort

ised

co

st

To

tal

carr

yin

g

am

ou

nt

Level

1Level

2Level

3Fair

valu

e

Fin

an

cia

lassets

Cash

and

short

term

funds

--

-300,6

44

--

300,6

44

-300,6

44

-300,6

44

Due

from

banks

and

oth

er

financia

lin

stitu

tions

--

-72,9

78

--

72,9

78

-72,9

78

-72,9

78

Fin

ancia

lassets

held

for

tradin

g18,2

83

--

--

-18,2

83

17,1

55

1,1

28

-18,2

83

Loans

and

advances

tocusto

mers

--

-645,7

74

--

645,7

74

672,9

41

672,9

41

Available

for

sale

investm

ents

-Q

uote

dequity

investm

ent

measure

dat

fair

valu

e-

--

8,3

36

-8,3

36

10

8,3

27

-8,3

37

-Tre

asury

bills

--

--

3-

33

--

3-

Bonds

--

--

75

-75

75

--

75

Held

tom

atu

rity

investm

ents

-Tre

asury

bills

--

87,7

72

--

-87,7

72

38,3

41

--

38,3

41

-Federa

lgovern

ment

bonds

--

37,3

29

--

-37,3

29

25,6

99

--

25,6

99

Loans

and

receiv

able

s investm

ents

--

Corp

ora

tebonds

--

-7,5

57

--

7,5

57

-7,6

67

-7,6

67

-Sta

teG

overn

ment

bonds

--

-25,0

98

25,0

98

-16,4

77

-16,4

77

-Euro

bonds

--

-3,4

03

--

3,4

03

-3,4

03

-3,4

03

Assets

ple

dged

as

collate

ral

--

Tre

asury

bills

--

44,8

30

--

-44,8

30

44,7

98

--

44,7

98

-Federa

lgovern

ment

bonds

--

34,3

19

--

-34,3

19

31,7

26

--

31,7

26

-Sta

tegovern

ment

bonds

--

11,0

21

--

-11,0

21

-10,3

73

-10,3

73

Oth

er

assets

--

-6,4

73

--

6,4

73

-6,4

73

-6,4

73

18,2

83

-215,2

71

1,0

61,9

27

8,4

14

-1,3

03,8

95

157,8

07

427,4

70

672,9

41

1,2

58,2

18

Fin

an

cia

lli

ab

ilit

ies

Due

tooth

er

financia

lin

stitu

tions

--

--

-51,8

16

51,8

16

-51,8

16

-51,8

16

Deposits

and

oth

er

accounts

--

--

-952,3

02

952,3

02

-952,3

02

-952,3

02

Derivative

financia

lliabilitie

s-

288

--

--

288

-288

-288

Borr

ow

ings

from

localand

fore

ign

banks/I

nstitu

tions

--

--

-131,2

79

131,2

79

-131,2

79

-131,2

79

Oth

er

liabilitie

s-

--

--

97,9

66

97,9

66

-97,9

66

-97,9

66

Lia

bilitie

son

investm

ent

contr

acts

--

--

-26

26

-26

-26

-288

--

-1,2

33,3

89

1,2

33,6

77

-1,2

33,6

77

-1,2

33,6

77

Carr

yin

gam

ou

nt

Fair

valu

e

(All

am

ounts

inm

illions

ofN

aira

unle

ss

oth

erw

ise

sta

ted)

CO

NS

OL

IDA

TE

DA

ND

SE

PA

RA

TE

FIN

AN

CIA

LS

TA

TE

ME

NT

S

Fo

ry

ea

re

nd

ed

31

De

ce

mb

er

20

15

NO

TE

S T

O T

HE

FIN

AN

CIA

L S

TA

TE

ME

NT

S

Ban

k

31

Decem

ber

20

15

Held

for

trad

ing

Fair

valu

e

thro

ug

h

pro

fit

or

loss

Held

to

matu

rity

Lo

an

san

d

receiv

ab

les

Avail

ab

le

for

sale

Oth

er

fin

an

cia

l

liab

ilit

ies

at

am

ort

ised

co

st

To

tal

carr

yin

g

am

ou

nt

Level

1Level

2Level

3Fair

valu

e

Fin

an

cia

lassets

Cash

and

short

term

funds

--

-202,7

25

--

202,7

25

-202,7

25

-202,7

25

Due

from

banks

and

oth

er

financia

lin

stitu

tions

--

-35,6

17

--

35,6

17

-35,6

17

-35,6

17

Fin

ancia

lassets

held

for

tradin

g131

--

--

-131

120

11

-131

Loans

and

advances

tocusto

mers

--

-700,4

03

--

700,4

03

--

700,4

03

700,4

03

Available

for

sale

investm

ents

-Q

uote

dequity

investm

ent

--

--

7,1

84

-7,1

84

10

7,1

74

7,1

84

-Tre

asury

bills

--

--

19

-19

19

--

19

-Federa

lgovern

ment

bonds

--

--

2,6

09

-2,6

09

2,6

09

--

2,6

09

Held

tom

atu

rity

investm

ents

--

--

--

Tre

asury

bills

--

3,6

26

--

-3,6

26

3,6

55

--

3,6

55

-Federa

lgovern

ment

bonds

--

39,4

05

--

-39,4

05

43,7

18

--

43,7

18

Loans

and

receiv

able

sin

vestm

ents

-Corp

ora

tebonds

--

-2,9

75

--

2,9

75

-3,2

05

-3,2

05

-Sta

tegovern

ment

bonds

--

-26,8

24

--

26,8

24

-28,5

73

-28,5

73

-Euro

bonds

--

-4,1

20

--

4,1

20

-3,2

14

-3,2

14

Assets

ple

dged

as

collate

ral

--

Tre

asury

bills

--

21,2

86

--

-21,2

86

21,4

52

--

21,4

52

-Federa

lgovern

ment

bonds

--

33,8

78

--

-33,8

78

34,2

03

--

34,2

03

-Sta

tegovern

ment

bonds

--

-12,7

31

--

12,7

31

-13,8

11

-13,8

11

-Corp

ora

tebonds

--

-806

--

806

-866

-866

Oth

er

assets

--

-7,0

95

-7,0

95

-7,0

95

-7,0

95

131

-98,1

95

993,2

96

9,8

12

-1,1

01,4

34

105,7

86

302,2

91

700,4

03

1,1

08,4

80

Fin

an

cia

lliab

ilit

ies

-D

ue

tooth

er

financia

lin

stitu

tions

--

--

-31,7

66

31,7

66

-31,7

66

-31,7

66

Deposits

and

oth

er

accounts

--

--

-754,8

82

754,8

82

-754,8

82

-754,8

82

Derivative

financia

lliabilitie

s-

335

--

--

335

--

335

335

Borr

ow

ings

from

localand

fore

ign

banks/I

nstitu

tions

--

--

-216,4

48

216,4

48

-216,4

48

-216,4

48

Oth

er

liabilitie

s-

--

--

74,1

41

74,1

41

-74,1

41

-74,1

41

-335

--

-1,0

77,2

37

1,0

77,5

72

-1,0

77,2

37

335

1,0

77,5

72

Carr

yin

gam

ou

nt

Fair

valu

e

(All

am

ounts

inm

illions

ofN

aira

unle

ss

oth

erw

ise

sta

ted)

CO

NS

OL

IDA

TE

DA

ND

SE

PA

RA

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FIN

AN

CIA

LS

TA

TE

ME

NT

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ry

ea

re

nd

ed

31

De

ce

mb

er

20

15


73

NO

TE

S T

O T

HE

FIN

AN

CIA

L S

TA

TE

ME

NT

S

Ban

k

31

Decem

ber

20

14

Held

for

trad

ing

Fair

valu

e

thro

ug

h

pro

fit

or

loss

Held

to

matu

rity

Lo

an

san

d

receiv

ab

les

Avail

ab

le

for

sale

Oth

er

fin

an

cia

l

liab

ilit

ies

at

am

ort

ised

co

st

To

tal

carr

yin

g

am

ou

nt

Level

1Level

2Level

3Fair

valu

e

Fin

an

cia

lassets

Cash

and

short

term

funds

--

-251,8

05

--

251,8

05

-251,8

05

-251,8

05

Due

from

banks

and

oth

er

financia

lin

stitu

tions

--

-56,1

14

--

56,1

14

-56,1

14

-56,1

14

Fin

ancia

lassets

held

for

tradin

g1,3

84

--

--

-1,3

84

256

1,1

28

-1,3

84

Loans

and

advances

tocusto

mers

--

-598,1

97

--

598,1

97

619,8

77

619,8

77

Investm

ent

securities:

Available

for

sale

investm

ents

-Q

uote

dequity

investm

ent

--

--

2,7

18

-2,7

18

10

2,7

08

-2,7

18

Held

tom

atu

rity

investm

ents

-Tre

asury

bills

--

38,5

71

--

-38,5

71

38,3

16

--

38,3

16

-Federa

lgovern

ment

bonds

--

34,1

16

--

-34,1

16

25,6

99

--

25,6

99

Loans

and

receiv

able

sin

vestm

ents

--

Corp

ora

tebonds

140

140

-110

-110

-Sta

tegovern

ment

bonds

18,2

47

18,2

47

-16,4

77

-16,4

77

Assets

ple

dged

as

collate

ral

-Tre

asury

bills

--

7,6

54

--

-7,6

54

7,6

22

--

7,6

22

-Federa

lgovern

ment

bonds

--

15,3

91

--

-15,3

91

12,7

98

--

12,7

98

-Sta

tegovern

ment

bonds

--

-11,0

21

--

11,0

21

-10,3

73

-10,3

73

Oth

er

assets

--

-6,5

94

--

6,5

94

-6,5

94

6,5

94

1,3

84

-95,7

32

942,1

18

2,7

18

-1,0

41,9

52

84,7

01

345,3

09

619,8

77

1,0

49,8

87

Fin

an

cia

lli

ab

ilit

ies

Due

tooth

er

financia

lin

stitu

tions

--

--

-12,4

98

12,4

98

-12,4

98

-12,4

98

Deposits

and

oth

er

accounts

--

--

-818,4

57

818,4

57

-818,4

57

-818,4

57

Derivative

financia

lliabilitie

s-

288

--

--

288

--

288

288

Borr

ow

ings

from

localand

fore

ign

banks/I

nstitu

tions

--

--

-124,9

67

124,9

67

-124,9

67

-124,9

67

Oth

er

liabilitie

s-

--

--

112,2

09

112,2

09

-112,2

09

-112,2

09

-288

--

-1,0

68,1

31

1,0

68,4

19

-1,0

68,1

31

288

1,0

68,4

19

Carr

yin

gam

ou

nt

Fair

valu

e

(All

am

ounts

inm

illions

ofN

aira

unle

ss

oth

erw

ise

sta

ted)

CO

NS

OL

IDA

TE

DA

ND

SE

PA

RA

TE

FIN

AN

CIA

LS

TA

TE

ME

NT

S

Fo

ry

ea

re

nd

ed

31

De

ce

mb

er

20

15


74

NO

TE

S T

O T

HE

FIN

AN

CIA

L S

TA

TE

ME

NT

S


75





5

i Cash and short term funds and due from banks and other financial institutions

ii Investment securities (held to maturity) and assets pledged as collateral

iii Loans and advances to customers

iv Other assets

v Deposit from customers

vi Borrowings from local and foreign banks/institutions

vii Other liabilities

The estimated fair value of xed interest-bearing borrowings not quoted in an active market is based on discounted cashflows using the contractual interest rates for these debts over their remaining maturity.

The fair value for financial assets and liabilities that are not carried at fair value were determined respectively as follows:

The Group adopts a single approach in fair valuing its risk assets. This entails valuing all facilities with variable and fixed

interest rates using the discounted cash flow approach (Level 3). The Group’s variable rate facilities are indexed to the

Central Bank of Nigeria Monetary Policy Rate or Nigeria Interbank O ering Rate, with a spread to cover for the inherent

risk of individual facilities.

The bulk of these financial assets have short (less than 3months) maturities with the carrying amounts of the financial

assets being a reasonable approximation of fair value.

Fair values of customers’ deposits have been determined using discounted cash flow techniques applying the rates on

deposits of similar maturities and terms to discount the contractual cash flows.

Financial instruments at fair value (including those held for trading, fair value through profit or loss, derivatives and

available-for-sale) are either priced with reference to a quoted market price for that instrument or by using a valuation

model. Where the fair value is calculated using a valuation model, the methodology is to calculate the expected cash flows

under the terms of each specific contract and then discount these values back to a present value. The expected cash flows

for each contract are determined either directly by reference to actual cash flows implicit in observable market prices or

through modelling cash flows using appropriate financial markets pricing models. Wherever possible these models use as

their basis observable market prices and rates including, for example, interest rate yield curves, equities and prices.

The carrying amount of cash, short term funds and due from banks and other financial institutions are reasonable

approximation of their fair value.

The fair value for investment securities is based on market prices from financial market dealer price quotations.Where this

information is not available, fair value is estimated using quoted market prices for securities with similar credit, maturity

and yield characteristics.

Fair values of nancial assets and liabilities continued

Fair values of nancial assets and liabilities carried at fair value

Fair values of nancial assets and liabilities not carried at fair value

The carrying amount of nancial liabilities in other liabilities is a reasonable approximation of their fair values.


76

6

a

b

The present value of the retirement benet obligations depends on a number of factors that are determined on an actuarialbasis using a number of assumptions. Any changes in these assumptions will impact the carrying amount of pensionobligations. The assumptions used in determining the net cost (income) for pensions include the discount rate. The Groupdetermines the appropriate discount rate at the end of each year. This is the interest rate that should be used to determinethe present value of estimated future cash outows expected to be required to settle the pension obligations.

In determining the appropriate discount rate, the Group considers the interest rates of Federal Government of Nigeria bondsthat are denominated in the currency in which the benets will be paid and that have terms to maturity approximating theterms of the related pension liability. Other key assumptions for pension obligations are based in part on current marketconditions. Please refer to note 42.1d for principal assumptions and sensitivity of the dened benet obligation to changes inthe weighted principal assumptions.

Signicant accounting judgments, estimates and assumptions

Allowances for credit losses

Assets accounted for at amortised cost are evaluated for impairment on a basis described in accounting policy 2.9. Thespecic counterparty component of the total allowances for impairment applies to claims evaluated individually forimpairment and is based upon management’s best estimate of the present value of the cash ows that are expected to bereceived. In estimating these cash ows, management makes judgements about a counterparty’s nancial situation and thenet realisable value of any underlying collateral. Each impaired asset is assessed on its merits, and the workout strategy andestimate of cash ows considered recoverable are independently approved by the Credit Risk function.

Collectively assessed impairment allowances cover credit losses inherent in portfolios of loans and advances and held tomaturity investment securities with similar economic characteristics when there is objective evidence to suggest that theycontain impaired loans and advances and held to maturity investment securities, but the individual impaired items cannot yetbe identied. A component of collectively assessed allowances is for country risks.

Dened benets plan

In assessing the need for collective loan loss allowances, management considers factors such as credit quality, portfolio size,concentrations, and economic factors. In order to estimate the required allowance, assumptions are made to dene the wayinherent losses are modelled and to determine the required input parameters, based on historical experience and currenteconomic conditions. The accuracy of the allowances depends on how well future cash ows for specic counterpartyallowances and the model assumptions and parameters used in determining collective allowances are estimated. Please referto note 3 for sensitivity analysis of the exposure at default to changes to the emergence period (EP), loss given default (LGD)and probability of default (PD).

The Group’s nancial statements and its nancial result are inuenced by accounting policies, assumptions, estimates andmanagement judgement, which necessarily have to be made in the course of preparation of the consolidated nancialstatements. The Group makes estimates and assumptions that affect the reported amounts of assets and liabilities within thenext nancial year. All estimates and assumptions required in conformity with IFRS are best estimates undertaken inaccordance with the applicable standard. Estimates and judgements are evaluated on a continuous basis, and are based onpast experience and other factors, including expectations with regard to future events. Accounting policies andmanagement’s judgements for certain items are especially critical for the Group’s results and nancial situation due to theirmateriality.

The signicant judgements made by management in applying the Group's accounting policies and the key sources ofestimation uncertainty in these nancial statements, which together are deemed critical to the Group's results and nancialposition, are as follows:





c

i

ii

Valuation of nancial instruments

Financial instruments in Level 1

The fair value of nancial instruments traded in active markets is based on quoted market prices at the balance sheet date. Amarket is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industrygroup, pricing service, or regulatory agency, and those prices represent actual and regularly occuring market transactions onan arm's length basis. The quoted market price used for nancial assets held by the Group is the current mid price.Instruments included in Level 1 comprise primarily equity and debt securities classied as held for trading securities oravailable for sale.

The fair value of nancial instruments that are not traded in an active market is determined by using valuation techniques.These valuation techniques maximise the use of observable market data where it is available and rely as little as possible onentity specic estimates. If all signicant inputs required to fair value an instrument are observable, the instrument isincluded in level 2.

The Group uses widely recognised valuation models for determining the fair value of its financial assets. The fair values ofunquoted equity investments have been generally derived using the adjusted fair value comparison approach. Quoted priceper earning or price per book value, enterprise value to EBITDA ratios of comparable entities in a similar industry wereobtained and adjusted for key factors to reect estimated ratios of the investment being valued.


Adjusting factors used are the Illiquidity Discount which assumes a reduced earning on a private entity in comparison to apublicly quoted entity. The unobservable inputs used entails average P/B and P/E multiples of comparable companies andmedian of Enterprise value to EBITDA ratio (EV/EBITDA) of similar comparable companies.

The Group’s accounting policy on fair value measurements is discussed under note 2.6. The Group measures fair values usingthe following hierarchy of methods.

If one or more of the signicant inputs is not based on observable market data, the instrument is included in Level 3. Specicvaluation techniques used to value nancial instruments include:

- Quoted market prices or dealer quotes for similar instruments;- The fair value of interest rate swaps is calculated as the present value of the estimated future cash flows based onobservable swap curves which is the main input into the valuation;- Other techniques, such as discounted cash ow analysis, are used to determine fair value for the remaining nancialinstruments.





77


Description

Valuation

technique

Unobservable

inputs

Range of

unobservable

inputs

Relationship of

unobservable

inputs to fair

value

Group Bank

Nigeria Interbank

Settlement Systems

2,828 2,828 Adjusted fair

value

comparison

approach

Median Price to

earnings (P/E)

ratio of similar

comparable

companies

P/E 7.4 to 47.8

Illiquidity ratio

15.0%

The higher the

P/E ratio of

similar trading

companies, the

higher the fair

value

Unified Payment Services

Limited


value

comparison

approach

Median of

Enterprise

value to EBITDA

ratio

(EV/EBITDA) of

similar

comparable

companies

EV/EBITDA

3.4 to 7.9

Illiquidity ratio

15%

The higher the

EV/EBITDA ratio

of similar trading

companies, the

higher the fair

value

AFREXIM Bank

796 796 Adjusted fair

value

comparison

approach

Median Price to

Net book value

(P/BV) ratio of

similar

comparable

companies

P/BV 0.9 to 1.2

Illiquidity ratio

15%

The higher the

P/BV ratio of

similar trading

companies, the

higher the fair

value

FMDQ OTC Securities

Exchange


value

comparison

approach

Median Price to

earnings (P/E)

ratio of similar

comparable

companies

P/E 12.7 to

26.9

Illiquidity ratio

15%

The higher the

P/E ratio of

similar trading

companies, the

higher the fair

value

FSDH Merchant Bank


value

comparison

approach

Median Price to

Net book value

(P/BV) ratio of

similar

comparable

companies

P/BV 0.2 to 1.7

Illiquidity ratio

15%

The higher the

P/BV ratio of

similar trading

companies, the

higher the fair

value

Trustfund Pensions Plc


value

comparison

approach

Median Price to

Net book value

(P/BV) ratio of

similar

comparable

companies

P/BV 1.83 to

5.89

Illiquidity ratio

15%

The higher the

P/BV ratio of

similar trading

companies, the

higher the fair

value7,173 7,173

Fair value at 31 December

2015

Information about fair value measurements using significant unobservable inputs (Level 2)





78


iii

31

December

31

December2015 2014

At 1 January 1,017 -

- 1,017

Transfers out of level 3 (759) -

Net fair value changes (258) -

At 31 December - 1,017

Information about fair value measurements using significant unobservable inputs (Level 3)

Description

Fair value at

31 December

2014

Valuation

technique

Unobservable

inputs

Range of

unobseravble

inputs

Relationship of

unobservable

inputs to fair

value

FSDH Merchant Bank 1,017

Discounted

cash flows

- Risk adjusted

discount rate

- Cash flow

estimates

Discount rate

10% to 12%

The higher the

spread above the

risk-free rate

would result in a

lower fair value

The following table presents the changes in level 3 instruments for the year ended 31 December 2015 and 31 December

2014.

Acquired through business combination

Group

The transfers out of level 3 were due to the availability of observable inputs that were included in the valuation of the FSDH

investment. The entity's policy on timing is to deem that the transfers happened at the end of the reporting period.

Reconciliation of level 3 items


The Group uses widely recognised valuation models for determining the fair value of its financial assets. Valuation techniques

include net present value and discounted cashflow models. Assumptions and inputs used in valuation technique include risk

free and discount rate. The objective of valuation techniques is to arrive at a fair value measurement that reflects the price

that would be received to sell the asset or paid to transfer the liability in an orderly transaction between market participants

at the measurement date.





79


7 Interest income

Cash and short term funds

Loans and advances to customers:

- Term loans

- Overdraft

- Finance lease receivables



- Available for sale

- Held to maturity

- Loans and receivables

8 Interest expense

Savings deposits

Time deposits

Interbank takings

Borrowed funds

Current deposits

9 Loan impairment charges

Specific impairment


10 Fee and commission income

Commission on turnover

Commission on telex transfer

Commission on off-balance sheettransactionsRemittance fees

Letters of credit commission and fees

Commission on cheque book issued

Card related commission

Collection revenue

Other fee and commission income

Interest income for the Group for the year ended 31 December 2015 includes N1.2 Billion (2014:N1.3 billion) accrued

on impaired financial assets.


2015 2014 2015 2014

1,965 3,790 2,392 3,546

71,111 60,961 69,905 60,621

21,925 15,689 21,925 15,689

2,517 2,691 2,517 2,691

1,834 4,735 1,834 4,673

2,426 - 2,037 -

18,341 12,176 17,269 12,056

7,789 7,805 7,680 7,805

127,908 107,847 125,559 107,081

Group Bank


2015 2014 2015 2014

3,041 2,027 3,018 2,013

53,723 30,594 54,461 30,531

9,471 3,268 9,391 3,268

7,088 5,985 7,088 5,985

3,670 2,698 4,127 2,698

76,993 44,572 78,085 44,495


2015 2014 2015 2014

16,686 13,475 17,917 14,293

10,850 5,517 10,789 5,413

27,536 18,992 28,706 19,706


2015 2014 2015 2014

1,830 3,044 1,759 2,993

2,319 1,739 1,974 1,739

730 469 730 452

4,645 2,192 4,630 2,192

1,448 172 1,364 104

385 109 381 106

2,423 2,323 2,419 2,323

1,904 3,378 1,904 3,378

1,178 1,488 970 1,245

16,862 14,914 16,131 14,532

Group Bank

Group Bank

Group Bank





80



81

11 Fee and commission expense

NEFT/NIBSS transfer charges

Bank charges

Other fee and commission expense

12 Net trading income

Foreign exchange translation gains

(unrealised)Foreign exchange trading income

Net fair value changes in held for trading

securities

13 Other operating income

Revenue collection income

Other investment income

Rental income

Recoveries on loans previously written off(Loss)/gain on disposal of property and

equipmentGain on disposal of equity investments

Sundry income

14 Impairment charge on other financial

assets

Impairment charge on other assets and

equity securities

15 Employee benefit & compensation cost

Wages & salaries

Defined contribution

Defined benefit

Other staff cost (note 15.1)Termination expenses

Dividend income on available for sale equity

investment

Net fair value loss arising from derivative

instrument


2015 2014 2015 2014

452 299 452 299

1,181 1,237 1,165 1,237

168 348 168 319

1,801 1,884 1,785 1,855


2015 2014 2015 2014

(47) (39) (47) (39)

10,633 1,253 9,922 1,251

2,168 7,030 2,168 7,006

703 1,008 712 1,008

13,457 9,252 12,755 9,226


2015 2014 2015 2014

317 18 264 18

- 490 - 490

98 77 - -

114 20 81 20

2,561 1,340 2,530 1,337

(77) 201 (92) 201

555 631 555 631

2,083 1,952 1,728 1,910

5,651 4,729 5,066 4,607


2015 2014 2015 2014

7,145 1,959 6,251 1,959

7,145 1,959 6,251 1,959


2015 2014 2015 2014

33,125 16,383 32,052 16,194

482 688 448 682

2,061 2,259 2,061 2,259

870 346 870 346

1,691 - 1,691 -

38,229 19,676 37,122 19,481

Bank

Group Bank

Group Bank

Group

Group

Group

Bank

Bank





15.1 Other staff cost

15.2 Employees and directors

a Employees

The average number of persons employed by the Group during the year was as follows:

Executive directors

Management

Non-management

N300,001 - N2,000,000

N2,000,001 - N2,800,000

N2,800,001 - N3,500,000

N3,500,001 - N4,000,000

N4,000,001 - N5,500,000

N5,500,001 - N6,500,000

N6,500,000 - N7,800,000

N7,800,001 - N9,000,000

N9,000,001 and above

b Directors' emoluments

Fees and sitting allowances

Other director expenses and benefits

Total directors' related expenses (note 16)

Executive compensation

Chairman

Highest paid director

The number of employees of the Group, other than directors, who received emoluments in the following ranges

(excluding pension contributions and certain benefits) were:

Remuneration paid to the Directors was:

Fees and other emoluments disclosed above include amounts paid to:

Other staff cost represent benets accruing to employees with respect to loans granted at below market interest rate


2015 2014 2015 2014

8 4 8 4

49 202 37 164

4,351 4,600 3,986 2,805

4,408 4,806 4,031 2,973

BankGroup


2015 2014 2015 2014Number Number Number Number

554 358 264 262

40 54 - -

17 27 - -

722 773 720 521

1,251 1,177 1,245 569

4 361 - -

690 697 688 618

607 433 605 396

515 922 501 603

4,400 4,802 4,023 2,969

Group Bank


2015 2014 2015 2014

40 36 33 30

209 204 188 198

249 240 221 228

390 294 390 294

639 534 611 522

BankGroup

5 5 5 5

84 84 84 84





82



83


2015 2014 2015 2014Number Number Number Number

Below N1,000,000 - 1 - 1N1,000,000 -N2,000,000 - - - -N2,000,001 -N3,000,000 - 1 - 1N3,000,001 -N4,000,000 8 8 8 8N4,000,001 -N5,000,000 1 1 1 1N5,000,001 and above 8 5 8 5

17 16 17 16

The number of directors who received fees and other emoluments (excluding pension contributions and certain

benefit) in the following ranges was:

Group Bank





Gender analysis

Analysis of total employees - Bank 2015

Male Female Male Female

Full staff 2,434 1,597 60% 40%

Support 3,196 2,722 54% 46%

Employees 5,630 4,319 57% 43%

Analysis of board and top management staff

Board Member (Executive

and Non-Executive

Directors)

12 5 71% 29%

Top Management Staff (AGM-GM) 31 6 84% 16%

43 11 80% 20%

Further analysis of board and top management staffby gender

Assistant General Managers 19 3 86% 14%

Deputy General Manager 6 3 67% 33%

General Managers 6 - 100% 0%

Executive Directors 3 3 50% 50%

Deputy Managing Director - 1 0% 100%

Managing Director/CEO 1 - 100% 0%

Non-Executive Directors 8 1 89% 11%

43 11 80% 20%

Percentage

c


84





16 Administration and general expenses


2015 2014 2015 2014

Advertising and business promotion 1,306 3,394 1,282 3,383

Communication and operational cost 2,701 1,676 1,546 1,647

Insurance costs 990 872 1,012 853

Legal and professional fees 1,726 1,202 1,621 1,196

NDIC insurance premium 3,707 3,316 3,705 3,316

Repairs and maintenance 2,952 3,442 2,880 3,408

Transport, travel, accommodation 493 2,278 465 2,254

Stationery and printing 2,350 2,102 2,336 2,092

Security expenses 1,651 1,178 1,619 1,175

Training expenses 413 476 412 470

Contract services 3,161 2,340 3,161 2,306

Charities and donations 64 457 62 457

Directors' related expenses 249 240 221 228

AMCON sinking fund expenses 7,038 5,570 7,038 5,570

Utilities 727 342 640 302

Ofce expenses 1,030 1,115 1,006 1,107

Newspapers and periodicals 12 12 12 10

Rents and rates 1,918 975 1,778 910

Auditors remuneration 258 157 210 150

Penalties for non-compliance with banking

regulations (note 16.1)

4,065 330 4,063 330

Impairment of intangible assets 212 - 212 -

Other administrative expenses 3,851 3,321 3,403 3,397

40,874 34,795 38,684 34,561

BankGroup

16.1 Contravention of Banks and other financial Institutions Act, CAP B3 LFN 2004 (BOFIA)

Bank 2015

Banking legislation Penalties

Late remittance of FGN MDAS deposit toTSA

4,005

Inadequate Disclosure of Public Sector

Accounts

22

CBN guidelines 16

CBN guidelines 14

Failure to meet the TSA deadline 4

CBN guidelines 2

4,063

17 Depreciation and amortisation


2015 2014 2015 2014

Depreciation of property, plant and

equipment (note 31)

7,101 3,847 6,930 3,718

Amortisation of intangible assets (note 32) 1,845 543 1,815 406

8,946 4,390 8,745 4,124

Group Bank

Section 64(1) of BOFIA CAP B3, LFN 2004

Infractions noted based on risk assessment of the

bank

Penalty for various infractions on Anti-money

laundering and combating the financing of terrorism

(AML/CFT)

CBN Circular: BSD/DIR/GEN/LAB/08/048 OF

September 7, 2015

CBN Circular: BSD/DIR/GEN/LAB/08/048 OF

September 7, 2015

Penalty of facilities granted to Public Sector(StateGovernment)

Nature of contravention

The bank contravened certain sections of the Banks and Other Financial Institutions Act (BOFIA) CAP B3, LFN 2004,

and other regulatory guidelines during the year as stated below:





85


18 Earnings per share

Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to

assume conversion of all dilutive potential ordinary shares.

Basic earnings per share (EPS) is calculated by dividing the net profit/(loss) attributable to shareholders by the

weighted average number of ordinary shares in issue during the year, excluding the average number of ordinary

shares purchased by the members of the group and held as treasury shares. Where a stock split has occurred, the

number of shares in issue in the prior year is adjusted to achieve comparability.


2015 2014 2015 2014

(Loss)/profit attributable to equity holders (40,804) 18,668 (42,423) 8,629

Number of ordinary shares in issue as at

year end1

13,637 13,637 13,880 13,880

Shares in issue for full year 12,976 12,976 13,219 13,219

Bonus issue 661 661 661 661

Time weighted average number of ordinary

shares

13,637 13,637 13,880 13,880

Basic and diluted (loss)/earnings per

share (kobo)

(299) 137 (306) 62

The Group does not have any dilutive potential ordinary shares. Therefore, Basic EPS and Diluted EPS are the same

for the Group.

Group

1The number of ordinary shares in the Group differs from that of the bank due to treasury shares held by share trust

scheme of 243 million (December 2014: 243 million) ordinary shares.

The bank issued 661 million bonus shares in the proportion of 1 for 20 for the year ended 31 December 2015. The

EPS for the comparative period has been restated as if the bonus issue had taken place at the start of the

comparative period.

Bank

2

2





86


19 Cash and balances with central banks

Cash in vault

Operating account with the central banks

Included in cash and cash equivalents

Cash reserve with central banks

19.1 Cash and cash equivalents

Cash in vault (note 19)

Operating account with the central banks (note 19)

Treasury bills with original maturity of

90daysDue from banks and other financial

institutions excluding long term placements

and cash collateral

20 Due from banks and other financial institutions

Current account balances within Nigeria

Current account balances and placements

outside NigeriaPlacements with other banks

Current

21 Financial assets held for trading

Treasury Bills

Federal Government of Nigeria Bonds

Corporate bonds

Equities

Current

Trading securities are fair valued through profit or loss. They were acquired principally for the purpose of trade in thenear term and to take advantage of favourable uctuations in the market price of the asset. Gains or losses relatingto trading securities that are measured at fair value are included in note 12.

Cash and cash equivalents does not include restricted cash with the Central Bank of Nigeria (CBN) which is notavailable for use by the group for normal day to day cash operations. Cash and cash equivalents also include termplacement or investments with original maturity dates of 90 days or less.


2015 2014 2015 2014

44,158 52,609 42,401 44,765

7,574 10,143 6,909 7,717

51,732 62,752 49,310 52,482

153,415 237,892 153,415 199,323

205,147 300,644 202,725 251,805


2015 2014 2015 2014

44,158 52,609 42,401 44,765

7,574 10,143 6,909 7,717

- 178 - 178

34,738 72,510 33,324 55,646

86,470 135,440 82,634 108,306

Group Bank

Group Bank


2015 2014 2015 2014

2,834 1,602 2,699 1,602

22,440 56,210 21,415 48,010

11,757 15,166 11,503 6,502

37,031 72,978 35,617 56,114

37,031 72,978 35,617 56,114

37,031 72,978 35,617 56,114


2015 2014 2015 2014

131 6,614 131 1,384

- 5,068 - -

- 4,373 -

213 2,228 - -

344 18,283 131 1,384

344 18,283 131 1,384

344 18,283 131 1,384

BankGroup

Group Bank





87






88


22 Loans and advances to customers


2015 2014 2015 2014


Term loans 565,204 524,687 564,460 491,064

Overdrafts 134,192 116,355 131,424 103,112

Finance lease receivables 41,772 29,244 41,772 29,229

741,168 670,286 737,656 623,405

Impairment allowance (36,272) (24,512) (37,253) (25,208)

704,896 645,774 700,403 598,197

Current 140,131 250,083 139,436 220,480

Non-current 564,765 395,691 560,967 377,717

704,896 645,774 700,403 598,197

22.1 Movement in impairment allowance31 December 31 December 31 December 31 December

2015 2014 2015 2014

Specific impairment

Balance at 1 January 16,766 11,375 17,611 11,349

Charge for the year 16,686 13,475 17,917 14,293

Write-offs for the year

Balance at 31 December 24,487 16,766 25,678 17,611



Charge for the year 10,850 5,517 10,789 5,413

Write-offs for the year

Balance at 31 December 11,785 7,746 11,575 7,597

Total impairment 36,271 24,512 37,253 25,208

Group Bank

Group Bank

(8,965) (8,084) (9,850) (8,031)

(6,811) (9,382) (6,811) (9,427)

22.2 Finance lease receivables

Finance lease gross

Unearned income

Net investment in finance lease

Gross investment in finance lease, receivable:

Less than one year

Between one and five years

Later than five years

Unearned income

Present value of minimum lease payments

The present value of minimum lease payments is analysed as follows:

Less than one year

Between one and five years

Later than five years

Current

Non current

23 Available for sale investments

Equity investment

Treasury bills

Bonds

Current

Non-current

24 Held to maturity investments

Treasury bills

Federal Government of Nigeria bonds

Current

Non-current


2015 2014 2015 2014

41,987 29,299 41,987 29,284

(215) (55) (215) (55)

41,772 29,244 41,772 29,229

9,840 613 9,840 613

5,132 16,495 5,132 16,480

27,015 12,191 27,015 12,191

41,987 29,299 41,987 29,284

(215) (55) (215) (55)

41,772 29,244 41,772 29,229

Group Bank

9,840 612 9,840 613

4,917 16,466 4,917 16,448

27,015 12,166 27,015 12,168

41,772 29,244 41,772 29,229

9,840 612 9,840 613

31,932 28,632 31,932 28,616

41,772 29,244 41,772 29,229


2015 2014 2015 2014

9,540 8,336 7,184 2,718

21 3 19 -

5,314 75 2,609 -

14,875 8,414 9,812 2,718

2,649 1,832 2,628 -

12,226 6,582 7,184 2,718

14,875 8,414 9,812 2,718


2015 2014 2015 2014

11,351 87,772 3,626 38,571

39,405 37,329 39,405 34,116

50,756 125,101 43,031 72,687

11,551 78,578 8,953 38,758

39,205 46,523 34,078 33,929

50,756 125,101 43,031 72,687

Group Bank

Group Bank





89


25 Loans and receivables investments

Corporate bonds

State government bonds

Euro bonds

Current

Non-current

26 Assets pledged as collateral

Federal Government of Nigeria Bonds

Treasury bills

State Government BondsCorporate Bonds

Current

Non current

The related liability for assets pledged as collateral include:

Borrowings (Note 37)

Bank of industryAfrexim

United Bank for Africa Plc New York

Due to other financial institutions (Note 34)

Wema Bank

First Bank

Diamond bank

Zenith Bank

In connection with the bank’s financing and trading activities, the bank has pledged assets to secure its borrowings.

The bank is not allowed to pledge these assets as security for other borrowings or to sell them to another entity. The

carrying values of the Group's pledged assets are as follows:

In addition, included in cash and due from banks at 31 December 2015 is $11.7 Million (2014: $2.8Million), of cash

to collateralize the bank's obligations under an interest rate swap, Mastercard and Visa program and other

borrowings.

Assets pledged as collateral for both periods relate to assets pledged to Federal Inland Revenue Service (FIRS),

Nigerian Interbank Settlement System (NIBSS), Interswitch Nigeria Limited, Bank of Industry, AFREXIM, and

Unified Payment Services Limited for collections and those pledged as collateral for interbank transactions with

Diamond bank , First bank, Wema bank and Zenith bank.


2015 2014 2015 2014

3,087 7,557 2,975 140

27,742 25,098 26,824 18,247

4,120 3,403 4,120 -

34,949 36,058 33,919 18,387

4,805 18,167 4,805 496

30,144 17,891 29,114 17,891

34,949 36,058 33,919 18,387

Group Bank


2015 2014 2015 2014

33,878 34,319 33,878 15,391

21,286 44,830 21,286 7,654

12,731 11,021 12,731 11,021

806 - 806 -

68,701 90,170 68,701 34,066

30,425 71,352 30,425 15,248

38,276 18,818 38,276 18,818

68,701 90,170 68,701 34,066

Group Bank

12,696 19,154 12,696 19,154

20,227 12,493 20,227 12,493

- 11,766 - 11,766

32,923 43,413 32,923 43,413

3,000 2,505 3,000 -

2,000 - 2,000 -

5,000 - 5,000 2,505

7,000 - 7,000 -

49,923 45,918 49,923 45,918






90

27 Prepayment and other assets


2015 2014 2015 2014

Financial assets

Accounts receivable 3,702 7,093 3,701 6,910

Sundry receivables 8,443 3,020 6,714 2,961

Intercompany receivables - - 7,845 1,637

12,145 10,113 18,260 11,508

Impairment allowance (see note 27.1) (10,785) (3,640) (11,165) (4,914)

1,360 6,473 7,095 6,594

Non-financial assets

Prepayments 5,510 6,212 5,253 3,788

Inventories 3,103 2,384 3,095 2,237

8,613 8,596 8,348 6,025

Net prepayment and other assets 9,973 15,069 15,443 12,619

Current 8,264 8,857 13,775 8,831

Non-current 1,709 6,212 1,668 3,788

9,973 15,069 15,443 12,619

27.1 Movement in impairment allowance


2015 2014 2015 2014


Charge to profit or loss (note 14) 7,145 1,959 6,251 1,959

Write offs - (17) - -

10,785 3,640 11,165 4,914

28 Trading properties

31 December 31 December

2015 2014

Balance, beginning of the year 3,866 -

Acquired through business combination - 3,866

Disposals of trading properties (7) -

Balance, end of the year 3,859 3,866

Current 3,859 3,866

3,859 3,866

Group

Group Bank

Group Bank

This represents the cost of real estate properties held by the Group which are designated for resale to customers. The

movement on the trading properties account during the year was as follows:





91


29 Investment properties


2015 2014

At beginning of the year 1,995 -

Additions during the year - 1,995

Surplus on revaluation 13 -

At end of the year 2,008 1,995

Non-current 2,008 1,995

2,008 1,995

Investment properties are made up of the following:


2015 2014

94 Broad Street Property 502 502

Owerri property 2, Imo 402 400

Umuahia property, Abia 241 240

Fair Trade Complex, Abuja 200 200

Ojuelegba property, Surulere 165 165

Atari chamber property, Benin 258 248

1 and 3 Park Road property, Zaria 115 115

Oyo Alaafin property 50 50

Ibadan property, Oyo 75 75

2,008 1,995

The fair value measurement (recurring) for the investment properties of N2.008 bn (2014: N1.9995 bn) has been

recognised as level 2 in the fair value hierarchy.

The properties were valued by Osas & Oseji (Estate Surveyors and Valuers, FRC/2012/0000000000522), independent

valuers not related to the Group. Osas & Oseji are members of the Nigerian Institute of Estate Surveyors and Valuers,

and have appropriate qualifications and experience in the valuation of properties. The valuation was done on the

basis of the open market value.

Investment properties comprise commercial properties held for capital appreciation. The amount recognised as rental

income in profit or loss for the year was N46 Million.

Group

Group





92





30 Investment in subsidiaries


2015 2014

Mainstreet Bank - 126,575

Skye Bank Sierra Leone 1,468 1,468

Skye Bank Guinea 1,156 1,156

Skye Bank Gambia 408 408

- -

Mainstreet Bank Estate Company Ltd 500 -

Mainstreet Insurance Brokers Company Ltd 45 -

Mainstreet International Finance 9 -

Mainstreet Micro Finance Bank Ltd 1,000 -

Mainstreet Bureau De Change 50 -

Mainstreet Securities Ltd 442 -

Mainstreet Capital Market Ltd 1,000 -

Mainstreet Bank Registrars 138 -

Bank

Skye Bank Staff Share Scheme ( SPE)

Set out below are the Group's subsidiaries. Unless otherwise stated, the subsidiaries listed below have share capital

consisting solely of ordinary shares, which are held directly by the group and the proportion of ownership interests

held equals to the voting rights held by the group. The country of incorporation is also their principal place ofbusiness.

Mainstreet Trustees and Investment Ltd 477 -

6,693 129,607


93


30 (a) Movement in investment in subsidiaries

The movement in investment in subsidiaries during the year is as follows:


2015 2014

Balance, beginning of year 129,607 3,032

Acquisition during the year - 126,575

Business combination under common control (126,575) -

Transferred from Mainstreet bank acquisition 9,674 -

Capital restructuring (6,013) -

Balance, end of year 6,693 129,607

Bank

The capital restructuring was approved by the Central Bank of Nigeria.

The capital restructuring undertaken by some of Mainstreet Subsidiaries was approved at the Annual General

Meetings on the 14th of December, 2012 and the necessary court orders/sanctions obtained. The Corporate AffairsCommission registered these various capital reductions during the reporting period in 2015.





94


30 (b) Principal subsidiaries

The group had the following subsidiaries at 31 December 2015

Name Country of

incorporation

and place of

business

Nature of

business

Proportion of

ordinary

shares

directly held

by parent (%)

Proportion

of ordinary

shares held

by non-

controlling

interests

(%)

Skye Bank Sierra Leone Sierra Leone Banking 99 1

Skye Bank Guinea Guinea Banking 73 27

Skye Bank Gambia Gambia Banking 81 19

Skye Bank Staff Share Scheme ( SPE) Nigeria 100 -

Mainstreet Bank Estate Company Ltd* Nigeria Property

development100 -

Mainstreet Insurance Brokers Company Ltd Nigeria Insurance

brokerage

100 -

Mainstreet International Finance Ireland Financial services 100 -

Mainstreet Microfinance Bank Ltd Nigeria Micro-Banking

Services100 -

Mainstreet BDC Ltd NigeriaBureau De Change

100 -

Mainstreet Securities Ltd Nigeria Financial services 94 6

Mainstreet Capital Markets

Ltd

Nigeria Capital market

operator100 -

Mainstreet Registrar Ltd Nigeria Company registrar

services

88 12

Nigeria Investments 100 -

Skye Bank

Sierra Leone

Skye Bank

Guinea

Skye Bank

Gambia

Mainstreet

Securities Ltd

Mainstreet

Registrar Ltd

Total non-controlling interest 16 581 220 47 63

Significant restrictions

Unconsolidated interests in structured entities

Mainstreet Trustees and Asset Management

Company Ltd

* This subsidiary has a wholly owned subsidiary, AEC Security Services Limited

All subsidiary undertakings are included in the consolidation. The proportion of the voting rights in the subsidiary

undertakings held directly by the parent company do not differ from the proportion of ordinary shares held.

The table below shows the total non-controlling interest for the period:

The Group does not have an interest in any structured entity that it does not consolidate.

There are no significant restrictions (contractual or otherwise) on the Group’s ability to access or use the assets and settle

the liabilities of any member of the Group to the extent that regulation does not inhibit/prohibit the group from having

access, and in liquidation scenario, this restriction is limited to its level of investment in the entity.

The non-controlling interest in respect of Skye Bank Sierra Leone is not material.

31 December

2015





95


31

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2015

39,4

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14,8

26

16,0

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4,5

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46

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933

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2,4

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150

930

1,6

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533

7,4

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37

71

366

6205

(247)

(438)

-D

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rite

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(111)

(409)

(139)

(9)

(742)

(211)

(426)

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(325)

(1,8

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(note

32)

--

--

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-(2

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88

21

47

27

5-

235

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31

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20

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15,4

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14,9

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5,9

81

103,6

86

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At

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2015

1,6

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4,2

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2,6

97

4,7

66

11,4

95

-38,9

15

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efo

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393

1,7

55

1,4

65

225

1,1

60

2,1

03

-7,1

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Dis

posals

(7)

(101)

(135)

(7)

(639)

(209)

-(1

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Tra

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(323)

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--

(4,3

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60

16

42

15

11

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31

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5,9

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13,1

81

2,6

34

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39

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00

-40,7

13

Net

book

am

ou

nt

at

31

Decem

ber

20

15

38

,36

39

,47

03

,28

21

,75

32

,52

71

,59

75

,98

16

2,9

73

(All

am

ounts

inm

illions

ofN

aira

unle

ss

oth

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CO

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OL

IDA

TE

DA

ND

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PA

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AN

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31

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20

15


96

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2014

8,6

63

14,8

61

16,9

31

2,8

78

6,5

13

10,3

81

5,3

22

65,5

49

Additio

ns

1,3

78

262

808

114

1,1

58

1,1

33

1,3

22

6,1

75

Acquis

itio

nofsubsid

iary

(note

51)

29,3

92

--

1,5

26

713

1,6

79

1,6

21

34,9

31

At

1Ja

nuary

2014

--

--

-749

260

1,0

09

Recla

ssifi

cation

--

--

-117

(117)

-D

isposals

-(3

24)

(1,6

57)

-(8

77)

(52)

(475)

(3,3

85)

Exch

ang

ediff

ere

nce

s30

27

--

55

-67

At

31

Decem

ber

20

14

39,4

63

14,8

26

16,0

82

4,5

18

7,5

12

14,0

12

7,9

33

104,3

46

Accu

mu

late

dd

ep

recia

tion

At

1Ja

nuary

2014

1,4

07

3,7

23

13,3

20

2,5

54

4,8

44

10,1

78

-36,0

26

Charg

efo

rth

eyear

209

675

1,0

48

143

695

1,0

77

-3,8

47

Recla

ssifi

cation

from

inta

ngib

leasset

(note

32)

--

--

-287

-287

Dis

posals

-(1

59)

(266)

-(7

73)

(47)

-(1

,245)

At

31

Decem

ber

20

14

1,6

16

4,2

39

14,1

02

2,6

97

4,7

66

11,4

95

-38,9

15

Net

book

am

ou

nt

at

31

Decem

ber

20

14

37

,84

71

0,5

87

1,9

80

1,8

21

2,7

46

2,5

17

7,9

33

65

,43

1

(All

am

ounts

inm

illions

ofN

aira

unle

ss

oth

erw

ise

sta

ted)

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NS

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IDA

TE

DA

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31

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pu

ter

hard

ware

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pert

y

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con

str

ucti

on

Tota

lC

ost

At

1Ja

nuary

2015

9,8

78

14,3

01

15,9

68

2,9

81

6,6

48

11,9

69

6,3

20

68,0

65

Acquis

itio

ns

on

busin

ess

com

bin

ation

6,0

60

22,9

90

1,3

26

190

637

1,6

73

1,6

21

34,4

97

Additio

ns

848

791

2,3

80

145

869

1,6

35

520

7,1

88

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po

sals

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teo

ff(1

11)

(409)

(139)

(9)

(724)

(207)

(426)

(2,0

25)

Recla

ssifi

cation

37

71

366

6205

(247)

(438)

-Recla

ssifi

cation

toin

tangib

leassets

(note

32)

--

--

-(2

06)

-(2

06)

Tra

nsfe

rs-

-(2

,268)

(325)

(1,8

66)

-(1

,621)

(6,0

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31

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ber

20

15

16,7

12

37,7

44

17,6

33

2,9

88

5,7

69

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17

5,9

76

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39

Accu

mu

late

dd

ep

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tion

At

1Ja

nuary

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1,2

31

4,2

53

14,1

53

2,6

89

4,6

67

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35

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28

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efo

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40

205

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30

Dis

posals

(7)

(101)

(134)

(6)

(621)

(204)

-(1

,073)

Tra

nsfe

rs-

-(2

,267)

(329)

(1,7

63)

--

(4,3

59)

At

31

Decem

ber

20

15

1,5

95

5,8

58

13,1

92

2,5

59

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88

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book

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ou

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31

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ber

20

15

15

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73

1,8

86

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41

42

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11

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ounts

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ofN

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unle

ss

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ted)

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1Ja

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29

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68

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nsfe

r-

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117

(117)

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ssifi

cation

from

inta

ngib

leassets

(note

32)

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--

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260

1,0

09

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posals

-(3

24)

(1,6

55)

-(8

68)

(52)

(475)

(3,3

74)

At

31

Decem

ber

20

14

9,8

78

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01

15,9

68

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81

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48

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20

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65

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58

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45

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56

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ssifi

cation

from

inta

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(note

32)

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posals

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59)

(266)

-(7

61)

(47)

-(1

,233)

At

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20

14

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31

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53

14,1

53

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28

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book

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31

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20

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47

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92

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81

83

46

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02

9,9

37

(All

am

ounts

inm

illions

ofN

aira

unle

ss

oth

erw

ise

sta

ted)

CO

NS

OL

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TE

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32 Intangible assetsBank

Computer Computer

software software

Cost

At 1 January 2014 5,417 5,229

Additions 209 190

Acquisition of subsidiary 1,886 -

Reclassification to property, plant and equipment & other asset 1 (1,051) (1,051)

At 31 December 2014 6,461 4,368

Acquisitions on business combination - 1,839

Additions 1,091 1,086

Reclassification from property, plant and equipment & other asset 1 206 206

Impairment charge (212) (212)

Exchange differences (14) -

At 31 December 2015 7,532 7,287

Amortisation

At 1 January 2014 (2,334) (2,287)

Amortisation charge (543) (406)

Group

Reclassification to property, plant and equipment 287 287

At 31 December 2014 (2,590) (2,406)

Amortisation charge (1,845) (1,815)

Exchange differences (21) -

At 31 December 2015 (4,456) (4,221)

Net book value

At 31 December 2015 3,076 3,066

At 31 December 2014 3,871 1,962





The amount represents N 206 Million (2014: N1,051 Million) reclassified from/to (in 2014) property, plant and

equipment

1


100

33 Assets classified as held for sale


2015 2014 2015 2014

At 1 January 150 217 150 217

Disposals - (67) - (67)

150 150 150 150

Current 150 150 150 150150 150 150 150

34 Due to other financial institutions


2015 2014 2015 2014

Due to banks in Nigeria 21,029 51,816 21,029 12,498

Due to banks outside Nigeria 12,081 - 10,737 -

33,110 51,816 31,766 12,498

Current 33,110 51,816 31,766 12,498

33,110 51,816 31,766 12,498

35 Deposits from customers


2015 2014 2015 2014

Current accounts 324,020 352,430 323,569 294,271

Savings account 140,441 129,591 139,209 97,320

Term deposits 149,224 210,221 152,955 174,797

Domiciliary accounts 139,460 260,060 139,149 252,069

753,145 952,302 754,882 818,457

Current 753,145 952,014 754,882 818,169

Non-current - 288 - 288

753,145 952,302 754,882 818,457

Group Bank

The valuations were arrived at by reference to direct market evidence; this is by recourse to analysis of recent sales

transaction of similar properties in similar or comparable location. Due adjustment having been made for special features of

the property where applicable.

An insignificant portion of these assets are still being classified as held for sale as a result of conditions beyond the control of

Skye Bank. In 2015, the assets were actively marketed. However, no firm commitment was received. The assets continue to

be actively marketed at prices that are reasonable and the criteria in IFRS 5 continue to be met. Hence, the assets continue

to be classified as held for sale.

Group Bank

The properties were valued by Diya, Fatimilehin & Co (A-342) (FRC/2013/NIESV/00000000754) and Jide Taiwo & Co

(FRC/2013/NIESV/00000002773) in 2014, independent valuers not related to the bank. Diya, Fatimilehin & Co and Jide

Taiwo are members of the Nigerian Institute of Estate Surveyors and Valuers, and have appropriate qualifications and

experience in the valuation of properties.

Group Bank





101


37 Borrowings from local and foreign banks/institutions


2015 2014 2015 2014

CBN - State Bailout Funds (note i) 58,204 - 58,204 -

Central Bank of Nigeria (note ii) 35,556 - 35,556 -

African Export Import Bank (note iii) 19,768 16,703 19,768 16,703

Stanbic IBTC (note iv) 18,520 5,034 18,520 5,034

CBN/BOI intervention fund (note v) 9,607 11,030 9,607 11,030

European Investment Bank (note vi) 10,153 7,171 10,153 7,171

CBN - Excess Crude Account (note vii) 10,000 - 10,000 -

Afrexim Bank (note viii) 9,772 - 9,772 -

Afrexim Bank/Citi Bank/Standard Bank (note ix) 8,582 12,493 8,582 12,493

Islamic Corporation (note x) 3,442 6,744 3,442 6,744

CBN - CACS (note xi) 2,747 8,124 2,747 8,124

Eco Bank Paris (note xii) 2,586 - 2,586 -

NOOR Bank (note xiii) 1,936 - 1,936 -

Diamond Bank (note xiv) 1,295 - 1,295 -

24,280 6,312 24,280 -

African Trade Finance - 17,175 - 17,175

Mashreq Bank - 25,476 - 25,476

United Bank for Africa Plc New York - 11,766 - 11,766

NIMASA Maritime fund - 709 - 709

Emirate NBD Banj PJSC - 2,542 - 2,542

216,448 131,279 216,448 124,967

The derivative liability represents the net present value of the interest rate swap transaction between the bank and JP

Morgan.

Group Bank

The derivative asset represent payment adjusted warrants attached to 6.25% Nigerian Par Bonds issued by the Central

Bank of Nigeria and guaranteed by the Federal Government of Nigeria in 1996. Payment adjusted rights are payable semi-

annually provided the price of bonny light remains above a certain level.

All derivative financial instruments are current in nature.

Foreign loans and borrowings for

letters of credits(note xv)

36 Derivative financial instruments

Notional

amount

Fair value

assets/

(liabilities)

Notional amount Fair value

assets/

(liabilities)

Group

Interest rate swap USD 100Million (335) USD 100Million (288)

Derivative instrument USD 8.5Million 178 - -

Bank

Interest rate swap USD 100Million (335) USD 100Million (288)

31 December 2015 31 December 2014





102



103

Borrowings

Local 134,634 124,535 134,634 118,223

Foreign 81,814 6,744 81,814 6,744

216,448 131,279 216,448 124,967

Current 106,384 110,830 106,384 110,289

Non-current 110,064 20,449 110,064 14,678

216,448 131,279 216,448 124,967





i

ii

iii

iv

v

vi The amount of N 10.2 billion (USD 51 million) (December 2014: N 7.171 billion (USD 42.7 million)) represents the balanceof a global credit granted to Skye bank used for the nance of small and medium sized investment projects in the productiveand human capital sectors in Nigeria. The facility is due to mature in May 2022. The facility is granted at a rate of 6.27%per annum.

This amount represents on-lending facilities to various customers of the bank availed by the Central Bank of Nigeria (CBN).CBN, in a bid to unlock the credit market in Nigeria during the nancial year 2010, approved for disbursement a total sum ofN500 billion Debenture Stock through the Bank of Industry to various participating banks for onward lending to NigerianSME/Manufacturing sector. The bank accessed this fund to the tune of N9.5 billion for Agricultural nancing, N9.1 billion forManufacturing/SME funds and N263 million on Aviation with a term of 15 years at the rate of 1% per annum.

The amount of N18.52 billion (2014: Nil) represents the balance on commercial papers issued by Skye bank to StanbicIBTC. This facility has an average discount rate of 13.56%. These commercial papers have tenors that range between 90 to270 days.

The amount of N19.768 billion (USD100 million) (December 2014: N16.702 billion ( USD100 million)) represents thebalance on term loan facility granted by African Export-Import Bank on the 30th of December 2011 for a period of 7 years.The facility was obtained to fund the Bank's customers engaged in trade and project related activities. The borrowing is tomature in 2018 with interest payment on a quarterly basis in arrears and principal to be repaid in full on nal maturity date.Interest rate of 6.3% per anum plus matching LIBOR for 3 months deposit in US dollars.

The amount of N58.2 billion represents the bailout facilities granted to the Bank by the Central Bank of Nigeria for on-lending to state governments for payment of salaries of the workers of each states. The facility has a tenor of 20 years witha 2% interest rate per annum payable to the CBN. The Bank is under obligation to disburse the loan at an interest rate of9% per annum.

The amount of N35.6 billion represents a short term facility granted to the Bank by the Central Bank of Nigeria. The facilitywas granted to the Bank at an interest rate of Monetary Policy Rate (MPR) +200 basis points for 90 days.

vii The amount of N10 billion represents the excess crude account loan granted to the Bank by the Central Bank of Nigeria foron-lending to state governments. The facility has a tenor of 20 years with a 2% interest rate per annum payable to the CBN.The Bank is under obligation to disburse the loan at an interest rate of 9% per annum.


104





viii

ix

x

xi

xii

xiii

The balance represent a short term trade nance facility of $15 million availed to Skye Bank Plc by Islamic Corporation forthe Development of Private Sector on 24 October 2014 with a maturity date of 21 July 2016 for an interest rate of 6.25%per annum.

The amount of N2.6 Billion (2014: Nil) represents the balance on a short term loan facility granted to Skye Bank by EcoBank Paris for the nancing of the borrower working capital. The facility is at an interest rate of 3.30%. The tenor is 230days.

This amount of N9.7billion (USD 49 million) represents a short term credit facility granted by African Export-Import Bank on9 November 2015 to Skye bank. The facility was obtained to nance short term trade transactions which includes but notlimited to confirmation of letters of credit, issuing of counter guarantees, purchase of notes availed by Skye Bank andpurchase of invoices guaranteed by Skye Bank. The borrowing is to mature in 2016 with an interest rate of 3% and principalrepayment at maturity.

The amount of N8.582billion (USD 43.78million) (December 2014: N 12.493 billion (USD 74 million)) represents the balanceon a syndicated facility granted on 9th May 2012 for a period of 5 years with an interest rate of LIBOR + 6% with AfricanExport-Import Bank, Citi Bank and Standard Bank as lead banks. Interest and principal are payable quarterly basis.

This represents the outstanding balance on the on-lending facilities provided by the Central Bank of Nigeria through theCommercial Agricultural Credit Scheme (CACS). This is an intervention facility granted by the Central bank of Nigeria incollaboration with the Federal Government of Nigeria. The facility is for a maximum period of 7 years at a zero percentinterest rate to the Bank. The Bank did not provide security for this facility.

This amount of N1.9 billion (USD 9.8 million) (2014: Nil) represents the balance on the facility agreement between Skyebank and NOOR Bank. This facility was granted at an interest rate of 3.824% with maturity date set on 17th August, 2016

xiv

xv Borrowings from correspondence banks include loans from foreign banks utilised in funding letters of credits negotiated onbehalf of Skye Bank's customers for international trade.

This represents the balance on a short term facility of $6.5 Million granted to Skye Bank to facilitate import trade in goodsand services by Nigerian buyers. The Bank wishes to issue letters of credit restricted for negotiation at the counters of, andadvised or conrmed to the respective beneciaries by Diamond Bank UK. The facility was granted at an interest rate of5.69% for 72 days


105

38 Current tax liability


2015 2014 2015 2014

Per statement of profit or loss

Current income tax 1,014 880 663 781

Education tax 14 - - -

Technology tax 19 93 - 93

Prior year under provision 73 404 - 404

Income tax charge 1,120 1,377 663 1,278

Deferred tax 1,960 (644) 1,893 (642)

3,080 733 2,556 636

Per statement of financial positionAt 1 January 5,230 1,058 1,278 1,041

Payments during the year (3,625) (1,096) (2,882) (1,041)

Income tax charge 1,120 1,377 663 1,278Exchange difference (9) - - -

Acquisition of subsidiary (note 51) - 3,891 2,456 -

2,716 5,230 1,515 1,278

38.1 Reconciliation of effective tax rate


2015 2015 2014 2014

Loss/(Profit) before income tax (37,646) 19,450

Income tax using the domestic tax rate 30% (11,294) 30% 5,835

-66% 24,907 21% 4,006

30% (11,435) -45% (9,204)

0% - 11% 2,053

0% 14 0% -

0% 19 0% 93

0% 73 2% 404

Effect of tax assessment basedon minimum tax law (note 38.1)

-3% 1,014 881

Group

- Expenses not deductible for tax

purposes- Income not subject to tax

- Tax losses for the year

Education tax

Information technology levy

Underprovision in prior years

Bank

Income tax liability is to be settled within one year

Group Group

Exempted permanent differences 17% (6,378) -21% (4,157)

0% - -3% (644)

8% (3,080) -5% (733)

Accelerated capital allowance





Reconciliation of effective tax rate


2015 2015 2014 2014

(Loss)/Profit before income tax (39,867) 9,265

Income tax using the domestic tax rate 30% (11,960) 30% 2,780

-61% 24,156 43% 4,006

24% (9,435) -95% (8,840)

0% - 22% 2,053

0% - 4% 404

0% - 1% 93

-2% 663

7% 782

Exempted permanent differences 15% (5,980) 0% -

0% - -6% (642)

6% (2,556) 6% 636

39 Accruals and other liabilities


2015 2014 2015 2014


Accounts payable 65,573 57,570 61,864 58,142

Customer deposits for letters of credit 215 6,587 215 539

Intercompany payable - - - 47,853

Manager's cheque 3,717 4,249 3,700 3,482

Accrued expenses 7,048 27,569 6,327 202

Uncleared effects 374 201 374 201

Cash card collection settlement 1,661 1,790 1,661 1,790

78,588 97,966 74,141 112,209

Current 65,788 64,157 62,079 106,534

Non-current 12,800 33,809 12,062 5,675

78,588 97,966 74,141 112,209

(i) Movement in litigation claims provision


2015 2014 2015 2014

Opening balance 3,072 - - -

Additions - - - -

Acquired upon acquisition of Mainstreet - 3,072 3,072 -

Closing balance 3,072 3,072 3,072 -

Group Bank

Effect of tax assessment based onminimum tax law (note 38.1)

Accelerated capital allowance

Based on Nigerian tax law, Company Income Tax Act 2007, current tax is determined as the higher of amount computed

based on the 30% of taxable profit, minimum tax and 30% of dividend declared. For the year ended 31 December 2015, the

Bank tax liability was based on minimum tax.

- Expenses not deductible for tax

purposes

- Income not subject to tax

- Tax losses for the year

Information technology levy

Underprovision in prior years

Group Bank

Bank Bank





106


40 Deferred tax asset and liability

Deferred income tax assets are attributable to the following items:


2015 2014 2015 2014

Deferred tax assets:

Property, plant and equipment 290 301 - -

Unrelieved losses 185 156 - -

Allowances for loan losses 6 5 - -

Retirement benefit obligation - 1 - -

481 463 - -

Deferred tax assets:

185 162 - -

296 301 - -

481 463 - -

Deferred income tax liabilities are attributable to the following items:

Liabilities Net Liabilities Assets Net

- - 4,828 - 4,828

- - - - -

- - - 1,624 (1,624)

- - - 2,118 (2,118)

200 200 - - -

2,977 2,977

190 190 139 - 139

3,367 3,367 4,967 3,742 1,225

31 December 2014

Deferred tax assets to be recovered

within 12 months

Deferred tax assets to be recovered

after more than 12 months

Retirement benefit obligation

Investment properties

Net deferred tax liabilities

Unrealised exchange difference

Group

Unrelieved loss

Group Bank

Group

31 December 2015

Property, plant and equipment

Fair value reserves

Allowance for loan losses





107


Liabilities Net Liabilities Assets Net

- - 4,826 - 4,826

- - - 1,624 (1,624)

- - - 2,118 (2,118)

200 200 - - -

2,977 2,977 - - -

3,177 3,177 4,826 3,742 1,084


2015 2014 2015 2014

3,177 4,828 3,177 4,826

190 139 - -

3,367 4,967 3,177 4,826

- 3,742 - 3,742

Deferred tax liabilities:

Deferred tax liability to be settled

after more than 12 months

Deferred tax liability to be settled

within 12 months

Deferred tax assets to be recovered after more than

12 months

31 December 2014

Group Bank

Bank

Deferred tax assets

Bank

31 December 2015



Unrelieved loss


Unrealised exchange differenceNet deferred tax liabilities





108


Group

Movements in deferred tax assets during the year:

2015

1-Jan-2015

Acquired on

business

combination

Recognised in

P&L 31-Dec-2015

301 - (11) 290

5 - 1 6

156 - 29 185

1 - (1) -

463 - 18 481

2014

1-Jan-2014

Acquired on

business

combination

Reclassification

from deferred

tax liability 31-Dec-2014

- 264 37 301

- - 156 156

- - 5 5

- - 1 1

- 264 199 463

Group

Movements in deferred tax liabilities during the year:

2015

1-Jan-2015

Recognised

in P&L

Recognised in

OCI 31-Dec-2015

4,828 (4,828) - -

Unrelieved losses (2,118) 2,118 - -

Allowances for loan losses (1,624) 1,624 - -

Retirement benefit obligation - - 200 200

- 2,977 - 2,977

Investment properties 139 51 - 190

1,225 1,942 200 3,367


Employee benefit provision




Unrelieved loss



Unrealised exchange difference

Unrelieved loss





109


Group & Bank

31 December

2015

(667)

Deferred tax effect 200

(467)

2014

1-Jan-2014

Recognised

in P&L

Acquired on

business

combination

Recognised

in OCI

Reclassification

to deferred tax

asset 31-Dec-2014

Property, plant

and equipment

5,438 (644) - (4) 37 4,827

Unrelieved loss (2,274) - - - 156 (2,118)

Allowance for

loan losses

(1,628) - - - 5 (1,623)

Retirement

benefit

(1) - - 1 -

Investment

properties

- 139 - - 139

1,535 (644) 139 (4) 199 1,225

Actuarial gains recognised in the period gross of tax (Note 42.1b)

Actuarial gains recognised in other comprehensive income net of tax

The movement in the retirement benefit obligation was as follows:





110


Bank

Movements in deferred tax liabilities during the year:

1-Jan-2015

Recognised in

P/L Recognised in OCI 31-Dec-2015

4,826 (4,826) - -

(2,118) 2,118 - -

(1,624) 1,624 - -

- 2,977 - 2,977

- - 200 200

1,084 1,893 200 3,177

Movements in deferred tax liabilities in 2014:

1-Jan-2014

Recognised in

P/L Recognised in OCI 31-Dec-2014

5,468 (642) - 4,826

Unrelieved loss (2,118) - - (2,118)

(1,624) - - (1,624)

1,726 (642) - 1,084

41 Liabilities on investment contracts


2015 2014

- 26

Current - 16

Non-current - 10

- 26

42 Retirement benefit obligation


2015 2014 2015 2014

Defined contribution plan 99 358 85 354

Defined benefit plan 7,406 6,545 7,406 6,545

7,505 6,903 7,491 6,899

Remeasurements for:

Defined benefit plan (note 42.1) 467 2,360 467 2,360

467 2,360 467 2,360



Deferred tax assets of N60Billion as at 31 December 2015 (2014: N14Billion) has not been recognised because it is not

probable that future taxable profits will be available against which they can be utilised.



Group Bank

Unrelieved loss

Statement of nancial position obligations for:

Group

Unrealised exchange differenceRetirement benefit obligation

Other managed funds





111



112




42.1 Defined benefit plan

The most recent actuarial valuation of the present value of the defined benefit obligation, in respect of the liability as at year

ended 31 December 2015, was carried out by Olurotimi.O. Okpaise (FRC/NAS/00000000738), Associate, Society of

Actuaries, America Fellow, Institute of Actuaries, England on behalf of HR Nigeria Limited.

The income statement charge included within operating profit includes current service cost, interest cost, past service costs

and gains and losses on settlement and curtailment.

The Bank operates an unfunded defined benefit plan for qualifying employees on services rendered. Under the plan, the

employees having served at least 5 years are entitled to a Gratuity of 40% of Annual Gross Salary for each year of service

rendered after the fth year with effect from 1 June, 2011. No other post-retirement benets are provided to theseemployees.

There is no funding arrangement with a trustee for the defined benefit plan as the bank pays for all obligations from its

defined benefit liability as such obligations fall due.


b. Movement in the present value of defined benefit obligations


'2015 '2014

At 1 January 6,545 7,181

Interest cost 964 958

Current service costs 1,102 1,301

Plan amendment - -

Actuarial gains recognised in other comprehensive income (see note 42.1bi) (667) (2,360)

Benefits paid (538) (535)

At 31 December 7,406 6,545


2015 2014 2015 2014

Defined contribution plan (note 15) 482 688 448 682

Defined benefit plan (note 15) 2,061 2,259 2,061 2,259

2,543 2,947 2,509 2,941

Group & Bank

GroupIncome statement charge included in operating profit

for:

Bank

Actuarial gains recognised in other comprehensive income is analysed below


2015 2014 2015 2014

i Loss/(gains) from change in assumption 262 (2,489) 262 (2,489)

(Gains)/loss from experience adjustments (729) 129 (729) 129

(467) (2,360) (467) (2,360)

c.

d.


2015 2014 2015 2014

Long term discount rate (p.a.) 12.5% 15.0% 12.5% 15.0%

Average pay increase (p.a.) 10.0% 12.0% 10.0% 12.0%

Average rate of inflation (p.a.) 9.0% 9.0% 8.0% 9.0%

Retirement age for both male and female 60 years 60 years 60 years 60 years

Withdrawal rate: >=30 years 6% 3% 6% 3%

Withdrawal rate: 31 years - 39 years 5% 5% 5% 5%



Withdrawal rate: 51 years above 3% 0% 3% 0%

Group Bank

The principal assumptions used for the purpose of the actuarial valuations were as follows.

Projected benefit expenses in respect of current service cost and interest cost on defined benefit obligation for year 2015 are

N1.10 billion and N964.33 million respectively. Had the plan discontinued as at 31 December 2015, the estimated accrued

benefits payable is N4.85 billion.

Group Bank






113

Sample age

2015 2014 2015 2014

25 7 7 7 7

30 7 7 7 7

35 9 9 9 9

40 14 14 14 14

45 26 26 26 26

2015 Group and Bank

Increase in

assumption

by 1%

Liability

changes to

Decrease in

assumption by

1%

Liability

changes to

Discount rate Decrease in

liability by N738

Million

6,668 Increase in

liability by N860

Million

8,266

Salary growth Increase in

liability by N791

Million

8,316 Decrease in

liability by N910

Million

6,615

Age rated up

by 1 year

Age rated down

by 1 year

Mortality Increase in

liability by N1

Million

7,407 Decrease in

liability by N1

Million

7,405

2014 Group and Bank

Increase in

assumption

by 1%

Liability

changes to

Decrease in

assumption by

1%

Liability

changes to

Discount rate Decrease in

liability by

731Million

5,814 Increase in

liability by

N858Million

7,403

Salary growth Increase in

liability by

N781Million

7,453 Decrease in

liability by

N908Million

5,764

Age rated up

by 1 year

Age rated down

by 1 yearMortality Increase in

liability by

N3Million

6,548 Decrease in

liability by

N3Million

6,542

Bank

Number of deaths in year of age out of 10,000 lives

Group

The rates of mortality assumed for employees are the rates published in the A67/70 Ultimate Tables, published jointly by

the Institute and Faculty of Actuaries in the UK as shown below

The sensitivity of the defined benefit obligation to changes in the weighted principal assumptions is:

Impact on defined benefit obligation

Impact on defined benefit obligation





114





The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In

practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the

sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the

defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been

applied as when calculating the pension liability recognised within the statement of nancial position. The methods andtypes of assumptions used in preparing the sensitivity analysis did not change compared to the previous year.

e Risk exposure

i Changes in bond yields

Curtailment

43 Share capital and reserves

a Share capital


2015 2014 2015 2014

Authorised

12,500 12,500 12,500 12,500

Bank

With effect from 1 January 2016, the Group discontinued the Scheme for all staff and increased employer's contribution inrespect of their existing contibution plan under the 2014 Pension Reform Act. This was communicated to all staff in March2016. The liability from the scheme was estimated at N4.85 billion.

25 billion ordinary shares of 50k each

(31 December 2014: 25 billion ordinary shares of

50k each)

Group

The group is exposed to a number of risks, the most significant of which are detailed below:

The rate used to discount post-employment benefit obligations is determined with reference to market yields at the balance

sheet date on high quality corporate bonds. In countries where there is no deep market in such bonds, the market yields on

government bonds are used. The Group is of the opinion that there is no deep market in Corporate Bonds in Nigeria and as

such assumptions underlying the determination of discount rate are referenced to the yield on Nigerian Government bonds

of medium duration, as compiled by the Debt Management Ofce. A decrease in Nigerian Government Bond yieldswill increase the plan’s liabilities.


115



116





Issued and fully paid


2015 2014

Balance, beginning of year 6,609 6,609

Issued during the year (bonus issue) 331 -

Balance, end of year 6,940 6,609

Bank

Number of shares 13,219

1 new share for every 20 661

New number of shares 13,880

b) Share premium

Share premium is the excess paid by shareholders over the nominal value of their shares

c Other reserves

i Capital reserve

The movement in the number of shares are as follows:

The sum of N7,503 million represents the surplus of nominal value of the reconstructed shares transferred from the share

capital. The consolidation of 3,751,522,394 ordinary shares of N1.00 each was sub-divided into 7,503,044,788 ordinary

shares of 50 kobo each and were credited as fully paid, and rank paripassu in all respect in the capital of the Bank. The

reconstructed shares were allocated to shareholders in the ratio of one (1) reconstructed ordinary shares of 50 kobo each

for every three (3) ordinary shares of 50 kobo each previously held by them.

The bank issued 661 million bonus shares in the proportion of 1 for 20 for the year ended 31 December 2015.

The movement on the issued and fully paid up share capital account during the year was as follows:

Bank

ii Statutory reserve

iii Small and medium scale industries equity investment scheme (SMEEIS) reserves

Nigerian banking regulations require the bank to make an annual appropriation to a statutory reserve. As stipulated by

S16(1) of the Bank and Other Financial Institutions Act, CAP B3 Laws of the Federation of Nigeria (amended), an

appropriation of 30% of profit after taxation is made if the statutory reserve is less than the paid-up share capital and 15%

of profit after taxation if the statutory reserve is greater than the paid up share capital.

The SMEEIS reserve is maintained to comply with the Central Bank of Nigeria (CBN) requirement that all licensed banks set

aside a portion of the profit after taxation in a fund to be used to finance equity investments in qualifying small and medium

scale enterprises. Under the terms of the guideline (amended by CBN letter dated 11 July 2006), the contributions will be

10% of profit after taxation and shall continue after the first 5 years but banks’ contributions shall thereafter reduce to 5%

of profit after taxation. However, this is no longer mandatory. The small and medium scale industries equity investment

scheme reserves are non-distributable. No appropriation was made to the SMEEIS reserve during the year.

iv Available for sale reserve

v Regulatory reserve

vi Translation reserve

vii Treasury reserve

d Non-controlling interest

The risk regulatory risk reserves warehouses the difference between the allowance for impairment losses on balance onloans and advances based on Central Bank of Nigeria prudential guidelines and Central Bank of the foreign subsidiaries

regulations, compared with the loss incurred model used in calculating the impairment under IFRSs.

This represents the group's share of exchange differences relating to the translation of the results and net assets of thegroup’s foreign operations.

The fair value reserve includes the net cumulative change in the fair value of available for sale investments until the

investment is derecognised or impaired.

Treasury reserve represent the initial purchase cost of the bank's shares of 242,732,870 units (31 December 2014:

242,732,870 units) held by the share trust scheme as at 31 December 2015. The share trust scheme exists for the

management of staff performance incentive.

This represents the non-controlling interest's (NCI) portion of the net assets of the Group.






117

44 Cash generated from operations


2015 2014 2015 2014

Operating profit before tax (37,646) 19,450 (39,867) 9,265

Adjustments for:

Depreciation of property and equipment 7,101 3,847 6,930 3,718

Amortisation of intangible assets 1,845 543 1,815 406

(Loss)/gain on disposal of property and equipment 77 (201) 92 (201)

(555) (631) (555) (631)

(703) (1,008) (712) (1,008)

Impairment on loans and advances 27,536 18,992 28,706 19,706

Impairment on other financial assets 7,145 1,959 6,251 1,959

Impairment of intangible assets 212 - 212 -

2,543 2,947 2,509 2,941

Net interest income (50,915) (63,275) (47,474) (62,586)

(10,633) (1,253) (9,922) (1,251)

- (8,976) -

Dividend income (317) (18) (264) (18)

(54,310) (27,624) (52,279) (27,700)

Changes in operating assets

18,641 (9,940) 7,106 (589)

Derivative financial instruments 47 39 47 39

Pledged assets (1,957) (3,432) (1,957) (3,431)

Restricted deposits 82,652 (111,012) 44,083 (111,012)

(104,629) (82,210) (94,252) (80,353)

6,881 51,489 54,551 3,726

Changes in operating liabilities

(26,552) 12,532 (33,668) 12,533

(195,523) (448) (191,540) (2,130)

Accruals and other liabilities (17,137) 40,266 (64,379) 87,793

Investment contract liabilities (26) - - -

(239,238) 52,350 (289,587) 98,196

Remittance to pension fund administrators (712) (725) (712) (725)

Payment to gratuity benefit holders (538) (535) (538) (535)

Interest paid on deposits and borrowings (71,609) (37,914) (71,967) (37,837)

Interest received on loans and advances 99,400 93,119 97,920 92,780

(265,372) (76,395) (307,585) (67,441)

(3,625) (1,096) (2,882) (1,041)

Net cash used in operating activities (268,997) (77,491) (310,467) (68,482)


Due from other financial institutions

Prepayments and other assets

Net fair value gain on financial assets held for

trading

Reconciliation of profit before tax to cash generated

from operations:

Group Bank

Net (gain)/loss on disposal of available for sale

equity investment securities

Income tax paid

Additional gratuity provision

Bargain purchase

Unrealised foreign exchange loss on revaluation







118


45 Segment reporting

45.1 Operating segments by business segment

Retail banking

Commercial banking

Treasury, Corporate and Investment banking

The Group is divided into three main business segments, as described below, which are the Group's strategic business

units. The strategic business units offer varied products and services and are managed separately based on the GroupManagement's structure.

Operating segments are reported in accordance with the internal reports provided to the Group's Executive

Management Committee which is responsible for allocating resources to the operating segments and assessing its

performance.

Retail banking incorporates private banking services, private customer current accounts, deposits, investment savings

products, custody, credit and debit cards, consumer loans and mortgages.

Commercial banking incorporates direct debit facilities, current accounts, deposits, overdrafts, loan and other credit

facilities, foreign currency and derivative products.

Treasury, corporate and investment banking incorporates financial instruments trading, structured financing and

corporate leasing.

No single external customer accounts for 10% or more of the Group’s revenue.

Information regarding the results of each reportable segment is included below. Performance is measured based on

segment profit before income tax, as included in the internal management reports that are reviewed by the Executive

Management Committee. Segment profit is used to measure performance as management believes that such

information is the most relevant in evaluating the results of certain segments relative to other entities that operate

within these industries. Inter-segment pricing is determined on an arm’s length basis.

The measurement policies the Group uses for segment reporting are the same as those used in its financial statements.

There have been no changes from prior periods in the measurement methods used to determine reported segment

profit or loss.





119


Group

31 December 2015Retail banking Commercial

banking

Treasury

corporate

Unallocated Total

Revenue:Derived from external customers 21,909 49,192 92,777 - 163,878

Derived from other business segments 413 345 (758) - -

Total revenue 22,322 49,537 92,019 - 163,878

Interest expenses (5,597) (27,537) (43,859) - (76,993)

Fee and commission

expenses

(163) (504) (1,134) - (1,801)

Net operating income 16,562 21,496 47,026 - 85,084

Expense:(7,324) (11,181) (19,724) - (38,229)

(6,132) (10,052) (24,690) - (40,874)

(1,692) (7,557) (25,432) - (34,681)

- - - (8,946) (8,946)

Total cost (15,148) (28,790) (69,846) (8,946) (122,730)

1,414 (7,294) (22,820) (8,946) (37,646)

Income tax expense - - - (3,080) (3,080)

1,414 (7,294) (22,820) (12,026) (40,726)

AssetsLoans and advances to customers 62,104 274,383 368,409 - 704,896

Others 47,066 116,978 330,457 - 494,501

Total assets 109,170 391,361 698,866 - 1,199,397

LiabilitiesDeposits from customers 316,321 263,601 173,223 - 753,145

Others 3,416 116,147 222,506 - 342,069

Total liabilities 319,737 379,748 395,729 - 1,095,214

Loan impairment charges and

impairment charges on other financial

assetsDepreciation and amortisation

Profit/(loss) before income tax fromreportable segments

Loss after income tax from

reportable segments







120


Group


banking

Treasury

corporate

Unallocated Total


Derived from other business segments 497 279 (776) 8,976 8,976

Total revenue 13,707 46,172 76,863 8,976 145,718


Fee and commission expenses (452) (867) (565) - (1,884)

Net operating income 11,472 31,488 47,326 8,976 99,262

Expense:(2,322) (7,280) (10,074) - (19,676)

Administration and general expenses (4,133) (12,957) (17,705) - (34,795)

(1,467) (4,190) (15,294) - (20,951)

Depreciation and amortisation - - - (4,390) (4,390)

Total cost (7,922) (24,427) (43,073) (4,390) (79,812)

Profit before income tax

from reportable segments

3,550 7,061 4,253 4,586 19,450

Income tax expense - - - (733) (733)

3,550 7,061 4,253 (733) 18,717


Others 80,211 162,485 499,797 - 742,493

Total assets 100,899 466,125 821,243 - 1,388,267


Others 42,107 122,665 129,961 - 294,733


Profit after income tax from

reportable segments



assets






121


Bank


banking

Treasury

corporate

Unallocated Total



Total revenue 19,681 48,788 91,042 - 159,511


Fee and commission expenses (161) (494) (1,130) - (1,785)


Expense:(7,000) (10,779) (19,343) - (37,122)

(5,349) (9,453) (23,882) - (38,684)

(1,740) (7,660) (25,557) - (34,957)

- - - (8,745) (8,745)

Total cost (14,089) (27,892) (68,782) (8,745) (119,508)

(166) (7,490) (23,466) (8,745) (39,867)

Income tax expense - - - (2,556) (2,556)

(166) (7,490) (23,466) (11,301) (42,423)


Others 43,299 110,653 327,149 - 481,101

Total assets 106,335 383,810 691,359 - 1,181,504


Others 4,503 108,821 221,550 - 334,874


Loss after income tax from

reportable segments

Loss before income tax from reportable

segments










122


Bank


banking

Treasury

corporate

Unallocated Total



Total revenue 13,606 45,894 75,946 - 135,446


Fee and commission expenses (444) (855) (556) - (1,855)


Expense:(2,293) (7,206) (9,982) - (19,481)

Administration and general expenses (4,073) (12,799) (17,689) - (34,561)

(1,517) (4,333) (15,815) - (21,665)

(399) (1,389) (2,336) - (4,124)

Total cost (8,282) (25,727) (45,822) - (79,831)

3,100 5,519 646 - 9,265

Income tax expense (636) (636)

3,100 5,519 646 (636) 8,629


Others 64,961 119,780 426,695 - 611,436

Total assets 85,642 397,002 726,989 - 1,209,633


Others 166,856 111,835 (19,468) - 259,223Total liabilities 363,286 529,248 185,146 - 1,077,680




Profit before income tax from reportable

segments

Profit after income tax from

reportable segments






123


- --





124


45.2 By geographical segment

Group

31 December 2015Nigeria Others Total

Derived from external customers 160,949 2,929 163,878

Derived from other segments - - -

Total revenue 160,949 2,929 163,878

Interest expense (76,851) (142) (76,993)

Fee and commission expense (1,796) (5) (1,801)

Net operating income 82,302 2,782 85,084

Expense:Employee benefit and compensation cost (37,922) (307) (38,229)

Administration and general expenses (40,046) (828) (40,874)

(33,817) (864) (34,681)

Depreciation and amortisation (8,788) (158) (8,946)

Total cost (120,573) (2,157) (122,730)

The Group’s business is organized along two main geographical areas:

i. Nigeria

ii. Others

Transactions between the business segments are on normal commercial terms and conditions.

Funds are ordinarily allocated between segments, resulting in funding cost transfers disclosed in operating income.

Interest charged for these funds is based on the Group’s cost of capital. There are no other material items of income orexpense between the business segments.

Internal charges and transfer pricing adjustments have been reflected in the performance of each segment. Revenue

sharing agreements are used to allocate external customer revenues to a segment on a reasonable basis. Revenues are

allocated to geographical areas by destination according to the location of the customer.



assets

(Loss)/Profit before income tax from reportable segments (38,271) 625 (37,646)

Income tax expense (3,039) (41) (3,080)

Profit after income tax from reportable segments (41,310) 584 (40,726)




AssetsLoans and advances to customers 701,747 3,149 704,896Others 480,727 13,774 494,501Total assets 1,182,474 16,923 1,199,397

LiabilitiesDeposits from customers 746,030 7,115 753,145

Others 336,772 5,297 342,069Total liabilities 1,082,802 12,412 1,095,214

The amounts reported are based on the financial information that is used to produce the Group's financial statements.

The required information on split of non-current assets by geography is not available and the cost to develop it would

be excessive.



125

46 Related parties

(a) Related party transactions

(b) Subsidiaries

(c) Transactions with key management personnel

46.1 Key management compensation


2015 2014 2015 2014

Short-term employee benefits 739 645 711 444Post-employment benefits:

Gratuity benefits paid - 331 - 331Pension contributions 8 6 8 6

747 982 719 781

The group is controlled by Skye Bank Plc (incorporated in Nigeria) who is also the ultimate parent.

Parties are considered to be related if one party has the ability to control the other party or to exercise influence

over the other party in making financial and operational decisions, or one other party controls both. The definition

includes subsidiaries, associates, joint ventures and the Group's pension schemes, as well as key management

personnel.

Transactions between Skye Bank Plc and its subsidiaries also meet the definition of related party transactions.

Where these are eliminated on consolidation, they are not disclosed in the consolidated financial statements but

are disclosed in the books of the Bank. Interest in subsidiaries are set out in note 31b.

The group's key management personnel, and persons connected with them, are also considered to be related

parties. The denition of key management includes the close members of family of key personnel and any entityover which they exercise control. The key management personnel have been identified as executive and non-

executive directors of the Group as well as their close family members. Close members of family are those familymembers who may be expected to influence, or be influenced by that individual in their dealings with Skye Bank

Plc and its subsidiaries.

The compensation paid to key management is shown below:

Balances and transactions between the bank and its subsidiaries, which are related parties of the bank, have been

eliminated on consolidation and are not disclosed in this note. Details of transactions between the group and other

related parties are disclosed below.

Group Bank





126


46.2 Companies'/directors' related deposit liabilities

Directors (and close

family members)

Balance, beginning of year 2,521

Net movement during the year 1,591

Balance, end of year 4,112

46.3 Subsidiaries deposit account balances

Name of company 31 December 31 December

2015 2014

Skye Bank Sierra Leone - 29,666

Skye Bank Guinea 2 -

Skye Bank Gambia - -

Mainstreet Bank Estate Company Ltd 30 -

Mainstreet Insurance Brokers Company Ltd 723 -

Mainstreet International Finance - -

Mainstreet Microfinance Bank Ltd 281 -

Mainstreet BDC Ltd 710 -

Mainstreet Securities Ltd 731 -

Mainstreet Capital Markets Ltd 1,505 -

Mainstreet Registrar Ltd 2,696 -

Mainstreet Trustees and Asset Management

Company Ltd

4,117 -

10,795 29,666

See note 27 and 39 for intercompany payable and receivable.

Interest rates charged on balances outstanding are at rates that would be charged in the normal course of business.

There are no special considerations for the related party deposits. Deposits from related parties are taken at arms length.





127


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idM

echanic

sLim

ited

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and

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icilia

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kLim

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ule

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gage

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ution

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ed

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the

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pany's

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gage

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gage

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ited

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432

Legal

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gage

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MD

evelo

pm

ent

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ent

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Tunde

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raft

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-Legal

mort

gage

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eServ

ices

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Dr.

Tunde

Ayeni

Overd

raft

3-

Legal

mort

gage

and

debentu

re

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anta

Nig

eria

Lim

ited

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Ibiy

eEkong

Advance

and

Term

loan

150

170

Cash/l

egalm

ort

gage

DV

Media

Nig

eria

Lim

ited

Mrs

Ibiy

eEkong

Advance

&Lease

and

Term

Loan

51

58

Lie

non

deposits

The

Gro

up

gra

nte

dvarious

cre

dit

facilitie

sto

com

panie

sw

hose

directo

rsare

als

odirecto

rsofSkye

Bank

Plc

.at

rate

sand

term

scom

para

ble

tooth

er

facilitie

sin

the

Gro

up's

port

folio.

An

aggre

gate

ofN

50

bn

(2014:

N52

bn)

was

outs

tandin

gon

these

facilitie

sat

the

end

ofth

eperiod.

This

dis

clo

sure

isin

com

pliance

with

the

requirem

ents

ofth

eBankin

g

and

Oth

er

Fin

ancia

lIn

stitu

tions

Act

(BO

FIA

)and

IAS

24.

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table

belo

wpro

vid

es

furt

her

deta

ils:

(All

am

ounts

inm

illions

ofN

aira

unle

ss

oth

erw

ise

sta

ted)

CO

NS

OL

IDA

TE

DA

ND

SE

PA

RA

TE

FIN

AN

CIA

LS

TA

TE

ME

NT

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ry

ea

re

nd

ed

31

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ce

mb

er

20

15


128

NO

TE

S T

O T

HE

FIN

AN

CIA

L S

TA

TE

ME

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pan

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ivid

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tion

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ipTyp

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ber

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ber

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rity

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d

secu

rity

sta

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teM

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iye

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raft

and

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Legal

mort

gage

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enty

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oTen

Nig

eria

Lim

ited

Mrs

Ibiy

eEkong

Term

Loan

-5

Lie

non

fixed

deposit

Fin

icky

World

Lim

ited

Mrs

Onasanya

(Ex-D

irecto

r)Term

Loan

and

Overd

raft

17

42

Debentu

re

Onas

Farm

Lim

ited

Mrs

Onasanya

(Ex-D

irecto

r)Term

Loan

26

36

Legalm

ort

gage

and

debentu

re

DLK

and

Sons

Ente

rprises

Tim

oth

yO

gunta

yo

Term

Loan

47

-Legalm

ort

gage

Sw

anlu

xN

igeria

Lim

ited

Mr

Alu

ko

Moses

Ola

kunle

Term

Loan

and

Overd

raft

182

301

Legalm

ort

gage

Sw

anlu

xN

igeria

Lim

ited

Mr

Alu

ko

Moses

Ola

kunle

Advance

54

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ort

gage

Tabik

Glo

balServ

ices

Lim

ited

Tim

oth

yO

gunta

yo

Term

Loan

10

20

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ort

gage

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dIn

dustr

ies

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ited

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ay

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jaTerm

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st

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t

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eria

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ited

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ay

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LegalM

ort

gage

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rFarm

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ited

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ay

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LegalM

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miu

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ods

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ay

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LegalM

ort

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re

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llio

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igeria

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ay

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ort

gage

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x-D

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r)Term

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LegalM

ort

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Mrs

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Mrs

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19

31

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icili

atio

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ds

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otu

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30

35

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icili

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fun

ds

Mr

Tim

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gunta

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Mr

Tim

oth

yO

gunta

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Term

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47

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icili

atio

nof

fun

ds

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Am

aka

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ughalu

Mrs

Am

aka

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ughalu

Term

Loan

23

31

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icili

atio

nof

fun

ds

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bola

Izu

Mrs

Abim

bola

Izu

Term

Loan

72

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om

icili

atio

nof

fun

ds

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ieId

ow

uM

rsM

ark

ieId

ow

uTerm

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om

icili

atio

nof

fun

ds

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Sanni

Mr

Bayo

Sanni

Term

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83

-D

om

icili

atio

nof

fun

ds

Tra

veltro

nN

igeria

Lim

ited

Mr.

Kehin

de

Duro

sin

mi-

Ett

iTerm

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9-

LegalM

ort

gage

TSI

Pro

pert

yand

Investm

ent

Com

pany

Ltd

Brig.

Gen

Anth

ony

Ukpo

(Rtd

)O

verd

raft

73

-LegalM

ort

gage

51

,17

25

2,0

35

All

risk

assets

are

perf

orm

ing

as

at

the

end

ofth

ere

port

ing

periods

pre

sente

d.

(All

am

ounts

inm

illions

ofN

aira

unle

ss

oth

erw

ise

sta

ted)

CO

NS

OL

IDA

TE

DA

ND

SE

PA

RA

TE

FIN

AN

CIA

LS

TA

TE

ME

NT

S

Fo

ry

ea

re

nd

ed

31

De

ce

mb

er

20

15


129

NO

TE

S T

O T

HE

FIN

AN

CIA

L S

TA

TE

ME

NT

S

46.4 Risk assets outstanding

Directors' off balance-sheet engagement

Name of

company/Individual

Relationship Type 31

December

2015

31

December 2014

Pasture Travel & Tours Mr. Dotun Adeniyi Bank Guarantee 50 50

Newcross Petroleum Limited Dr. Jason Fadeyi Performance Bond - 712

Traveltron Nigeria Limited Mr. Kehinde Durosinmi-Etti Bank Guarantee 4 3

Stallion Nigeria Limited Vinay Tuteja Customs Bond 670 200

Stallion Nigeria Limited Vinay Tuteja LC Establishment 16,653 11,741

NATCOM Development &

Investment Limited

Dr. Tunde Ayeni Bank Guarantee 1,892 -

NATCOM Development &

Investment Limited

Dr. Tunde Ayeni LC Establishment 3,821 -

Olutoyl Estate Devt Limited Dr. Tunde Ayeni Bank Guarantee 3,375 -

PPP Fluid Mechanics Limited Dr. Tunde Ayeni Customs Bond 980 233

Metropolitan Construction

Company Limited

Alh. Musiliu Smith Bid Bond 58 -

Metropolitan Construction

Company Limited

Alh. Musiliu Smith APG Issuance 1,100 -

28,603 12,939

47 Contingent liabilities and commitments

47.1 Legal proceedings

47.2 Capital commitments

47.3

The Group in the ordinary course of business is presently involved in 750 (2014: 420) litigation suits.

There were contingent liabilities in respect of claims and litigations against the group as at 31 December 2015 amounting

to N119 billion (2014: N77 billion). These claims arose in the normal course of business and are being contested by the

bank. The directors having sought the advice of professional legal counsel and are of the opinion that no significant

liability will crystallize from these cases. A provision of N3.4 bn has been made for the year ended 31 December 2015.

In the normal course of business, the Group is party to nancial instruments with off-balance sheet risk - Bankers’ acceptances,performance bonds and indemnities. The instruments are used to meet the credit and other financial requirements of

customers.

The Directors are of the opinion that none of the aforementioned cases is likely to have a material adverse effect on thebank and are not aware of any other pending or threatened claims and litigations.

At the balance sheet date, the group had no (2014: N2.9 billion) capital commitments in respect of authorized and

contracted capital projects for information technology equipment and software.

Off-balance sheet engagements





130


47 Contingent liabilities and commitments continued

Nature of instruments


2015 2014 2015 2014

Performance bonds and guarantees 75,339 64,983 75,280 61,664

Letters of credit 31,352 17,691 31,352 15,608

106,691 82,674 106,632 77,272

48 Statement of prudential adjustment

Reference Specific Collective/

General

Total

a. Loans and advances

Provision per CBN Guidelines 32,841 13,102 45,943

Impairment allowance per IAS 39 22.1 25,678 11,575 37,253

Amount required in regulatory risk reserve 7,163 1,527 8,690

49 Events after the reporting period

50 Dividends

Guarantees and letters of credit are given as security to support the performance of a customer to third parties. As

the Group will only be required to meet these obligations in the event of the customer’s default, the cash

requirements of these instruments are expected to be considerably below their nominal amounts.

The dividends paid in 2015 and 2014 were Nil and N3,966Million (30k per share) respectively.

In the current reporting period, the Bank did an assessment of the balance in its regulatory risk reserve and an

additional charge of N8.7 Billion was passed to regulatory risk reserve from retained earnings.

The reconciliation between the December 2015 CBN recommended provisions and that under IFRS as at December

2015 is as shown in the table below:

There were no events after the reporting period which require adjustment to, disclosure in, these financial statements.

The gratuity scheme was discontinued in 2016, after the reporting date.

Other contingent liabilities include transaction related customs and performances bond and are, generally,

commitments to third parties which are not directly dependent on the customer’s creditworthiness. Documentary

credits commit the Group to make payments to third parties, on production of documents, which are usually

reimbursed immediately by customers. The following tables summarises the nominal principal amount of contingent

liabilities and commitments.

Group Bank





131


51 Acquisition of Mainstreet Bank Group

Differences in accounting policies were deemed immaterial to the Skye Bank Group. The identiable assets and liabilitiesarising from the acquisition as at the reporting dates are as follows:

In December 2014, Skye Bank Plc. acquired a 100% equity interest in Mainstreet Bank Group, a commercial bank

incorporated in Nigeria which has subsidiaries all over Nigeria and outside Nigeria.

As at December 2014, the initial acquisition accounting for the business combination was yet to be finalised, hence the

amounts disclosed were provisional. This was as a result of an exercise to assess the fair value of assets and liabilities, and

thus, properly allocate the purchase price. The measurement period came to an end in December 2015.

The preliminary allocation of the consideration to the carrying value of net assets resulted in an initial positive goodwill of

N30.7bn. This goodwill is not deductible for tax purposes. The main reasons for the recognition of this goodwill are the

expected synergies through combining a highly skilled workforce, anticipated additional income, increased shareholder value

through higher returns on equity as well as increased market presence in Nigeria.

The profit made by the acquiree during the year was not consolidated as the acquisition date is the same as the reporting

date, that is 31 December 2014. If acquisition had been as of the beginning of the annual reporting period, the acquiree

would have contributed interest income of N31.8bn and profit after tax of N6.4bn in the Group's income statement for the

year.

The fair value exercise was completed in November 2015. As a consequence of this, the comparative information for 2014

has been adjusted retrospectively to decrease the fair value of the other liabilities at the acquisition date by N41 billion,

offset by a decrease to goodwill of N39 billion, giving rise to a bargain purchase of N8.98 billion.

Assets acquired


2015 2014

Final Provisional

Fair value Fair value

Cash and short term funds 46,071 46,071

Due from banks and other financial institutions 15,926 15,926

Financial assets held for trading 7,547 7,547

Assets under repurchase agreements 9,352 9,352

Pledged assets 56,104 56,104

Loans and advances 46,476 51,963


- Available for sale investments 5,697 2,639

- Held to maturity investments 66,620 66,620

Prepayment and other assets 50,231 50,231

Intangible assets - software 1,886 1,886

Property, plant and equipment 34,932 34,932

Trading properties 3,866 3,595

Investment properties 1,995 1,971

Deferred tax assets 264 264

Assets 346,967 349,101





132


b Integration of Mainstreet Bank Ltd

The acquired business, Mainstreet Bank Group, has subsidiaries whose financial information have been consolidated in

arriving at the fair values of acquired assets and liabilities. The non controlling interest of N138Million represents share of

net assets acquired attributable to non-wholly owned subsidiaries. These are listed in note 30b.

The cash and balances with central bank did not include any mandatory or restricted balances

Costs directly attributable to the acquisition have been expensed within operating expenses.

In May 2015, a restructuring of the Skye Group structure was carried out. The effect of this was that the operations ofMainstreet Bank Ltd was integrated into the operations of Skye Bank Plc. Mainstreet Bank Ltd thus ceased to exist from the

date of the integration.

This transaction was deemed to be a reorganisation of an existing Group and thus, the net assets of the Mainstreet Bank Ltd

was combined with Skye Bank Plc's using the book values as at that date. This business combination has been accounted for

as a common control transaction where Skye Bank (the acquirer) has applied predecessor accounting as the basis in

recognising the assets acquired and the liabilities assumed of Mainstreet Bank Limited in the financial statements. Any

difference between the purchase consideration and the net assets acquired has been accounted for in retained earnings.

Liabilities assumed


2015 2014

Final Provisional

Fair value Fair value

Deposits and other accounts 128,576 128,576

Due to other financial institutions 39,318 39,318

Borrowings from local and foreign banks/Institutions 6,312 6,312

Accruals and other liabilities 33,016 74,836

Taxation payable 3,891 3,891

Liabilities on investment contracts 26 26

Deferred tax liability 139 139

Liabilities 211,278 253,098

Non controlling interest (note 51a) 138 138

Net assets acquired 135,551 95,865

Purchase consideration 126,575 126,575

(Bargain Purchase)/Goodwill (8,976) 30,710

Cash and cash equivalents acquired from the subsidiary is made up of the following:

Unrestricted balances with central banks 407 407

Cash on hand and balances with banks 14,627 14,627

Money market placements and other cash equivalents 8,394 8,394

23,428 23,428

Purchase consideration (126,575) (126,575)

Net cash effect from acquisition (103,147) (103,147)





133


Assets acquired

Recognised

book values

Cash and cash equivalents 66,114

Non pledged trading assets 5,319

Assets held under repurchase agreements 9,352

Pledged assets 55,993

Loans and advances 45,628


- Available for sale investments 4,332

- Held to maturity assets 47,614

Prepayment and other assets 50,213

Investment in subsidiaries 9,674

Intangible assets - software 1,885

Property, plant and equipment 34,497

Assets 330,621

Liabilities assumed

Deposits and other accounts 134,059

Due to other financial institutions 39,318

Borrowings from local and foreign banks/institutions 5,771

Accruals and other liabilities 20,824

Current tax liabilities 2,456

Liabilities 202,428

Non controlling interest (note 51a)

Net assets acquired 128,192

Purchase consideration 126,575

Capital reserve (1,617)

52 Non-audit services

Service Contractual sum Amount Paid

i) Skye Bank loan certification for European International Bank 1 1

ii) Skye Bank recovery plan 34 20

iii) IFRS 9 training and impact assessment 27 -62 21

In line with predecessor accounting requirements, Skye Bank has chosen to incorporate Mainstreet Bank's result as if both

(Skye Bank and Mainstreet Bank) had always been combined. Therefore, as of the beginnining of the year, the net assets of

Mainstreet Bank Ltd was as follows:

During the year, the bank's auditor, PricewaterHouseCoopers, rendered non-audit services to the bank. Below are the

details of the services

In the bank's opinion, the provision of these services to the bank did not impair the independence and objectivity of the

external auditor.





134


53

(a)

(i)

The

condensed

financia

ldata

ofth

econsolidate

dentities

as

at

31

Decem

ber

2015,are

as

follow

s:

Condensed

sta

tem

ent

ofpro

fit

or

loss

and

oth

er

com

pre

hensiv

ein

com

e

Skye

Ban

k

Sie

rra

Leo

ne

Skye

Ban

k

Gu

inea

Skye

Ban

k

Gam

bia

Skye

Ban

k

Sta

ffS

hare

Sch

em

e

Main

str

eet

Ban

kEsta

te

Co

mp

an

y

Ltd

*

Main

str

eet

In

su

ran

ce

Bro

kers

Co

mp

an

yLtd

Main

str

eet

In

tern

ati

on

al

Fin

an

ce

Main

str

eet

Mic

rofi

nan

ce

Ban

kLtd

Main

str

eet

BD

CLtd

Main

str

eet

Secu

riti

es

Ltd

Main

str

eet

Cap

ital

Mark

ets

Ltd

Main

str

eet

Reg

istr

ar

Ltd

Main

str

eet

Tru

ste

es

an

d

Asset

Man

ag

em

en

t

Co

mp

an

yLtd

Opera

ting

incom

e580

831

299

-124

187

373

495

46

-447

311

1,0

13

Opera

ting

expenses

(417)

(522)

(299)

-(1

21)

(97)

(147)

(336)

(6)

(154)

(77)

(68)

(218)

Net

impairm

ent

on

financia

lassets

(12)

(50)

2-

(5)

--

(7)

--

--

(19)

Pro

fit

befo

reta

x151

259

2-

(2)

90

226

152

40

(154)

370

243

776

Taxation

(61)

-(1

3)

-(1

0)

(28)

(45)

-(1

9)

(26)

(87)

(235)

Pro

fit

for

the

year

90

259

(11)

-(2

)80

198

107

40

(173)

344

156

541

Assets

Cash

and

short

term

funds

565

1,4

17

438

--

--

2-

--

--

Derivative

financia

lassets

--

--

--

178

--

--

--

Due

from

banks

and

oth

er

financia

l

institu

tions

523

351

526

-30

490

314

710

731

1,5

05

2,6

96

4,1

68

Fin

ancia

lassets

held

for

tradin

g-

--

--

--

--

-213

--

Loans

and

advances

tocusto

mers

1,1

59

1,6

14

375

--

--

1,6

06

--

--

-

Investm

ent

securities

2,1

70

2,0

33

1,0

41

1,3

42

-742

2,7

06

29

-1,3

29

2,4

72

-1,7

31

Assets

ple

dged

as

collate

ral

--

--

--

--

--

--

1

Pre

paym

ent

and

oth

er

assets

141

52

430

-31

37

83

28

38

612

55

74

Tra

din

gpro

pert

ies

--

--

2,7

05

--

--

--

--

Investm

ent

pro

pert

ies

--

--

2,0

08

--

--

--

--

Investm

ent

insubsid

iaries

--

--

5-

--

--

--

-

Pro

pert

y,

pla

nt

and

equip

ment

172

120

460

-30

22

814

44

167

130

29

Inta

ngib

leassets

-4

7-

--

--

--

--

-

Defe

rred

tax

assets

212

--

--

-47

27

-52

--

169

4,9

42

5,5

91

3,2

77

1,3

42

4,8

09

80

53

,11

22

,02

07

52

2,1

22

4,3

69

2,8

81

6,1

72

Fin

an

ced

by:

Due

tooth

er

financia

lin

stitu

tions

-906

--

--

-438

--

--

-

Deposits

from

custo

mers

2,8

00

2,0

34

1,8

83

-19

--

397

--

8-

1,8

15

Derivative

financia

lliabilitie

s-

--

--

--

--

--

--

Borr

ow

ings

from

localand

fore

ign

institu

tions

--

-1,4

91

752

--

--

--

--

Taxation

payable

16

-1

-160

35

19

23

37

160

355

187

154

Accru

als

and

oth

er

liabilitie

s521

499

229

-999

222

69

98

453

1,2

24

2,8

54

2,1

87

1,9

20

Defe

rred

tax

liability

--

6-

164

311

-2

--

3-

Retire

ment

benefit

obligation

9-

--

--

--

--

--

4

Equity

1,5

96

2,1

52

1,1

58

(149)

2,7

15

544

3,0

13

1,0

63

260

738

1,1

52

504

2,2

79

4,9

42

5,5

91

3,2

77

1,3

42

4,8

09

80

43

,11

22

,01

97

52

2,1

22

4,3

69

2,8

81

6,1

72

Net

cashflow

from

opera

ting

activitie

s825

2,0

43

42

-(8

3)

(13)

140

(250)

2567

(177)

11,0

13

Net

cashflow

from

investing

activitie

s(7

67)

204

31

-(3

)83

(137)

534

-98

5-

2,6

60

Net

cashflow

from

financin

gactivitie

s-

--

(30)

--

(177)

--

(0)

-(2

70)

Incre

ase/(

Decre

ase)

incash

and

cash

equiv

ale

nts

59

2,2

47

73

-(1

16)

70

3107

2665

(173)

13,4

04

Cash

and

cash

equiv

ale

nt,

begin

nin

g1,0

28

584

-146

678

86

79

701

66

1,6

78

2,6

95

764

Cash

and

cash

equiv

ale

nt,

end

ofyear

1,0

87

2,2

47

657

-30

748

89

186

703

731

1,5

05

2,6

96

4,1

68

Co

nd

en

sed

resu

lts

of

co

nso

lid

ate

den

titi

es

Co

nd

en

sed

sta

tem

en

to

fn

an

cia

lp

ositi

on

(All

am

ounts

inm

illions

ofN

aira

unle

ss

oth

erw

ise

sta

ted)

CO

NS

OL

IDA

TE

DA

ND

SE

PA

RA

TE

FIN

AN

CIA

LS

TA

TE

ME

NT

S

Fo

ry

ea

re

nd

ed

31

De

ce

mb

er

20

15


135

Co

nd

en

se

dre

su

lts

of

the

co

nso

lid

ate

de

nti

tie

sas

at

3 1

De

ce

mb

er

20

14

,are

as

foll

ow

s:

31

Dec

em

be

r2

01

4

Opera

ting

incom

e

Opera

ting

expenses

Impair

ment

Pro

fit

befo

reta

x

Taxation

Pro

fit

aft

er

tax

*M

ain

str

eet

bank

was

acquir

ed

inD

ecem

ber

2014

and

did

not

contr

ibute

toth

eG

roup's

pro

fit

for

the

year.

See

note

51

Ass

ets

Cash

and

short

term

funds

Due

from

banks

and

oth

er

financia

lin

stitu

tions

Fin

ancia

lassets

held

for

tradin

g

Assets

under

repurc

hase

agre

em

ent

Loans

and

advances

tocusto

mers

Investm

ent

securi

ties:

-Available

for

sale

investm

ents

-H

eld

tom

atu

rity

assets

-Loans

and

receiv

able

s

Assets

ple

dged

as

collate

ral

Pre

paym

ent

and

oth

er

assets

Investm

ent

insubsid

iari

es

Inta

ngib

leassets

Pro

pert

y,

pla

nt

and

equip

ment

Defe

rred

tax

assets

Tra

din

gpro

pert

ies

Investm

ent

pro

pert

ies

Assets

cla

ssifi

ed

as

held

for

sale

Tota

lassets

Lia

bil

itie

s

Deposits

and

oth

er

accounts

Due

tooth

er

financia

lin

stitu

tions

Deri

vative

financia

lliabilitie

s

Borr

ow

ings

from

localand

fore

ign

banks/i

nstitu

tions

Accru

als

and

oth

er

liabilitie

s

Taxation

payable

Lia

bilitie

son

investm

ent

contr

acts

Defe

rred

tax

liability

Retire

ment

benefit

obligation

Equity

and

reserv

e

Net

cash

(used

in)/

genera

ted

from

opera

ting

activitie

s

Net

cash

genera

ted

from

/(used

in)

investing

activitie

s

Net

cash

(used

in)/

pro

vid

ed

by

financin

gactivitie

s

Incre

ase/(

Decre

ase)

incash

and

cash

equiv

ale

nts

Effe

ctof

exchange

rate

fluctu

ations

on

cash

held

Cash

and

cash

equiv

ale

nt,

begin

nin

gof

year

Cash

and

cash

equiv

ale

nt,

end

of

year

Skye

Ban

kS

taff

tru

st

sch

em

e

Skye

Ban

k

Gam

bia

Skye

Ban

kS

ierr

a

Leon

e

Skye

Ban

kG

uin

ea

Main

str

eet

Ban

k*

135,4

46

-318

338

640

-

(106,4

75)

-(2

06)

(225)

(370)

-

(19,7

06)

-(5

)(2

7)

(99)

-

9,2

65

-107

86

171

-

(636)

(3)

(28)

(66)

-

8,6

29

-104

58

105

-

251,8

05

-473

494

1,8

01

46,0

71

56,1

14

-271

363

334

15,9

26

1,3

84

--

--

7,5

47

--

--

-9,3

52

598,1

97

-271

812

664

46,4

76

-

2,7

18

1,3

42

--

-2,6

39

72,6

87

-814

1,1

81

1,4

70

68,3

13

18,3

87

--

--

-

34,0

66

--

--

61,9

80

12,6

19

-321

56

59

50,2

31

129,6

07

--

--

-

1,9

62

-11

-12

1,8

86

29,9

37

-246

170

146

15,7

95

--

-199

-264

--

--

-2,7

27

--

--

-1,4

28

150

--

--

-

1,2

09

,63

31

,34

22

,40

73

,27

54

,48

63

30

,63

5

124,9

67

1,4

91

--

-6,3

12

818,4

57

-1,3

14

1,6

82

2,3

04

128,5

76

12,4

98

--

--

39,3

18

288

-

112,2

09

-14

376

422

74,8

36

1,2

78

-1

356

3,8

92

--

--

-26

1,0

84

-2

--

139

6,8

99

--

4-

-

131,9

53

(149)

1,0

76

1,2

10

1,7

04

77,5

37

1,2

09

,63

31

,34

22

,40

73

,27

54

,48

63

30

,63

6

(68,0

14)

-162

(33)

1,5

32

(10,6

70)

(4,9

28)

-(1

99)

(310)

452

9,2

68

(22,9

87)

--

--

(95,9

29)

-(3

7)

(343)

1,9

84

(1,4

02)

2,5

16

--

--

-

202,1

87

-510

1,2

00

721

29,9

11

108,7

74

-473

857

2,7

05

28,5

09

CO

NS

OL

IDA

TE

DA

ND

SE

PA

RA

TE

FIN

AN

CIA

LS

TA

TE

ME

NT

S

Fo

ry

ea

re

nd

ed

31

De

ce

mb

er

20

15


136

Value Added Statement


Group 2015 % 2014 % 2015 % 2014 %

Gross income 163,878 145,718 159,511 135,446

Interest expense (76,993) (44,572) (78,085) (44,495)

86,885 101,146 81,426 90,951

Administrative overheads:

- Local (47,943) (36,518) (45,758) (36,260)

- Foreign (347) (161) (326) (156)

Value added 38,595 100 64,467 100 35,342 100 54,535 100

Distribution

Employees

- Wages & salaries and

other staff cost38,229 99% 19,676 31% 37,122 105% 19,481 36%

Government

- Taxation 1,120 3% 1,377 2% 663 2% 1,278 2%

The future

- Asset replacement (depreciation)

- Local 7,101 18% 3,847 6% 6,930 20% 3,718 7%

- Asset replacement (amortisation)

- Local 1,845 5% 543 1% 1,815 5% 406 1%

- Impairment loss 34,681 90% 20,951 32% 34,957 99% 21,665 40%

- Expansion (transfers to

reserves)

(46,341) -120% 18,717 29% (48,038) -136% 8,629 15%

- Deferred taxation 1,960 5% (644) -1% 1,893 5% (642) -1%

38,595 100% 64,467 100% 35,342 100% 54,535 100%

Group Bank





137

Fiv

eY

ea

rF

inancia

lS

um

mary

31

Dec.

31

Dec.

31

Dec.

31

Dec.

31

Dec.

31

Dec.

31

Dec.

31

Dec.

31

Dec.

31

Dec.

Assets

:2

01

52

01

42

01

32

01

22

01

12

01

52

01

42

01

32

01

22

01

1

Cash

and

bala

nces

with

centr

albanks

205,1

47

300,6

44

145,0

56

111,6

66

80,6

15

202,7

25

251,8

05

142,6

98

109,9

87

80,3

21

Due

from

banks

and

oth

er

financia

lin

stitu

tions

37,0

31

72,9

78

149,3

24

96,6

71

90,1

83

35,6

17

56,1

14

148,2

68

95,8

74

87,1

85

Fin

ancia

lassets

held

for

tradin

g344

18,2

83

617

2,2

64

64

131

1,3

84

617

2,2

64

64

Derivative

financia

lassets

178

--

16,2

75

--

--

16,2

75

-

Loans

and

advances

tocusto

mers

704,8

96

645,7

74

549,8

58

540,3

80

486,9

05

700,4

03

598,1

97

551,3

28

540,0

36

489,2

51

-Available

for

sale

investm

ents

14,8

75

8,4

14

3,7

09

6,4

34

8,7

53

9,8

12

2,7

18

3,7

09

6,4

34

8,0

45

-H

eld

tom

atu

rity

investm

ents

50,7

56

125,1

01

154,7

49

180,8

04

148,5

56

43,0

31

72,6

87

151,6

26

178,1

91

147,2

26

-Loans

and

receiv

able

sin

vestm

ents

34,9

49

36,0

58

34,7

34

25,5

35

14,8

66

33,9

19

18,3

87

34,7

34

25,5

35

15,1

53

Assets

ple

dged

as

collate

ral

68,7

01

90,1

70

30,6

35

36,8

88

68,7

01

34,0

66

30,6

35

36,8

88

Pre

paym

ent

and

oth

er

assets

9,9

73

15,0

69

15,1

32

24,1

53

8,6

32

15,4

43

12,6

19

15,1

50

25,1

59

9,1

41

Tra

din

gpro

pert

ies

3,8

59

3,8

66

--

--

Investm

ent

pro

pert

ies

2,0

08

1,9

95

--

1,8

42

--

--

-

Investm

ent

insubsid

iaries

--

--

-6,6

93

129,6

07

2,9

80

2,9

80

7,2

74

Investm

ent

inassocia

tes

--

-30

2,1

33

--

-30

1,7

90

Pro

pert

y,

pla

nt

and

equip

ment

62,9

73

65,4

31

29,5

23

29,7

33

31,1

07

61,8

13

29,9

37

29,1

06

28,7

93

29,9

48

Inta

ngib

leassets

3,0

76

3,8

71

3,0

83

1,3

68

806

3,0

66

1,9

62

2,9

42

1,2

38

1,1

29

Defe

rred

tax

assets

481

463

--

81

--

--

-

Assets

cla

ssifi

ed

as

held

for

sale

150

150

217

1,6

27

39,7

22

150

150

217

1,6

27

-

TO

TA

LA

SS

ETS

1,1

99

,39

71

,38

8,2

67

1,1

16

,63

71

,07

3,8

28

91

4,2

65

1,1

81

,50

41

,20

9,6

33

1,1

14

,01

01

,07

1,3

11

87

6,5

27

Lia

bil

itie

s

Due

tooth

er

financia

lin

stitu

tions

33,1

10

51,8

16

143

2,5

06

15,6

50

31,7

66

12,4

98

143

2,6

29

15,6

50

Deposits

from

custo

mers

753,1

45

952,3

02

823,3

25

790,0

92

645,4

49

754,8

82

818,4

57

819,7

36

786,9

60

645,7

46

Derivative

financia

lliabilitie

s335

288

249

16,5

88

-335

288

249

16,5

88

-

Borr

ow

ings

from

localand

fore

ign

institu

tions

216,4

48

131,2

79

136,6

85

114,2

08

85,2

48

216,4

48

124,9

67

136,6

85

114,2

08

85,2

48

Curr

ent

tax

liability

2,7

16

5,2

30

1,0

58

1,1

67

984

1,5

15

1,2

78

1,0

41

1,0

03

818

Accru

als

and

oth

er

liabilitie

s78,5

88

97,9

66

24,6

63

36,3

69

29,3

68

74,1

41

112,2

09

24,4

15

35,7

38

28,8

25

Defe

rred

tax

liability

3,3

67

1,2

25

1,5

35

1,4

01

-3,1

77

1,0

84

1,7

26

1,4

95

38

Lia

bilitie

son

investm

ent

contr

acts

-26

--

--

--

--

Retire

ment

benefit

obligation

7,5

05

6,9

03

7,5

78

7,2

17

971

7,4

91

6,8

99

7,5

78

7,2

16

920

--

--

36,4

89

--

--

-

TO

TA

LLIA

BILITIES

1,0

95

,21

41

,24

7,0

35

99

5,2

36

96

9,5

48

81

4,1

59

1,0

89

,75

51

,07

7,6

80

99

1,5

73

96

5,8

37

77

7,2

45

Eq

uit

y

Share

capital

6,9

40

6,6

09

6,6

09

6,6

09

6,6

09

6,9

40

6,6

09

6,6

09

6,6

09

6,6

09

Share

pre

miu

m65,5

48

65,5

48

65,5

48

65,5

48

65,5

48

65,5

48

65,5

48

65,5

48

65,5

48

65,5

48

Reta

ined

earn

ings

and

oth

er

reserv

es

30,7

68

68,3

11

48,3

96

31,2

85

25,1

45

19,2

61

59,7

96

50,2

80

33,3

17

27,1

25

10

3,2

56

14

0,4

68

12

0,5

53

10

3,4

42

97

,30

29

1,7

49

13

1,9

53

12

2,4

37

10

5,4

74

99

,28

2

Non-c

ontr

ollin

gin

tere

st

927

764

848

838

2,8

04

--

--

-

TO

TA

LEQ

UITY

10

4,1

83

14

1,2

32

12

1,4

01

10

4,2

80

10

0,1

06

91

,74

91

31

,95

31

22

,43

71

05

,47

49

9,2

82

TO

TA

LLIA

BILITIES

AN

DEQ

UITY

1,1

99

,39

71

,38

8,2

67

1,1

16

,63

71

,07

3,8

28

91

4,2

65

1,1

81

,50

41

,20

9,6

33

1,1

14

,01

01

,07

1,3

11

87

6,5

27

Co

nti

ng

en

tliab

ilit

ies

10

6,6

91

82

,67

41

23

,28

21

56

,93

01

41

,99

01

06

,63

27

7,2

72

12

3,2

82

15

6,9

30

14

1,9

90

Gro

up

Ban

k

Lia

bilitie

sheld

for

sale

CO

NS

OL

IDA

TE

DA

ND

SE

PA

RA

TE

FIN

AN

CIA

LS

TA

TE

ME

NT

S

Fo

ry

ea

re

nd

ed

31

De

ce

mb

er

20

15

(All

am

ounts

inm

illions

ofN

aira

unle

ss

oth

erw

ise

sta

ted)


138

17 financial statement - nigerian stock exchange · the companies and allied matters act and the...

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