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    2017 ANNUAL REPORT Citibank Nigeria Limited


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    Citi’s Value Proposition: A Mission of Enabling Growth and Progress What You Can Expect from Us and What We Expect from Ourselves Citi’s mission is to serve as a trusted partner to its clients by responsibly providing financial services that enable growth and economic progress. Our core activities are safeguarding assets, lending money, making payments and accessing the capital markets on behalf of our clients. We have 200 years of experience in helping our clients meet the world’s toughest challenges and embrace its greatest opportunities. We are Citi, the global bank — an institution connecting millions of people across hundreds of countries and cities. We protect people’s savings and help them make the purchases — from everyday transactions to buying a home — that improve the quality of their lives. We advise people on how to invest for future needs, such as their children’s education and their own retirement, and help them buy securities, such as stocks and bonds. We work with companies to optimise their daily operations, whether they need working capital to make payroll or export their goods overseas. By lending to companies large and small, we help them grow, creating jobs and real economic value at home and in communities around the world. We provide financing and support to governments at all levels so they can build sustainable infrastructure, such as housing, transportation, schools and other vital public works. These capabilities create an obligation to act responsibly, do everything possible to create the best outcomes and prudently manage risk. If we fall short, we will take decisive action and learn from our experience. We strive to earn and maintain the public’s trust by constantly adhering to the highest ethical standards. We ask our colleagues to ensure that their decisions pass three tests: they are in our clients’ interests, create economic value and are always systemically responsible. When we do these things well, we make a positive financial and social impact in the communities we serve and show what a global bank can do.


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    1 CEO Remarks Akinsowon Dawodu Chief Executive Officer The Nigerian economy emerged from recession during the second quarter of 2017, thus ending five consecutive quarters of contraction. This turnaround was driven by improved foreign exchange stability, higher oil production volumes and prices as well as an overall improvement in the security situation in the country. Citibank Nigeria Limited was able to operate successfully within this improved operating environment by continuing to provide best-in-class solutions to customers, thus helping them navigate the persistently fluid economic realities. The bank also continued to focus on improved service delivery as a way to deepen existing customer relationships and build new alliances while clearly differentiating ourselves in the domestic market. In the year ahead, we expect the economy to sustain, and even accelerate, its recovery as the government promotes policies that maintain economic stability and continue to drive its “Ease Of Doing Business” initiative. As Nigeria navigates the volatile, and often competing, pressures of a changing global economy and its urgent domestic economic imperatives, Citibank Nigeria Limited will be sure to remain committed to its core objective of enabling growth and progress for our customers. This will be done by leveraging our unique positioning to deliver innovation, upgrade our services and put the bank’s global network at the disposal of our clients and stakeholders. Citi remain committed to our role as partners in Nigeria’s economic progress as we continue to work with both private and public sector entities in the country to develop the market and improve its financial infrastructure. Here is to a successful 2018! Akinsowon Dawodu Chief Executive Officer, Citibank Nigeria Limited 2017 ANNUAL REPORT


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    2 Contents CEO’s Remarks 1 Table of Contents 2 Board of Directors 3 Management Committee 4 Annual General Meeting Notice 5 Chairman’s Statement 6 Sustainability Report 14 Business Report 18 Corporate and Investment Banking 20 Risk Management 22 Treasury and Trade Solutions 24 Global Subsidiaries Group 26 Direct Custody and Clearing 28 Operations and Technology 30 Human Resources 32 Markets 34 Employee of the Year 35 Financial Report 36 2017 in Pictures 156 2017 ANNUAL REPORT


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    3 Board of Directors Olayemi Cardoso Mr. Akin Dawodu Dr. Shamsudeen Usman Dr. Hilary Onyiuke Chairman Dr. Daphne Dafinone Mr. Oyesoji Oyeleke Mr. Peter McCarthy Mrs. Ireti Samuel-Ogbu Ms. Diane Evans Mrs. Funmi Ogunlesi Mr. Fatai Karim Mrs. Nneka Enwereji Mr. Oluwole Awotundun Mrs. Olusola Fagbure Company Secretary and Legal Adviser 2017 ANNUAL REPORT


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    4 Management Committee Mr. Akin Dawodu Mrs. Funmi Ogunlesi Mr. Fatai Karim Mrs. Nneka Enwereji Managing Director and Executive Director and Executive Director and Executive Director CEO Head of Treasury and Head of Treasury and and Head of Global Trade Solutions Public Trade Solutions Client Subsidiaries Group Sector, Africa Operations SSA Mr. Oluwole Awotundun Mr. Segun Adaramola Mr. Mudassir Amray Mr. Bayo Adeyemo Executive Director and Head of Treasury and Head of Corporate and Country Treasurer and Country Risk Manager, Nigeria, Trade Solutions Investment Bank Head of Markets West and Central Africa Mrs. Aderonke Adetoro Mrs. Ngozi Omoke-Enyi Mrs. Sola Fagbure Mr. Sharaf Muhammed Securities Country Head of Operations and Country Counsel and Chief Finance Officer Manager Technology Company Secretary and Head of Strategy & Sustainability Ms. Shola Phillips Mr. Gboyega Oloyede Mr. Bolaji Ajao Ms. Chidinma Ohajunwa Country Compliace Country Human Head of Internal Audit Head of Operational Risk Officer Resources Officer Management Mrs. Lola Oyeka Country Public Affairs Officer 2017 ANNUAL REPORT


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    5 Annual General Meeting Notice NOTICE IS HEREBY GIVEN THAT THE THIRTY FOURTH ANNUAL GENERAL MEETING OF THE MEMBERS OF CITIBANK NIGERIA LIMITED WILL BE HELD AT CHARLES S. SANKEY HOUSE, 27, KOFO ABAYOMI STREET, VICTORIA ISLAND, LAGOS ON THURSDAY APRIL 19 2018 AT 1.00 P.M. FOR THE TRANSACTION OF THE FOLLOWING BUSINESS: ORDINARY BUSINESS: 1. To receive the Report of the Directors, the Balance Sheet as at 31st December, 2017 together with the Profit and Loss Account for the year ended on that date and the Report of the Auditors thereon. 2. To declare a dividend. 3. To re-elect Directors. 4. To authorize the Directors to fix the remuneration of the Auditors. SPECIAL BUSINESS: To receive the Report on the Board performance review conducted by Ernst & Young. BY ORDER OF THE BOARD OLUSOLA FAGBURE Company Secretary Dated this 15th day of March 2018 Charles S. Sankey House 27, Kofo Abayomi Street Victoria Island, Lagos. NOTE A member of the Company entitled to attend and vote at the above meeting is entitled to appoint a proxy to attend and vote instead of him and such proxy need not also be a member. A form of proxy is enclosed and if it is to be valid for the purposes of the meeting, it must be completed and deposited at the registered office of the Company not less than 48 hours before the time for holding the meeting. 2017 ANNUAL REPORT


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    6 Chairman’s Statement Olayemi Cardoso Chairman Fellow shareholders, members of the board of directors, distinguished ladies and gentlemen. I am pleased to welcome you to the 34th Annual General Meeting of Citibank Nigeria Limited and present to you its financial results and key achievements during the year 2017. Citibank Nigeria Limited continues to grow and make progress by creating sustained value for customers, employees, and shareholders of the bank. Macroeconomic Overview substantially for the rest of the year. Overall, the US economy grew by Growth in emerging and developing World Economy about 2.2% in 2017 compared to a economies was supported by The pace of global economic growth growth of 1.5% in 2016. Similarly, a resilient Chinese economy picked up in 2017 with the world economic growth in the Euro and recoveries in key emerging economy growing by about 3.6% Area, despite Brexit negotiations, economies including Brazil and compared to a growth of 3.2% in was also stronger at 2.1% in Russia that had begun the year 2016. This momentum was driven 2017. Much of this growth was in recessions. China, after a by a combination of sustained led by a combination of stronger slowdown in growth in 2016, grew growth in advanced economies consumption and rising external by about 6.8% in 2017 driven by and a continued recovery in demand for exports. The ongoing rapidly accelerating household emerging market economies that Quantitative Easing program and consumption. Despite concerns had previously been affected by negative interest rate environment about fiscal instability, high the slump in commodity prices and also remained vital clogs in the government debt and government various fiscal pressures. growth catalyst for the Euro Area. transparency, growth in the Chinese Similarly the Bank of Japan’s economy remains ahead of most Across advanced economies, negative interest rate, continuing expectations. Meanwhile, Brazil stronger than expected domestic Quantitative Easing program and finally came out of its longest demand and supportive external cap on long-term interest rates and deepest recession on record demand led to stronger than helped spur GDP growth in Japan following rising exports and expected growth in 2017. In the US, to 1.5% in 2017 from 1.0% in 2016. growing domestic demand spurred a weakness in consumption in the Overall, advanced economies by aggressive interest rate cuts first quarter of the year proved to contributed significantly to the by its central bank. The political be temporary as consumption and uptick in global growth in 2017. turmoil in Brazil is however likely business investment recovered to weigh on more rapid growth in 2017 ANNUAL REPORT


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    CHAIRMAN’S STATEMENT 7 2018. In Russia, higher oil prices about 0.7% in 2017 from 0.3% in imbalances, and idiosyncratic and relative macroeconomic 2016 despite an uncertain political factors could curtail growth stabilization returned the Russian climate; uncertainty that may prospects significantly in 2018. economy to growth in 2017. The weigh on growth again in 2018. In Russian economy grew by about Angola, similar to Nigeria and many Nigerian Economy 1.8% in 2017 compared to a 0.2% other oil producing Sub-Saharan Nigeria took positive steps towards contraction in 2016. The emerging economies, higher oil prices led to full economic recovery in 2017 economies rhetoric in 2018 improved economic growth in 2017 with the result that the economy will likely focus on whether the and point to improved economic grew by 0.8% during the year, individual economic recoveries growth prospects in 2018 as well. following a contraction of 1.5% can be sustained and backed by in 2016. Output was buoyed by supportive fiscal, monetary, and Global trade also picked up in 2017 a strong showing in the energy economic policy. reflecting a recovery in global sector following the rise in oil prices demand and capital spending. and oil production in the second Sub-Saharan African Economy This is a positive development for half of the year. Activity in the In Sub-Saharan Africa, growth Sub-Saharan Africa due to the manufacturing and services sectors accelerated to about 2.6% in 2017 accompanying effect it will have on however remained weak during the after a slowdown to 1.5% in 2016. commodity prices and investment year, highlighting what should be This growth is still under the 3.1% inflows as foreign capital seeks considered a very fragile recovery in growth recorded in 2015. Most higher yield. Despite steps towards from the country’s recession. of this growth was attributable the normalization of monetary to the positive response of Sub- policy in advanced economies The agricultural sector however Saharan Economies to various such as the US, UK, and Euro Area, continues to grow, albeit at a external pressures such as weak yields in Sub-Saharan Africa will slowing pace. The Agricultural commodity prices, reduced remain attractive to investors and sector is expected to continue capital inflows, and depreciating investments in 2018. Furthermore, dominating the country’s efforts to currencies. Favorable commodity with OPEC and Russia agreeing to diversify away from its dependence export prices for oil, agricultural extend oil output cuts until the end on Oil. Based on data from the inputs and other commodities of 2018, Sub-Saharan Africa growth National Bureau of Statistics, this led to increased economic output will likely be sustained in 2018. sector now contributes about and stronger currency buffers However, cogent downside risks 26% to overall GDP compared in many SSA countries. In South such as uncertain or inadequate to a 10% contribution by the Oil Africa, growth increased mildly to government policies, rising fiscal sector. The growth in agricultural 2017 ANNUAL REPORT


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    8 CHAIRMAN’S STATEMENT sector has been sustained by positive effects, there are concerns favorable government policies that about the sustainability of Nigeria’s In terms of regulation, the have enhanced access to credit, debt profile as debt servicing costs introduction of an Investors’ fertilizers, and consumer markets. represents an increasing proportion and Exporters’ foreign exchange In addition the sector has benefited of government revenues. Window and revised import and from the increasing focus on import export documentation guidelines substitution which has helped Inflation moderated in 2017, are some examples of regulatory bolster agricultural production. slowing to an average of 15.8% changes that affected the foreign compared to an average of 18.6% exchange and trade markets. Other As at December 2017, Nigeria’s in 2016. Part of this moderation key regulations introduced in 2017 foreign currency reserves had should be attributed to the include an Agri-Business/Small and increased by 52% to USD 38 billion already high base prices in 2016, Medium Enterprises Investment from USD 25 billion in 2016. This however the slowdown is welcome Scheme (AGSMEIS) into which all increase in reserves was driven by overall. Despite the moderating Banks are required to contribute the significant external borrowing inflation, the CBN maintained its 5% of their annual profits, and undertaken in 2017 and rising key monetary benchmark rate the ongoing implementation of oil export revenue. The Federal at 14.0% throughout the year, IFRS 9 (Financial Instruments) Government raised $4.8 billion in retaining an asymmetric corridor of for enhanced reporting. Citibank external debt via bonds in 2017, in +2%/-5% around the MPR. Other Nigeria Limited continues to comply line with its strategy to substitute monetary policy tools were also with all relevant directives. expensive domestic borrowing for kept constant with the apex bank cheaper foreign debt. The increase prioritizing a stable monetary policy Financial Performance 2017 in reserves helped enable a more environment. Looking forward, five stable management of foreign members of the current Monetary Maintaining its growth trajectory currency domestically for trade. Policy Committee are set to leave from the year before, Citibank This development, in combination their positions at the start of 2018. Nigeria Limited, in 2017, recorded with the introduction of the These changes, amidst a general improved financial performance Importers and Exporters NAFEX clamor for easing monetary with gross earnings increasing by window in April helped to stabilize policy in 2018, introduce further 24.9% to N66.8 billion compared to the exchange rate and played a part uncertainty regarding the direction N53.5 billion in 2016. Net operating in the eventual economic recovery. of monetary policy in 2018. income after loan impairment However, despite the short-term charges was N57.6 billion, an 2017 ANNUAL REPORT


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    CHAIRMAN’S STATEMENT 9 increase of 26.9% from N45.4 significantly above the minimum industry through various events billion in 2016, while operating regulatory requirement of 10.0%. and/or trainings. Some of these expenses increased by 27.3% to Our Liquidity ratio of 76.5% at the notable evens included: N16.8 billion from N13.2 billion end of 2017 was also well above recorded in the prior year. Overall, the CBNs minimum requirement of Direct Custody and Clearing profit before tax for the year rose 30.0%. (DCC) seminar – a one-day event by 26.9% to N41.0 billion from that brought together market N32.3 billion the prior year, while The 2017 financial results reflect the regulators, asset managers , profit after tax increased by 26.0% significant dedication and efforts of financial, advisory and legal to N32.0 billion compared to N25.4 all employees and stakeholders of experts, custodians, stock billion in 2016. Another year of the bank to respond in a gradually exchange and other industry strong profit growth reflects not improving economic environment. experts to discuss and explore only our increased efforts to be the These are very commendable the Nigerian asset custody partner of choice for our clients, but results as Citibank Nigeria ecosystem viz a viz international also a proactive risk management Limited has shown improvement best practices.. focus that enabled us minimize across major business segments. credit impairments during a difficult Overall, Citibank Nigeria Limited Citi China Day – the second economic year. The total assets on is adequately capitalized and well edition of Citi’s annual China our balance sheet closed the year positioned to take advantage of Day brought together a 2017 at N596 billion compared opportunities to support business number of high-profile industry to N604 billion in the prior year. expansion, deepen relationships participants. Following the The Return on Assets and Return and provide tailored advice for its growing bilateral trade and on Equity increased in 2017 to customers in the year ahead. strategic co-operation between 5.4% (2016: 4.2%) and 39.7% China and Nigeria and taking (2015:35.2%) respectively. Notable Events and into consideration Citi’s Activities focus on emerging markets, Citibank Nigeria Limited is in it became important and compliance with the Central Bank Citi is committed to building expedient for Citi Nigeria to of Nigeria Basel II regulatory capital capacity amongst its key pay the same level of special guidelines of the CBN and remains stakeholders and taking advantage attention to this economic well capitalized with a Capital of its global resources to strengthen group of investors. The event Adequacy Ratio of 28.3%, which is the knowledge base in the financial created an enabling platform 2017 ANNUAL REPORT


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    10 CHAIRMAN’S STATEMENT for Chinese corporations to get from Citi EMEA Trade Advisory Citi Tech for Integrity (T4I) a better understanding of the and Trainer with experience Activation Event – T4I is a Nigerian business environment, in International trade and landmark effort to encourage recent regulatory changes, payments. technology innovators from macroeconomic developments Accion Microfinance Bank around the world to create and government policy direction. (Accion MFB) loan - Citi cutting-edge solutions to It also created an opportunity Nigeria extended a loan of promote integrity, accountability for the Chinese business NGN500 million to Accion and transparency in the community in Nigeria to engage Microfinance Bank (Accion public sector and beyond. with economic and banking MFB) in Nigeria to drive and The Activation Event in thought leaders and imbibe best promote the development of the Nigeria was co-hosted by practices that Citi has deployed microfinance sector in Nigeria. Techpreneur Africa and saw globally. This loan will fund Accion’s over 80 attendees, including loan portfolio and support the accelerators, tech companies, Cash & Trade Seminar - a week- development of approximately and innovation hubs. T4I allies long event for banking industry five thousand micro and small present included Techpreneur professionals. The seminar enterprises in the country. The Africa, International Finance had over 45 participants from agreement will also support Corporation, PwC, Ventures various banks in the industry. the Central Bank of Nigeria’s Platform, and Startup52. The course is designed to National Financial Inclusion provide both intermediate Strategy (NFIS) to reduce Citi Journalistic Excellence analysis of international cash & the proportion of excluded Award (CJEA) – a global Citi trade policies and processes and population by bringing them competition which began as a an insight into current global into the formal banking fold. As way of recognizing journalists developments and emerging at 2012, according to a survey for excellence in financial trends. The forum also provides by the Enhancing Financial and business reporting in the an excellent opportunity for Innovation and Access (EFInA), markets in which Citi does interactive discussions between about 39.7% or 34.9 million business around the world. key operators in the local adult Nigerians were excluded The CJEA is a unique program market. The primary facilitator from financial services. sponsored and co-hosted by was Mr. Parvez Todiwala a Citi and Columbia’s Graduate renowned Senior Trade Advisor School of Journalism, with 2017 ANNUAL REPORT


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    CHAIRMAN’S STATEMENT 11 nominees selected by an and Communication PAU, the Corporate Citizenship independent panel of judges. Central Bank of Nigeria, Ms. Caleb Ojewale, Multimedia News Bunmi Lawson the former MD/ We continue to applaud the efforts Content Producer, BusinessDay CEO of Accion Microfinance of our non-profit partners such as Nigeria and winner of the 2017 Bank Nigeria Limited, Mrs. Junior Achievement, Technoserve, award, joined other winners Hansatu Adegbite ED, Women LEAP Africa, United States African from across the world to in Management, Business and Development Foundation who, participate in an 8-day business Public Service (WIMBIZ), and Citi alongside Citi, continue to promote and financial seminar in New Nigeria Senior Management. economic progress and improve York City. The program offers the lives of people in low-income participants rigorous workshops Awards and Recognitions communities around Nigeria. Our in the principles of accounting combined efforts have seen an and finance, and exposure to Citi’s continued focus as trusted increase in financial inclusion, job institutions, policy makers, and banking partner to its target market opportunities for the youth and other thought leaders in the paid off as was evident in the innovative approaches to building United States. numerous awards received. Some of an economically vibrant nation. the notable awards received in 2017 Citi Financial Journalist included: Training (CFJT) – a capacity • Global Finance Magazine Awards Citi also celebrated its 12th annual building initiative that was 2017 Best Corporate/Institutional Global Community Day as more pioneered in Nigeria which Digital Bank in Nigeria. than 1,600 Citi volunteers in provides training and a multi- • Euromoney Best Cash Aba, Abuja, Kano, Lagos, Port- party dialogue on financial Management Bank for Nigeria - Harcourt and Warri lead sporting concepts. Citi collaborated for over 10 years in a row. activities, financial literacy and with the School of Media and • Lifetime Achievement Award – entrepreneurship workshops, and Communication Pan-Atlantic African Banker Awards (2017) donated supplies in their local University (PAU) in 2017 and • Global Euromoney Awards for communities. Various community hosted a total of 17 national Excellence 2017 - Best Digital partners joined the volunteer business and financial Bank, Best Bank for Financial efforts. For the second year in a row journalists in the 3-Day training. Inclusion, Best Bank for Markets, Facilitators included Faculty Best Bank for Transaction from the School of Media Services (2016 & 2017) 2017 ANNUAL REPORT


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    12 CHAIRMAN’S STATEMENT IHS Nigeria, a Citi client, Bloomberg and vulnerable youth from the independent director. Dr. Usman Media Initiative Africa (BMIA) communities hosting them with brings a wealth of experience alumni and Junior Achievement support to help them generate a from both the public and private Nigeria (JAN) joined the Lagos reliable income and contribute to sector. Mr. Olusoji Oyeleke S.A.N., a events. their local economy. Throughout the distinguished legal practitioner and two-year project, Rescuing Futures, accomplished business man was Citibank Nigeria Limited hosted young people in Yola, Nigeria, will also appointed to the Board in April its Community Partner (Cheque) be supported to start their own 2017. Dr. Usman and Mr. Oyeleke Presentation in Lagos to honour the businesses. replaced Chief Arthur Mbanefo and 18 Community Partners in Lagos. Mr. Michael Murray-Bruce (both of Attendees at the Lagos event Board of Directors whom resigned from the Board in included SOS Children’s Village, 2016) respectively. Down Syndrome Association of In 2017, the Board of Directors Nigeria Atunda Olu School (For continued to ensure that high In October 2017, Ms. Diane Evans, Physically Handicapped Children), standards of corporate governance Citigroup Risk Head for Sub- Bethesda Child Support Agency, were maintained in the Bank. Saharan Africa was appointed to The Book Trust Wesley School 1 and the Board to replace Mr. Philip 2 for the deaf, Pacelli School for There were two resignations Cullingworth. In December 2017 the blind, Care Organization Public from the Board in 2017. Mr. Philip Mr. Oluwole Awotundun, Country Enlightenment (COPE), Sickle Cell Cullingworth resigned from the Risk Manager for the Bank, was Foundation, Heart of Gold Children’s Board in February 2017 and Mr. appointed an Executive Director to Hospice, Nigerian Red Cross Society Chinedu Ikwudinma resigned replace Mr. Chinedu Ikwudinma. and the Office of the United Nations from the Board with effect from High Commissioner for Refugees September 6, 2017. We are grateful In the area of gender balancing, the (UNHCR). for their service to Citibank Nigeria Board has made giant strides over Limited and wish them both well. the years by increasing the number A new partnership was launched of women on the Board, in line with between the Citi Foundation and There were four appointments to Citi’s commitment to diversity and the International Rescue Committee the Board in 2017. In April 2017, women’s empowerment. There are (IRC) that will provide young people Dr. Shamsuddeen Usman was currently five women on the board. displaced within their own countries appointed to the Board as an Arument ut apienis eos erit, illuptatem quaeper oribus Arument ut apienis eos erit, illuptatem quaeper oribus sinimincim esci asitat. Sum aut ipiet, volupta sendand sinimincim esci asitat. Sum aut ipiet, volupta sendand andaest. Musciume il magni conse corpostiores eaque andaest. Musciume il magni conse corpostiores eaque 2017 ANNUAL REPORT


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    CHAIRMAN’S STATEMENT 13 Conclusion Please permit me to extend, on your my colleagues and fellow members behalf, our heartfelt appreciation to of the Board of Directors. Your the management and staff for their cooperation, wisdom, loyalty and continued commitment to Citibank hard work have immeasurably Nigeria Limited and for another contributed to the success and year of growth. continued development of Citibank Nigeria Limited. As we look to the I also wish to express my future, I say congratulations to all of appreciation to the shareholders you on another excellent year. of Citibank Nigeria Limited for their constant support and encouragement over the course of the last year. Your contributions are highly valuable and have played a major role in the continued success of our bank. Olayemi Cardoso In conclusion, I offer my gratitude to Chairman 2017 ANNUAL REPORT


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    14 Sustainability Report 2017 Citi Nigeria Limited has a long Citi Nigeria is an inextricable part environmental and social risks, standing commitment to conduct of this sustainability mission. The reducing our operational footprint, business in a manner consistent world is moving at a rapid pace and managing our supply chain, with the Citigroup core principle toward cleaner, more sustainable is aligned with and contributes of Responsible Finance. Citigroup sources of energy and businesses to Citi’s goal to create the best has an Environmental and Social around the world are leading the outcomes for our clients by Advisory Council that provides way with new ideas, plan and providing financial solutions that guidance on environmental and projects. Citi is proud to deliver are simple, creative and responsible. social issues related to global both the investments and finance business activities. This council required to bring these ideas, plans, is co-chaired by executives in our and projects to reality. We recognize Institutional Clients Group and that sustainability issues could includes executives from Banking, impact the viability of projects, The world is moving at a Risk, Public Affairs, Operations, ability of a potential customer to Corporate Sustainability, and fulfill its obligations to the firm, rapid pace toward cleaner, specialists in the Environmental and and, ultimately, Citi’s reputation. more sustainable sources Social Risk Management (ESRM) As a result, we pro-actively assess team. This council advises on covered transactions in line with of energy and businesses Citigroup’s ambitious Sustainable our Sustainability Vision. around the world are Progress Strategy which aims to leading the way with new incorporate sustainability principles Citi Nigeria Limited’s sustainability into everything we do and facilitate vision entails conducting business ideas, plan and projects. $100 billion in environmental in an environmentally and socially Citi is proud to deliver finance activities globally; a goal we responsible manner. In addition committed to in 2014. to making good business sense, both the investments and this is consistent with our goal finance required to bring of being a good corporate citizen sensitive to the communities in these ideas, plans, and which we do business. This belief, projects to reality reflected in our dedication to financing environmental business opportunities, actively managing 2017 ANNUAL REPORT


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    SUSTAINABILITY REPORT 2017 15 Citi Environmental and Social Program Finance Initiative (UNEP Strategy, Citi announced a ten-year, Policy Framework FI) $100 billion environmental finance United Nations Global Compact goal to lend, invest and facilitate Citi Nigeria’s Environmental and United Nations Guiding Principles $100 billion to environmental and Social Policy Framework includes on Business and Human Rights climate solutions. categorization requirements and, United Nations Universal as appropriate, environmental declaration of Human Rights II. Environmental and Social Risk due diligence and elevated review Management and approval requirements for These principles guide Citi’s Citi lends and mobilizes billions corporate and government loans, Environmental and Social Policy of dollars of capital towards a project finance transactions, Framework which covers all variety of companies and projects, acquisition finance, letters of credit, business units within the firm, with including sectors that may be bid bonds, performance bonds, and the objective of ensuring that all of associated with environmental and project finance advisory mandates. Citi’s businesses effectively assess social impacts and risks. Before This framework reinforces and manage the environmental and making a financing decision, we Citi’s commitment to managing social risk associated with business. carefully assess the extent of environmental and social risks in a The Pillars of Citi’s Environmental these impacts and work with our rigorous and effective manner. and Social Policy are outlined clients to apply a clearly defined below; set of environmentally and socially In developing this framework, Citi responsible policies consistent with adopted the external principles I. Environmental Finance leading international standards and and standards listed below, which Citi, through its global business good practice. help to inform our approach to activities, seeks to use its skills and sustainability and risk management; assets to accelerate capital markets Citi’s Environmental and Social Equator Principles solutions to major environmental Risk Management (ESRM) Policy is Green Bond Principles problems. We do this through outlined below; International Labour specific business units dedicated Organization’s Declaration on to developing environmental A. Firm-Wide Prohibitions Fundamental Principles and finance products as well as by Citi does not directly or indirectly Rights at Work identifying opportunities through finance the following types of Natural Capital Declaration our traditional businesses. In 2015 projects or activities; United Nations Environment as part of our Sustainable Progress • Production or activities involving harmful or exploitative forms of forced labor • Production or activities involving harmful or exploitative forms of child labor • Illegal logging • Production or trade in any product or activity deemed illegal under country laws or regulations • Production or trade in wildlife or products regulated under CITES (the Convention on International Trade in Engendered Species of Wild Fauna and Flora or activity deemed illegal under country laws or regulations 2017 ANNUAL REPORT


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    16 SUSTAINABILITY REPORT 2017 • Drift net fishing in the marine IFC’s environmental and social • PS 7 – Indigenous People environment using nets in screening criteria to characterize • PS 8 – Cultural Heritage excess of 2.5 km in length the magnitude of impacts understood as a result of the E. Independent Review B. Areas of High Caution and assessment. Categories include All Category A and certain Special Focus Category B Equator Principles- Consistent with the • CATEGORY A – use of covered project finance precautionary principle of proceeds are likely to have transactions, and any Equator “do no harm,” Citi recognizes potential significant adverse Principles-covered project that there are certain “areas social or environmental related corporate loans that of high caution” that require impacts that are diverse, trigger Equator Principle 7 special attention, focus irreversible or unprecedented; “high risk impacts” require and respect. Utilizing the • CATEGORY B – use of review by an independent relevant International Finance proceeds is likely to have environmental and/or social Corporation (IFC) Performance potential limited adverse expert not associated directly Standards and national laws, Citi social or environmental with the borrower. Independent only proceeds with investments impacts that are few in review may be required of that impact these areas after number, generally site-specific, other ESRM Covered Category a thorough and judicious largely reversible and readily A transactions in “areas of assessment of impacts and risks, addressed through mitigation high caution” (see above) or of and confirmation that mitigation measures; transactions subject to certain measures have been or will be • CATEGORY C – use of ESRM sector standards (as designed to comply with Citi’s proceeds expected to have described on pp. 5-7), as deemed policies and standards. minimal or no social or appropriate by Citi Independent environmental impacts; and Risk. C. Firm-Wide Sector Standards • CATEGORY GR – “general Citi recognizes that there are review,” use of proceeds are III. Operations and Supply Chain a number of important areas directed to multiple projects Since 2001, Citi has been working that require increased attention with varying risk levels to measure, manage and reduce via sector-specific policy or the direct environmental impacts of guidance not available through The screening and categorization our operations. Our efforts reduce the IFC Performance Standards, criteria above are supplemented costs, enhance work environments IFC Environmental Health by a focus on a number of broad, and productivity, and enable us to and Safety (EHS) Guidelines, high-level issues as framed by the speak from a position of experience or national or internationally IFC Performance Standards. The when our clients need support. accepted standards. To Performance Standards include; address this, Citi’s ESRM Policy The two key elements of Citi’s incorporates several sector- • PS 1 – Assessment and Supply Chain Diversity and specific standards for the sectors Management of Environmental Sustainability Program are i) Citi’s below; and Social Risks and Impacts Statement of Supplier Principles, • Coal Mining • PS 2 – Labor and Working and ii) the Corporate Responsibility • Forestry Conditions Questionnaire. Citi’s Statement of • Nuclear • PS 3 – Resource Efficiency and Supplier Principles communicates • Oil Sands Pollution Prevention our values related to ethics, • Palm Oil • PS 4 – Community Health, sustainability and human rights. • Shale Oil and Gas Safety and Security The principles have been circulated • PS 5 – Land Acquisition and to our top approved suppliers D. ESRM Screening and Involuntary Resettlement and continue to be socialized Categorization Criteria • PS 6 – Biodiversity and communicated internally As part of the review of a Conservation and Sustainable and externally. Citi also engages transaction’s environmental and Management of Living Natural suppliers through its Corporate social risks, Citi uses a system Resources Responsibility Questionnaire (CRQ). of categorization based on This tool assists the procurement 2017 ANNUAL REPORT


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    SUSTAINABILITY REPORT 2017 17 Electricity Consumption Diesel Consumption (KwH, in Thousand) (Litres, in Thousands) 1052 910 881 667 Since 2001, Citi has 498 447 772 809 been working to measure, manage 2014 2015 2016 2017 2014 2015 2016 2017 and reduce the direct environmental impacts Total Fuel Consumption by Total Air Mileage (Miles) of our operations. Company Fleet (Litres) Total CO2 emission (Metric tons) Ave. fuel use per employee 1861 66,345 team in determining how well 51,900 313 potential and current suppliers are 1009 42,389 951 managing corporate citizenship, 274 249 environmental sustainability and 216 diversity components within their 186 169 business. 2015 2016 2017 2015 2016 2017 IV. Human Rights Citi supports the protection and preservation of human rights Activities and Initiatives loan will fund Accion’s loan portfolio around the world and is guided and support the development of by fundamental principles of Since 2001, Citi has been working approximately five thousand micro human rights, such as those in to measure, manage and reduce and small enterprises in the country. the United Nations Universal the direct environmental impacts of The agreement will also support the Declaration of Human Rights our operations. We have provided Central Bank of Nigeria’s National and the International Labour physical access to the physically Financial Inclusion Strategy (NFIS) Organization’s (ILO) Declaration challenged members of the society to reduce the number of excluded on Fundamental Principles and in our head office and most of our persons by bringing them into Rights at Work (including the eight branches. We continue to manage the formal banking fold. This loan core conventions8). Citi is also a our direct environmental footprint is part of a long term business signatory to the United Nations by measuring our operational partnership between Citi Inclusive Global Compact. Citi supports environmental footprint—electricity Finance, Citi’s specialized unit for the United Nations Guiding use, fuel consumption, water microfinance and inclusive finance Principles on Business and Human use and waste. To reduce carbon transactions, and the Overseas Rights, including the corporate emissions, we encourage the use Private Investment Corporation responsibility to respect human of video and audio conference (OPIC). rights. Our support for these meetings rather than face-to-face fundamental principles is reflected meetings that require travels. By partnering with other banks in our policies and actions toward and microfinance institutions, Citi our employees, suppliers, clients Citi is committed to sharing best continues to explore innovative and the countries where we do practices and improving the avenues to provide capital to those business. We work with our clients financial literacy base of financially who otherwise would not have had to respect human rights through excluded individuals. Citi Nigeria access. The promotion of diversity, application of our ESRM Policy in extended a loan of NGN500 million one of the key pillars of Citi’s client engagements and through to Accion Microfinance Bank operating culture, also ensures the diligence we perform related to (Accion MFB) in Nigeria to drive and that Citi continues to provide equal transactions. promote the development of the opportunities for all irrespective of microfinance sector in Nigeria. The gender, religion or race. 2017 ANNUAL REPORT


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    18 2017 ANNUAL REPORT


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    19 Business Report 2017 ANNUAL REPORT


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    20 Corporate and Investment Banking management advice and solutions, first time, and has remained and remains confident in the stable to date at c.US$/NGN360- country’s long term economic 365. Portfolio inflows have also prospects as well as that of Citi’s since returned via this window, rapidly growing client base. reaching over $10bn in aggregate by September 2017 and lifting the Despite initial macro-uncertainty Nigerian Stock Exchange, which is from the UK Brexit vote and the at an eight-year high, with a market U.S. presidential elections, global capitalization of over 40,000. The corporates in 2017 experienced a apex bank had earlier introduced significant recovery with equity the sale of FX forwards and futures valuations reaching a peak levels that provided some much needed with a median forward P/E of 18x comfort to manufacturers and Mudassir Amray Head of Corporate and globally and 20x in the U.S. The U.S. relieving pressure on the parallel Investment Bank announced a tax reform as well as market. a monetary policy normalization regime expected to involve higher Following the decision of the Citi’s Corporate & Investment corporate earnings, modest rate Monetary Policy Committee at the Banking (CIB) Group’s key business hikes and yield expansion that fourth meeting of 2016 to raise objective remains to be the may have an impact on portfolio the policy rate (MPR) by 200bps strategic advisor of choice to outflows, though emerging markets to 14% against market consensus, our valued clients, by providing are expected to remain resilient. the Committee held the MPR differentiated industry advice constant through 2017, despite and expertise. Citi offers a broad By the third quarter of 2017, having met six times through the range of products including; Nigeria’s economy had exited year, and retained the Cash Reserve Corporate Finance, Investment negative growth territory, Requirement (CRR) on private and Banking, Transaction Services demonstrating real GDP growth public sector deposits at 22.5%, (Cash Management, Trade Products of 1.40%, (Q2 2017 +0.55%), a the Liquidity Ratio (LR) at 30% and Custody Services), Treasury reversal of the gloomy picture at and the asymmetric corridor services (Fixed Income, currencies the end of 2016 - an economic at +200bps/-500bps. Analysts and commodities) and structured recession evidenced by multiple believe that the overarching factor solutions to meet the needs of our quarters of negative growth. Real guiding the MPC’s tight regime clients. GDP growth in FY 2016 amounted is the quest to attract and retain to -1.5%, the worst full-year decline foreign portfolio inflows. Going Citi continues to face competitive in twenty-five years - as both oil forward, the MPC may maintain pressure with the local presence and non-oil GDP contracted. The its tight policy regime longer of regional and global banks such improvement witnessed in 2017 was than expected as global investors as Rand Merchant Bank (RMB), largely attributed to improved oil monitor recent developments in the Barclays, Standard Chartered (SC) production and price recovery in U.S. Federal Reserve’s monetary and JP Morgan, and Goldman the global markets. The real sector policy normalization process and its Sachs on select transactions. With (trade, manufacturing, finance, impact on capital flows to emerging this backdrop, Citi’s CIB team has insurance, information technology) markets. remained focused and consistent is yet to recover fully, hence in delivering best in class product growth is observed as volatile and Gross external reserves stood at solutions and services to meet the vulnerable to shocks. $40.4bn by early January 2018, needs of its clients. up from $25.84bn a year earlier, The Central Bank of Nigeria an increase attributed primarily Citi remains committed in (CBN) introduced an Importers & to rising crude revenue due to supporting its clients to successfully Exporters window in April 2017 a recovery in global oil prices, navigate market volatility driven which significantly impacted the increased portfolio inflows, and by the challenging backdrop of FX market as the gap between the the success of Nigeria’s Eurobond persistently low crude prices, official and the parallel market offerings. On November 7 2017, providing the necessary risk exchange rate narrowed for the Nigerian President Muhammadu 2017 ANNUAL REPORT


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    21 Buhari presented a record budget recovering economic growth in the to lawmakers to boost the nation’s west and sustained growth outlook spending by 18% in 2018 in a bid in China and India, despite recent to further stimulate growth in an property and debt shocks. Sub- economy that had just reversed a Saharan Africa continues to offer full-year contraction for the first a mixed picture; whilst economies Citi remains focused on time in over two decades. Buhari like Cote D’Ivoire and Tanzania’s being the trusted advisor asked lawmakers to allow his have continued to grow at a pace to its clients, making the government to spend NGN8.63tn faster than most in the continent, ($283bn) in 2018 in a proposal both have shown signs of slowing; bank their first port of based on a projected oil price of Cote d’Ivoire due to a slump in call and ensuring that Citi $45.00 per barrel, and daily oil cocoa prices, mutiny and workers’ delivers the best possible production of 2.3mn barrels. The strikes. Angola, Ghana, Nigeria products and services administration is also continuing and other commodity dependent to them in a seamless the theme of recovery through economies have experienced a infrastructure spending, allocating tepid recovery from recession manner. 28% (NGN 2.42tn) to this, focusing largely due to the recent oil-price on Power, Transportation, & recovery in global markets. They Agriculture. Non-oil revenue of seek to attract continuous offshore NGN4.17tn ($13.7bn) is to account inflows through internal monetary capital markets (rights issues and for almost double oil revenue policies while implementing internal primary equity offerings within an NGN2.44tn. reforms aimed at revenue base improved valuation environment), diversification. debt capital markets (sustained Citi continues to dialogue closely interest among FIs on the back of with its clients providing creative The Nigerian economy is expected multiple successful sovereign & FI solutions to their businesses while to witness sustained recovery in issuances), and advisory (corporates financing their needs in conjunction 2018 with a growth estimate of seeking foreign strategic with the bank’s product partners. 2.5% according to the World Bank partnerships to bring in some much Citi also leveraged on its global with promising prospects from needed capital). Citi continues to network to support Nigerian the non-oil sector which remains be a trusted advisor to many of its corporates as they expand their relatively buoyant, particularly clients, as we always would be side businesses in the region and other in agricultural production and by side with our clients providing locations. infrastructure development. Crude our advice, our reach and resources oil prices are expected to remain to support their growth plans. Global economic activity is at the recent levels above US$60 projected to pick up pace in 2018 a barrel (Brent futures reaching Citi remains focused on being (3.7% growth estimate over 3.6% $67.12, levels unprecedented since the trusted advisor to its clients, in 2017 according to the IMF), May 2015), as markets gauge the making the bank their first port of especially in emerging market long term effects of production call and ensuring that Citi delivers and developing economies, with a cuts by OPEC and Russia, and anti- the best possible products and 4.5% target according to the World government rallies in Iran. services to them in a seamless Bank, relative to 2.2% in advanced manner. In this regard, the team has economies. According to a Reuters Nigeria weathered macroeconomic continued to surpass expectations, poll, China is expected to grow at headwinds in 2017 that led to a working with Citi’s product partners 6.4% in 2018 (down from 6.8% in recovery of GDP growth, and has across electronic banking, cash, 2017), while India is expected to arguably begun to witness the liability management, mergers & grow at 7.3% in 2018 (up from 7% fruit of its drive to improve non-oil acquisitions, equity & debt capital in 2017). revenue generation while focusing markets, trade and treasury. Citi on infrastructure spending. Within is committed to the continuous Capital inflows are expected to this backdrop, there are some growth and development of remain at sustained levels in opportunities for us to create talent, as this remains the key emerging markets, due to strong value for our clients, across equity differentiator for Citi. 2017 ANNUAL REPORT


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    22 Risk Management non-OPEC members to extend the The Federal Government’s pace deal till end of 2018, along with at addressing the structural spontaneous geopolitical tension, weakness in the economy through provided sufficient support for its Economic Recovery and Growth crude prices – with Brent crude Plan (ERGP) remained much slower firming above the $60pb in than anticipated. The government’s November 2017 – the highest level significant reliance on oil to drive since 2014. Nigeria continues to its exports and growth remains a benefit from the output cut that key challenge. Whilst the recovery was agreed in December 2016 – as it of the oil price and the uptick was exempted from the production in oil production have led to the cap; hence, it remains one of the oil revenues outperforming the major beneficiaries of the price government’s budget, and to Oluwole Awotundun Executive Director and Country recovery, given the stability in an overall improvement in the Risk Manager, Nigeria, West and its oil production as the ongoing country’s metrics, the damage to Central Africa engagement with the Niger Delta the economy occasioned by the oil stakeholders has ensured limited shock of the past two years is yet disruptions to oil installations in the to be undone, and the weakness is The year 2017 started on an region. expected to extend into medium insipid note, as the economy, term. which had plunged into recession The country’s economic metrics in 2016 remained characterized remained on the positive trajectory Though the government made by foreign exchange crisis cum in the second half of the year – with some progress at increasing non-oil capital controls, declining foreign strong traction in the key economic revenues through the broadening exchange reserves and elevated metrics – specifically with respect of tax base and enforcement of inflation. However, there was a to foreign exchange markets, CPI, compliance, the impact has been slight turnaround in the country’s foreign reserves and crude output limited – with tax revenues still economic metrics in the second and prices. The stability in the at less than 20% of the country’s half of the year – with positive GDP country’s oil output, in addition total. The challenges on the growth of 0.55% in Q2 ’17, and to its exemption from OPEC’s diversification of the revenues the country closing the year with production cap, and the recovery continue to negatively impact annual positive growth of 0.44%. of prices at the international potential growth. The growth was driven by driven market resulted in strong accretion The relatively high non-performing by improved access to foreign to the reserves, which provided loans of Nigerian banking industry exchange – occasioned by improved the support for Central Bank’s on account of the macro issues that liquidity in the foreign exchange spontaneous interventions in the have characterized the economy markets and the accretion to the foreign exchange markets. This, between 2014 and 2016 remain a foreign exchange reserves; the together with the sustained inflows challenge for the regulators and game changer was the introduction by portfolio investors into the I&E’s the players. While the issue was of Investors’ and Exporters’ (I&E) FX Window, resulted in marked exacerbated by the increased Forex Window by the Central Bank improvement in foreign exchange borrowing costs in the second of Nigeria in April 2017. liquidity in the markets – and the half of the year, the recovery in contraction in past due trade the crude, the accretion to the The decision by OPEC and major obligations across the banking foreign reserves and the return of non-OPEC oil producers to cut industry. Of particular note is that the economy to positive growth oil output in December 2016 for Nigeria’s exemption from OPEC’s trajectory provide some potential an initial period of 6months till output restriction provided a upside in the industry’s prognosis. June 2017 to address the glut that significant upside for the country’s Furthermore, some of the industry’s had characterized the markets revenues – as the crude price oil & gas exposure are likely to provided the support for the remained significantly above the start “performing”, if the strong turnaround in the prices of crude. budget benchmark. recovery in crude price that has The agreement by the OPEC and 2017 ANNUAL REPORT


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    23 characterized the markets in the there are risks of potential past few months is sustained. monetary tightening by central banks as there are indications they Despite the slight uptick in the may proceed with the unwinding country’s GDP in the second half of some of the financial crisis-era of the year, corporate performance support – given the uptick in the On the outlook for 2018; remained constrained on account key metrics and the strong growths of the legacy macro issues, which that have been recorded in most of the expectation is that was partly exacerbated by the the economies. We expect the likely monetary tightening – as sales spike in interest rates to exacerbate the ongoing recovery in were constrained by the absence the likely reduction in foreign flows the Nigerian economy of liquidity to support effective as political risk heightens in the run- demand. up to the 2019 general elections. will be sustained. On the outlook for 2018; the Whilst we expect the positive expectation is that the ongoing traction that we observed in the recovery in the Nigerian economy economy in the second half of the will be sustained. However, political year with respect to some of the Overall, Citi portfolio is expected risks may likely depress the growth key indicators to continue in the to remain relatively stable – as the momentum in the second half of the near term, the economy would bank would continue to operate year – as politics upstages policy remain vulnerable to the residual in line with its target market implementation, in addition to macro challenges, which continue definitions and portfolio strategy. potential regression in investments to hunt some of the corporates and We will continue to keep a tab on by local and foreign investors. financials. Citi Nigeria’s portfolio the dynamics in both the local Furthermore, the government’s is not immune to these challenges, and global politics and economics significant reliance on oil to drive its as we have observed some – making adjustments to our risk exports and growth also presents weaknesses in the profiles of some appetite and assets creation – as a significant downside to the of its obligors. However, the bank necessary. country’s prognosis. has taken measures to manage its exposure to these clients. With growths normalizing in a number of developed economies, 2017 ANNUAL REPORT


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    24 Treasury and Trade Solutions delivery across the bank’s MassPay platform. The managed liberalized FX market environment in the year 2016 which persisted till the earlier Citi’s award winning months of 2017 was not without e-banking platform its challenges as distortions to CitiDirect, alongside its the flow of liquidity in the system generated significant volatilities in mobile tablet version the pricing of liquidity at the short (CitiDirect BE Mobile) end of the yield curve. This further remains Citi’s single accentuated the need for a more channel for connecting Segun Adaramola nimble payments infrastructure for Head of Treasury and and enabling clients Trade Solutions just-in-time movement of liquidity to settle obligations as well as to access payment access FX opportunities across the products in the Cash Management financial system. The achievements payments system. Citi’s Liquidity Management in the payments system from an Solutions, enhanced by Host–to- infrastructure perspective enabled Host connectivity for improved Treasurers operate in a more client. Such loans have significant operating efficiency, remains a nimble and flexible manner to impact in developing markets such defining differentiator with Citi’s meet the exigencies of business as Nigeria and provide a template for clients and in the market place. requirements. other borrowers both in Nigeria and in Citi’s broad proposition is to the African region. They also increase enable channel innovation for Citi’s award winning e-banking the visibility and credibility of Nigerian clients to perform their liquidity platform CitiDirect, alongside its corporates in the international and balance sheet management mobile tablet version (CitiDirect BE financing market. activities efficiently, supported by Mobile) remains Citi’s single channel Citi’s global proprietary platforms. for connecting and enabling clients Citi engaged clients to commence the Citi is well positioned to partner to access payment products in the initiation of Letters of Credit on Citi’s with Treasurers to maximize the payments system. The aim is to proprietary-customer Trade front-end power of their balance sheets for continue to draw on the strength of platform - CitiDirect for Trade, putting improvement in profitability. Citi’s infrastructure and digitization them in the forefront of digitization. drive to develop solutions and Citi’s best-in-class working capital Citi continues to build on the leverage market infrastructure to solution - Supply Chain Finance successes of the payment system maintain the bank’s competitive (SCF) program enabled the bank’s reforms in improving the risk edge in the market. clients to benefit from balance sheet architecture around delivery optimization and increased access channels and products, while Trade Products to alternative funding, while also enhancing the capacity of the In 2017, Citi focused on the delivery accessing the efficiency benefits of market to support bulk payments of customized Trade Services Citi’s fully automated processing for instant delivery through the Products - Letters of Credit, Bills platform. clearing system. Citi implemented for Collection and Guarantees as the NIBSS Automated Payments well as Official Agency Supported With relative stability in FX availability, System (NAPS) and completely Financing. In the face of the FX envisaged increase in trade activity cut-over from NIBSS Electronic challenges witnessed during the in 2018 and the backward integration Funds Transfer (NEFT), deriving first half of 2017, Citi continued focus of the Federal Government in the benefits of the NIBSS Instant to support clients with structured a pre-election year, Citibank Nigeria Payment (NIP) product for the products that enabled continued is well positioned and adequately bulk / batch processing option. Citi operations. During the year Citi armed with trade solutions to ease the effectively enhanced its capacity arranged ECA-backed financing to process for its clients, as the country for bulk payment to near instant support the CAPEX needs of its 2017 ANNUAL REPORT


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    25 moves towards import substitution clients’ banking activities. Citi also and export promotion. received the prestigious Adam Smith award as Highly Commended Solution Sales in the “Best in Class Treasury Positive macroeconomic trends Solution in Africa” category for helped in restoring some confidence the solution suite implemented for Citi will continue to focus in the Nigerian economy. This led Nigerian Breweries Plc. on the enhancement of to re-invigoration of activities and surfacing of opportunities for Citi is poised to follow through on its service proposition further investment in the country. the opportunities that surfaced in to clients by deploying Engagement with clients improved 2017 and deepen engagement with value-added and from prior year as the restriction its clients accordingly. The goal is innovative solutions on business activity, which had to stay close to clients and ensure which will enable been imposed by the earlier FX we remain their trusted partner for scarcity, became more relaxed with the provision of transaction banking the bank’s clients to the improved availability of FX. Citi solutions. optimize their operating also witnessed a number of clients performance. centralizing their operations for Implementations efficiency. Citi’s Implementation team was able to manage the delivery of Cash, Citi actively engaged with clients Cards and Trade products to clients and organized a number of using client-friendly implementation Planning (ERP) systems. These thought leadership events, which models. Onboarding experience solutions enabled Citi clients to included a Digitization event, a for clients was consistently enhance their organizational work Cybersecurity Roadshow for Public maintained, which resulted in faster flow process, improve their overall & Private Sector clients, a Liquidity and efficient solutions delivery of productivity while aligning with Management seminar, a Tax event mandates received. various regulatory requirements. and an Electronic Banking practical workshop, among others. Implementation of tailored In 2018, Citi will continue to focus In 2017, Citi Nigeria won the electronic solutions that provide on the enhancement of its service Euromoney Cash Management greater efficiency were popular proposition to clients by deploying Award for “Best Domestic Cash amongst the bank’s clients in the value-added and innovative Manager in Nigeria” for the 10th course of the year with increased solutions which will enable the consecutive year. This demonstrates requests for robust integration bank’s clients to optimize their Citi’s continued impact on its with clients’ Enterprise Resource operating performance. Citi Nigeria won the Euromoney Cash Management Award for “Best Domestic Cash Manager in Nigeria” for the 10th consecutive year. 2017 ANNUAL REPORT


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    26 Global Subsidiaries Group considerably dampened the stresses, others were more business environment. vulnerable. Citi worked closely with its clients to lower their Citi played quite a pivotal role in financial risks. Citi’s rich credit supporting clients’ needs during culture, advanced credit monitoring this crucial period, leveraging techniques and proactive screening its diversified foreign investor of the credit portfolio against key footprint and cross-border Trade stress factors, ensured that Citi Finance capacity. In particular, continued to maintain a healthy Citi deployed import and Foreign portfolio of credit clients, and Exchange solutions which enabled defend shareholder value. our clients secure the much needed Nneka Enwereji Executive Director and production inputs to remain in While credit availability generally Head of Global Subsidiaries business. The critical supply chain reduced in the market due to Group partners of Citi’s client base were cautious lending appetite in the also integrated into the bank’s trade bank market, Citi continued to solution suite. provide competitively priced loans Citi Nigeria’s Global Subsidiaries to clients in its target market. Citi’s Group (GSG) remains part of The Central Bank of Nigeria (CBN) scalable supply chain financing a global client coverage force, Foreign Exchange reforms in June solution further deepened Citi’s harnessing the power of Citi’s 2016 were laudable and provided reach, to provide financing options unparalleled global network and some of the much needed flexibility. to its clients’ supply chain. Where delivering seamlessly to our clients. In particular, the new Foreign some companies increased the The team framework is designed to Exchange policy enabled hedging number of their banking providers, mirror the clients’ organizational opportunities and the bank worked ostensibly to improve access to structure and continues to create with several clients to improve their Foreign Exchange, Citi’s multi- a unique alignment between the cost certainties. The ensuing naira banking technology platforms/ clients’ Treasury organizations devaluation increased Citi clients’ systems proved invaluable to and Citi’s network. Citi’s clients input costs, coupled with a change optimizing liquidity across banking value the depth of Citi’s offering, in the fuel price regime which led to system applications and enhancing universal systems, well-orchestrated a sharp increase in the pump price overall operating efficiency. global teams and extensive local of fuel. Also most market operators market knowledge. In the last year, had foreign currency liabilities, Citi remained key banking providers the bank’s clients with their global which resulted in exchange losses to strategic Industry segments. Treasury teams, especially relied on when the exchange rate moved Citi especially dominated the unique insights from the Citi team adversely. The CBN tightened wallets of a number of clients to interpret the rather dynamic and the monetary policy rate by during the year, on the strength challenging economic environment 200bps during the year to control of the bank’s product innovation in Nigeria, to support their business inflationary pressures and interest and dynamic response to clients’ sustainability. costs increased, further aggravating key business imperatives. Notably, business costs. Citi won landmark client mandates The year 2016 was quite historic in for Capital Raising and debt the Nigeria economic landscape, All of these cost escalations restructuring. with negative growth recorded for squeezed out business margins for four consecutive quarters and the most companies and inevitably led In Citi’s annual Client feedback country ultimately recording its to outright losses in several others. survey, most clients defined their first recession in over two decades. While some market operators had relationship with the Citi team Many factors were contributory but sufficient capacity and financial as Trusted Advisor relationships, severe Foreign Exchange shortages flexibility to withstand the market underscoring the strength of 2017 ANNUAL REPORT


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    27 our partnerships. The quality of Citi’s business, as Citi differentiated Citi’s client engagement was also itself as a trusted partner to its validated in the KPMG 2016 Banking esteemed client base. Industry Customer Satisfaction survey which for the third 2017 Outlook consecutive year voted Citibank The Nigeria economic growth Citi played quite a Nigeria as the Most Customer forecasts for 2017 signal some pivotal role in supporting Focused Bank in the wholesale growth, albeit marginal. This would clients’ needs during this banking category. be driven by higher or at least crucial period, leveraging more stable oil prices, continued its diversified foreign During the year, Citi continued containment of the Niger Delta investor footprint and to invest in its GSG team, which militancy and better traction on cross-border Trade remains fundamental to the economic policy implementation. Finance capacity. bank’s business aspirations. Foreign Exchange availability would Citi deployed various talent no doubt be a key enabler for the intervention programs, including anticipated growth momentum and training courses and short-term it is a good sign that the CBN have assignments with other businesses. significantly boosted market supply In-house partnerships were crucial in the first couple of months. to the bank’s achievements during the year and GSG collaborated very Citi’s continued insights on the effectively with the various product, business terrain, strong knowledge risk and control functions, to drive of our clients’ business dynamics, our business agenda. The bank’s strategic client partnerships, network connectivity remains a key innovative and proactive solutions advantage and Citi continued to should once again serve the optimally exploit this. bank well to steer the business to another record performance amidst Overall, while it was a tough year, the market uncertainties. it was a very accomplished one for 2017 ANNUAL REPORT


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    28 Direct Custody and Clearing timely execution and settlement of eligible transactions. The Nigerian Autonomous Foreign Exchange (NAFEX) fixing was also introduced. This is the reference rate for FX activities in the I&E FX window Citi organized a client representing the spot FX market rate in the window. seminar themed Charting Industry Progress in On the capital market front, there Nigeria, designed to was a notable resurgence in the bring together market equity market in 2017, especially regulators, participants following the commencement of the Aderonke Adetoro I&E FX window. According to the and other industry Securities Country Manager Nigerian Bureau of Statistics (NBS), experts to discuss and Foreign Portfolio Investment (FPI) explore the Nigerian remained the largest component of asset custody ecosystem capital importation into Nigeria in vis-à-vis global 2017 Overview the third quarter of 2017, at 67 per cent, with this component exhibiting developments 2017 began with quite some the highest growth of the three optimism against the recessionary capital importation categories (FPI, back drop of 2016. Gross Domestic Foreign Direct Investment (FDI) Product (GDP) turning positive and Other Investments) with a 200 in the second quarter of 2017 – per cent year-on-year growth. The Within Direct Custody and Clearing progressively increasing from -0.52 Nigerian Stock Exchange (NSE) (DCC), we continued to leverage per cent in quarter one to 0.72 per market capitalisation grew by about Citi’s custody-related technology cent in quarter two to 1.40 per cent 48.25 per cent on a year-to date platforms and broad knowledge in quarter three of 2017, with the basis as at 22 December 2017; a pool to support our domestic and economy steadily clawing its way reflection of increased investor foreign clients in 2017. Following the out of recession (2016 GDP -1.58 confidence and improved FPI flows FX policy changes in 2017, there was per cent). Foreign exchange (FX) into the Nigerian equities market. an increase in Assets under Custody reserves have continued to grow, The NSE All Share Index as at 22 (AUC) compared to 2016. The with a foreign reserve balance of December 2017 stood at 38,522.14; overall year-on-year AUC growth is USD 37.7 billion as at 21 December close to the year high of 39,534.14 68 per cent – with a growth of 62 2017. The FX reforms implemented set on 7 December 2017. A low of per cent for FPI clients and 73 per by the Central Bank of Nigeria 24,581.99 was seen on 6 March 2017 cent for domestic clients. New client (CBN) have supported the improved before the FX reforms began. mandates were won during the year, performance in the financial and incremental deals from existing markets. Fixed income yields on the other clients all led to a steady growth. hand, closed the fourth quarter In 2017, Citi organized a client A number of policies geared of the year at a low. At the final seminar themed Charting Industry towards the FX environment were primary T-Bill auction for the year, Progress in Nigeria, designed to implemented by the CBN in 2017. the 182 day T-Bill was issued at bring together market regulators, Some of these policies include the 15 per cent, compared with 17.50 participants and other industry establishment of the Investors’ and per cent during the first week of experts to discuss and explore the Exporters’ (I&E) FX Window which 2017. Yields on the 1 year note also Nigerian asset custody ecosystem took effect in April 2017; this was fell from 18.685 percent to 15.75 vis-à-vis global developments predicated on a willing buyer and percent. The benchmark 10 year while identifying opportunities for willing seller transaction execution, government bonds has decreased success transfer to help meet the with the aim of boosting liquidity by approximately 300 bps from needs of investors in the Nigerian in the FX market and ensuring the January 2017 levels. capital market sector. The seminar 2017 ANNUAL REPORT


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    29 also provided informative sessions (AACN) – to dematerialise the on the Nigerian economy and existing CCI process and provide capital market through various increased efficiency in the issuance, presentations from the Securities tracking and transfer of CCIs as well and Exchange Commission (SEC), as the launch of the fully SWIFT Central Securities and Clearing enabled system, TCS BaNCS, by the As a business, Citi will Systems PLC (CSCS), and NSE. The CSCS to improve efficiency in the continue to provide participants at the seminar were depository and settlement services from various sectors including provided by the CSCS. The CSCS global perspectives on Asset Management, Financial also issued a directive requiring best practices, working Services and Advisory and Legal all corporate and institutional closely with the market Services. investors to provide their Legal infrastructure and Entity Identifier (LEI) code which regulators, on improving Throughout 2017 Citi also hosted facilitates the identification of a number of FPI clients as part parties involved in any financial efficiency in the of their sub-custodian annual transaction – this takes effect on 1 Nigerian capital market. due diligence visits. Through January 2018. this medium, Citi provided the clients with in-depth discussions on the Nigerian economy, capital 2018 Outlook market developments as well as Citi’s custody service offering, Citi is optimistic about 2018, and in the Nigerian capital market. its strengths and differentiating expects GDP growth to continue its Simultaneously, Citi will continue factors. Some capital market recovery. Oil production and the FX to drive process automation and developments that occurred in reserves will remain stable, giving straight-through transaction 2017 include the market-wide foreign investors the confidence to process enhancements while also implementation of the Electronic put money into the Nigerian market. strengthening its risk management Certificate of Capital Importation As a business, Citi will continue framework and procedures. System (eCCIS) by the CBN, to provide global perspectives on Financial Markets Dealers best practices, working closely Association (FMDA) and Association with the market infrastructure and of Asset Custodians of Nigeria regulators, on improving efficiency 2017 ANNUAL REPORT


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    30 Operations and Technology recorded in 2017 are categorized overseas placements, job rotation and presented as follows: and mentoring. Value for Clients: In 2017, a number of talent Citi worked relentlessly to continue development programmes were to provide best in class value implemented. This includes added services that support the Operations Excellence client’s business offerings. In programme, for which 45% of O 2017, Citi reinvigorated the & T staff population have gone post-sale proactive client visits through the program. A manager and roundtables for improved development programme for engagement. Client events and employees transitioning into training opportunities were manager positions was initiated. also provided to enhance their The objective of the program is to Ngozi Omoke-Enyi understanding of the regulating arm the staff with requisite skills, Head of Operations and Technology environment, self service knowledge and competencies opportunities on Electronic Banking required for effective managerial and convey business opportunities role. A few staff attended the with potential benefits for both prestigious Inspiring Leadership, Citi and client. For instance, Citi Education and Development Citi’s Operations & Technology (O held a Cyber Security awareness (ILEAD) program established & T) in Nigeria maintains strategic campaign for key clients as well as to groom O&T future leaders. partnership within the bank and a client forum on Foreign Exchange During the course of the year, one with other support functions in the Forwards and Spot Trading. The staff got an overseas placement, development of value proposition Client Experience Week held in while a few geographically for its clients. O & T is continuously Q4 2017, presented yet another mobile staff got opportunity at the vanguard of improving its opportunity for clients to share for short term assignments at operations capability in a cost directly with us their perspective various Citi locations overseas. effective, flexible and controlled on the most important aspects Others benefited from mentoring manner. To enable Citi maintain its of service. These engagements programs, Technical and On-The-Job industry leadership, O & T provides translate to valuable positive client trainings as part of their identified the competitive differentiation on experiences. Individual Development Plans. The business capabilities enabled by the positive uplift from the independent use of advanced technology and/or During the KPMG Banking Industry Voice of Employee survey results digitized processes, risk controlled Customer Satisfaction Survey, is a testament of the success of environment and the best talents. clients rated Citi very highly people’s development programs in various attributes including during the year. In 2017, the competencies for O & Accuracy of Information, Proactive T were redefined by the following Communication and Knowledge of Technology: pillars of Operations Excellence: Bank’s Products and Services. This Technology continues to play a is reinforced by the quarterly wave significant role in supporting Citi’s Competitive Advantage surveys conducted independently at strategy for enhanced back office Productivity, Efficiency & Cost the regional level, where Citi Nigeria performance, risk management, Risk & Controls clients rated their satisfaction service offerings, growth strategy Culture & Organizational Health with our services at 85% average and success in general. quarterly. These pillars reinforced our In 2017, Citi continued the determination to drive value transformation of its technology proposition from client centric point People Development: architecture for improved service of view, thus refocusing the team on Citi is committed to talent delivery, effective performance key Operations Standards covering development for career growth and and to meet emerging challenges Client Centricity, Product Expertise, robust succession planning. Citi through the following key initiatives: Operational Efficiency and provides an array of development Continuous improvement; Policy opportunities for its employees Successful migration of the adherence; Control effectiveness, including classroom training, bank’s Continuity of Business Open commuication and global short term assignments at both infrastructure to an Uptime teamwork. The key achievements geographical and functional levels; Institute Certified Tier III 2017 ANNUAL REPORT


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    31 Facility; guaranteeing 99.982% There were significant monetary service availability. This move policy changes in 2017 which safeguards Citi from service resulted in intense regulatory disruptions and enhances reviews and adhoc inspections. service reliability. Citi was able to adapt to the Upgraded our platforms to changes based on increased control Technology continues support the implementation measures implemented by O & T. To of NIBSS Automated Payment proactively prepare employees with to play a significant Service (NAPS) and Nigeria tools and structures for combating role in supporting Citi’s Automated Clearing System potentially increasing Cyber threat, (NACS) to keep pace with the the bank leveraged on its global strategy for enhanced rapid changes in the payments resources and established Cyber back office performance, space in Nigeria. Security Fusion centres within Citi Retired and replaced the VSAT to conduct awareness training risk management, service network with fast and high- and table top exercises for Citi offerings, growth strategy capacity fibre links, greatly employees. improving customer experience and success in general. at the branches. The overall risk and control Embarked on branch server environment remained effective, consolidation and centralization safe and sound. This is supported by to optimize server hardware the satisfactory outcome of all the footprint, boost service reviews and inspections conducted Outlook for 2018: availability and reduce operating across Citi Nigeria branches in 2017. As the Nigerian economy continues costs. Significant to note that there was its recovery from recession and Deployed software solutions no successful operational fraud foreign exchange supply improves, to comply with regulatory recorded during the year despite business momentum will increase. requirements for Forex Purchase our size and branch network. The backlog of outstanding Notification Service and Industry settlements for import trades and Customer Account Database. Strategic Cost Management: other invisible payments will clear Supported Citi’s sustainability The initiatives undertaken by up. It is also expected that the goals of reducing environmental Citi for measuring and managing regulatory scrutiny of the banking impact. This was achieved by: expenses in 2017 aligned with the sector will not abate. • Partnering with pioneers overall business strategy. in e-waste management to O & T will continue to drive a effect eco-friendly disposal of Overall, expenses were maintained robust and effective risk and decommissioned technology at acceptable levels while cost control management program hardware and ensure secure saves were recorded through to address potential challenges, destruction of retired data strategic expense management ensure operational resiliency and storage media. initiatives such as retirement of provide competitive advantage in • Invested in installations that the in-country VSAT networks; the year ahead. Citi will also deepen reduced water consumption in implementation of new and cost- its infrastructural capabilities and the Head Office building effective Continuity of Business delivery models through innovation, • Installed energy saving (COB) international connectivity; optimization and Robotic Process lighting plus other energy server consolidation; back-up media Automation (RPA). The ongoing efficient equipment at the recycling; optimization of Citi’s focus on improving client branches branch network; renegotiation of experience as well as developing contracts (network links, premises people/talent will be sustained. Risk & Controls: leases, travels, etc.). O & T Citi has maintained a well-controlled continued to record saves through and managed risk and control prudent procurement processes environment, and continues to and smart approaches to overhead raise standards in order to stay cost management. ahead. The bank’s control program continues to evolve with new/ changing processes, products and service offerings. 2017 ANNUAL REPORT


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    32 Human Resources with increased responsibility within Citi. Some employees took up roles across other Citi businesses and geographies which provided them the opportunity to explore and opened up chances for employees internally to move to supervisory/ leadership roles with higher Citi remains resolute responsibilities. This resulted in in its commitment to a boost to our diversity initiative promote employees’ by giving us the opportunity to development and bring in suitable external talents providing challenging that further strengthened the Gboyega Oloyede bank’s market dominance. Our opportunities that Country Human Resources Officer employees continue to have equal ensure employees remain opportunities to compete for open sufficiently engaged positions. Nigeria continued to face strict regulatory scrutiny and economic Citi explored various opportunities was a huge success and offered the reforms that significantly impacted for personal and professional carefully selected participants a the banking industry in 2017. development of employees. There distinctive learning opportunity that were leadership development is long-lasting. Economic recession continued programs, regulatory trainings, with currency (Naira) devaluation core functional trainings, short- Diversity is an essential part of and inflation still at double-digit term assignments and On-the-Job Citi’s strategy and a key strength. high. These reduced significantly trainings across various businesses Citi’s workforce is as diverse as purchasing power and threatened and other Citi locations in diverse its client base, communities and profitability of most organizations. geographies. All these training the world it serves. Our diversity Measures were taken by the programs and initiatives continue to enables us deliver value to all second quarter to ameliorate enhance employees’ competencies stakeholders At Citi, we nurture the impact of devaluation and and capabilities. an innovative environment that inflation on employees. Citi as enables employees work effectively an entity persistently relied on Citi remains resolute in its as teams. Citi as a vibrant and high- its human capital in identifying commitment to promote performing bank is the best place and maximizing opportunities to employees’ development and to work. increase the overall profitability of providing challenging opportunities the Franchise despite all odds. that ensure employees remain Citi’s Annual Diversity Week sufficiently engaged and motivated celebration is an opportunity to Series of employee engagement to retain its position in Nigeria as reinforce diversity as our key initiatives were deployed to keep the premium haven for top talents strategy and core strength of Citi attrition rate in 2017 low while in the banking industry. to all its employees globally. The leveraging the global image in theme for 2017 was “It Takes All of resourcing Citi’s Undergraduate Internship Us” with focus on the importance of Program occurred in July 2017 and teamwork in building a successful In the course of the year, employees total of 18 students participate. diverse and inclusive organization. were provided developmental The purpose of the program is to Activities include Health, Fitness opportunities in line with create the necessary awareness & Wellness Awareness Campaign, their career aspirations and about Citi as an employer of choice Men’s Discourse, Kiddies Mentoring organizational goals. A number amid prospective talents and an (bring your child to work day) of employees were transferred to opportunity to them to experience and a glamorous cultural evening various departments both locally working at Citi while learning more which featured singing, cultural and abroad to assume new roles about our businesses. The program parade amongst others. Speakers 2017 ANNUAL REPORT


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    33 at the various events included Mr on breast cancer awareness, Yemi Cardoso, the Chairman of the prevention, treatment and Board of Directors Citibank Nigeria management. Citi employees also Limited, Mr Soni Irabor Chairman had the privilege of being screened of RUYI Communications Limited for breast cancer. and an award winning media icon, and Mr Ade Bakare renowned Citi maintained its tradition Fashion Designer. Mr Okundalaiye of recognizing and rewarding Ayodele, Senior Advocate of performance on a quarterly basis. Comedy (SACO) was on hand to Many awards were presented in the anchor the Diversity glam evening. year to deserving employees who It was indeed a celebration of Citi’s performed exceptionally well and diversity as employees, children and contributed to Citi’s success. non-employees all came together to showcase our Diversity. Voice of Employee (VOE) Pulse Survey measures employee Citi joined global celebrations satisfaction which has been on the to commemorate International increase and Citi will continue to Women’s Day (IWD). The 2017 explore innovative ways to improve theme was “It Takes All of Us”. on employee satisfaction. Activities included a presentation by Dr. Jack Mbom who delivered a Citi remains an equal opportunity presentation on Corporate Wellness employer and is committed to as it relates to high performance being an employer of choice even and productivity at the workplace. as it continues to build on its accomplishments. Citi, in collaboration with Care Organization Public Enlightenment (C.O.P.E), commemorated Breast Cancer Awareness Month. C.O.P.E IS an NGO dedicated to reducing mortality rate due to breast cancer, delivered the annual lecture At Citi, we nurture an innovative environment that enables employees work effectively as teams 2017 ANNUAL REPORT


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    34 Markets to $/N360 in the I&E window and with overnight rates at an average the parallel market. In addition to of 30% throughout the year. the new window, the CBN continued its wholesale and retail auctions to 2017 was a remarkable year for corporates as well as interventions Citi as the policy changes provided to the retail invisible sector and opportunities for the Markets small and medium enterprises business. The Markets team was (SME). proactive and provided structured solutions to help clients navigate There were a number of fiscal the FX challenges. Our position as developments by the Finance the gateway bank for investors with Ministry during the year to better interest in the Nigeria economy manage the Nation’s debt profile. enabled us to facilitate some of the Bayo Adeyemo In a bid to reduce its high costs of major FDI transactions in 2017. Country Treasurer and domestic borrowings, the Federal Head of Markets Government decided to restructure Citi expects that the positive its debt portfolio by replacing a economic developments portion of its domestic debts with encountered by the country in cheaper foreign borrowings. This 2017 will continue into 2018 as we For Nigeria, 2017 can be termed in addition to funding its budget envisage that the extension of the a recovery year starting from the deficit resulted in the issuance OPEC cuts will keep oil prices high Nation’s exit from recession with a of $4.5 billion Eurobond in 3 enough for reserves accretion, 0.72% YoY GDP growth in Q2, 2017 tranches, all of which were largely effectively resulting in a stable after 5 consecutive quarters of oversubscribed; with the 30 years foreign currency environment. We contraction. The growth was driven maturity issued at 7.625%. To are however cautious that pre- by increasing global oil prices, diversify and increase its investor election spending could lead to the which was supported by extended base, the Debt Management Office CBN tightening monetary policy OPEC production cuts and declining (DMO) introduced the FGN savings in the second half of the year. Citi U.S. output. In addition to strong bond and a 7-year Sovereign Sukuk. expects the monetary authority to oil prices, the nation’s output also The savings bond was targeted at continue its focus on achievement grew to 2mbpd as there were very the retail segment, while the Sukuk, of price and exchange rate stability little disruptions in the oil producing an Islamic instrument was targeted in 2018. region. The disparity in the growth at funding some priority projects. rate between the oil and non-oil The Eurobond issuance contributed Citi as always is well prepared and sector is however an indication to the Nation’s upward trending positioned to leverage on our global that Nigeria’s economy remain external reserves, which closed the and local economic knowledge to vulnerable to volatility in the global year at approximately $39 billion, a create opportunities and provide oil industry. 50% increase from last year’s close solutions to our diverse client base. of $25.8 billion. The financial market started with the Central Bank of Nigeria The monetary policy tools were (CBN) maintaining a quasi-pegged held constant for the year with the exchange rate regime and most of benchmark Monetary Policy Rate the FX flow coming from the CBN (MPR) at 14% and the Cash Reserve auctions. This, however, turned Ratio CRR at 22.5%. From the start around following the introduction of of the year, the monetary policy Our position as the the Investors’ and Exporters (I&E) authority was focused on fighting window on April 25, 2017. The freely inflationary pressures which had gateway bank for floating rates resulted in improved closed 2016 at a high of 18.6%. To investors with interest investor confidence and liquidity control the inflationary pressure in the Nigeria economy in the FX market. The decision to and maintain FX stability, the CBN kept the money market tight for enabled us to facilitate introduce the I&E window eased the pressure on the currency and most of the year through Open some of the major FDI saw a significant appreciation of Market Operations (OMO). The transactions in 2017. the Naira in the parallel market liquidity in the interbank market resulting in a convergence of rates was very tight for most of the year 2017 ANNUAL REPORT


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    35 2017 Employee of the Year Mabel is a perfect model of our “be the best” initiative as well as the impact of our leadership standards on client satisfaction and ultimately, revenues. Mabel Itambo Trade Services Professional, Operations Department Mabel works in the Trade inquiries, energy, credibility of Her contribution on several Operations Department as a Trade advice and depth of knowledge of initiatives contributed immensely Services Professional (TSP) where trade operations . She has earned to improve the turnaround time she supports some of the bank’s a reputation as the trusted advisor and the quality of metrics used top trade revenue clients; Procter & for trade related enquiries both with for measuring performance and Gamble Nigeria Ltd, Nestle Nigeria clients and colleagues. identifying areas of opportunity. Ltd, Nigeria Bottling Company The simplification of tracking (bottlers of Coca Cola), Chi Limited Also worthy of note is Mabel’s system for capturing and analysing and Parco Group account. Trade proactive approach to initiating enquiries resulted in a remarkable revenue recorded a 30% increase daily calls to customers. This increase in number of enquiries in 2017 with significant contribution has enabled the team to prevent being captured as well as the from increased share of wallet from financial losses, reduce customer timely resolution of the issues. She many but mostly Mabel’s clients. complaints and generally manage was instrumental to redesigning While many factors contributed emerging issues in a very customer Trade reports that have to this revenue growth, we see a professional and proactive manner, enabled customers to plan and direct impact of the improvement which has now become a reference achieve efficiencies in their trade in service quality provided by the point in the team. cycle. Trade Service Professional Team of which Mabel played a very A very good team player, she is Notwithstanding being the recipient prominent role. always ready and willing to take of 2016 employee of the year award, up new challenges. Her wealth she has not slowed down in her Mabel is a perfect model of our of experience, sound product quest to making Citibank the “best “be the best” initiative as well knowledge and “can-do” attitude for our customers”. In appreciation as the impact of our leadership have all played important roles in of her consistent exceptional standards on client satisfaction shaping her ability to dimension contributions to the franchise, and ultimately, revenues. Over the and simplify the complex regulatory Mabel Itambo is the EMPLOYEE OF years, she has delivered stellar landscape to the benefits of the THE YEAR 2017. services to our client in a terrain of bank and delight of our customers. multiplicity of regulations, constant Her ability to do these consistently macro-economic changes, changing easily sets her apart. She has internal policies and processes. earned the respect of her peers and Clients have proactively described colleagues and is highly regarded as her consistent positive attitude, a role model. timely responses to customer 2017 ANNUAL REPORT


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  • Page 39

    Financial Report Directors’ report 39 Corporate Governance report 50 Board Performance Review 56 Statement of Directors’ Responsibility 57 Independent Auditor’s report 58 Consolidated & Separate Statement of Profit or Loss 63 Consolidated & Separate Statement of Comprehensive Income 64 Consolidated & Separate Statement of Financial Position 65 Consolidated & Separate Statement of Changes in Equity 66 Consolidated & Separate Statement of Cash Flows 68 Statement of significant accounting policies 70 Notes to the Financial Statements 70 Financial risk management 89 Statement of value added 153 Consolidated & Separate five year financial summary 155


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    38 Directors, Officers and Advisors DIRECTORS Mr. Olayemi Cardoso Chairman Mr. Akinsowon Dawodu Managing Director Mr. Fatai Karim Executive Director Mrs. Funmi Ogunlesi Executive Director Mrs. Nneka Enwereji Executive Director Mr. Chinedu Ikwudinma (Resigned September 6, 2017) Executive Director Mr. Oluwole Awotundun (Appointed Oct. 5, 2017; CBN Approval Dec. 19, 2017) Executive Director Mr. Phillip Cullingworth (Resigned February 24, 2017) Non Executive Director Mr. Oyesoji Oyeleke (Appointed Feb. 23, 2017; CBN Approval April 7, 2017) Non Executive Director Mr. Peter McCarthy Non Executive Director Dr. Hilary Onyiuke Non Executive Director Ms. Diane Evans (Appointed Feb. 23, 2017; CBN Approval Oct. 9, 2017) Non Executive Director Mrs. Ireti Samuel-Ogbu Non Executive Director Dr. Shamsuddeen Usman (Appointed March 24, 2017; CBN Approval April 12, 2017) Independent Director Dr. Daphne Dafinone Independent Director Mrs. Olusola Fagbure Company Secretary CORPORATE HEAD OFFICE Citibank Nigeria Limited Charles S. Sankey House 27, Kofo Abayomi Street Victoria Island, Lagos. Telephone: +234 01 2798400 +234 01 4638400 Website: www.citigroup.com/nigeria AUDITORS PricewaterhouseCoopers Landmark Towers, 5B Water Corporation Road Victoria Island, Lagos Telephone: +234 (1) 271 1700 Website: www.pwc.com/ng Engagement Partner: Patrick Obianwa FRC no.:FRC/2013/ICAN/00000000880 2017 ANNUAL REPORT


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    39 Directors’ Report FOR THE YEAR ENDED 31 DECEMBER 2017 The Directors have pleasure in presenting their annual report on the affairs of Citibank Nigeria Limited and its subsidiary entity (“the Group”) together with the financial statements and auditors’ report for the year ended 31 December 2017. LEGAL FORM The Bank was incorporated in Nigeria under the Companies and Allied Matter Act as a private limited liability company on 2 May 1984. It was granted a license on 14 September 1984 to carry on the business of commercial banking and commenced business on 14 September 1984. PRINCIPAL ACTIVITY AND BUSINESS REVIEW The principal activity of the Group is the provision of commercial banking services to its customers. Such services include transactional services, corporate finance, provision of finance, custodial business and money market and trading activities. The Bank has a subsidiary, Nigeria International Bank Nominees Limited. The company acts as the holder of securities purchased for customers of the Bank’s custodial business. OPERATING RESULTS The net operating income and profit before tax of the Group increased by 26.95% and 27.10% respectively over prior year. The directors recommend the approval of a final dividend of N27,452,710,688 (N9.83k per share) (2016:N21,704,297,219 (N7.77k per share) from the outstanding balance in the retained earnings account as at 31 December 2017. The dividends are subject to deduction of withholding tax of 10%. Highlights of the Group’s operating results for the year under review are as follows 2017 2016 % change N’000 N’000 Net operating Income 57,644,906 45,406,905 26.95% Profit before tax 41,013,134 32,267,427 27.10% Taxation (9,043,937) (6,893,620) 31.19% Profit for the year 31,969,197 25,373,807 25.99% Other comprehensive income for the year, net of tax 6,562,441 (3,898,226) -268.34% Total comprehensive income for the year 38,531,638 21,475,581 79.42% 2017 ANNUAL REPORT


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    40 Directors’ Report DIRECTORS’ SHAREHOLDING The following directors of the Bank held office during the year and had direct and indirect interests in the issued share capital of the Bank as recorded in the register of directors’ shareholding and/or as notified by the directors for the purposes of sections 275 and 276 of the Companies and Allied Matters Act 2004, as noted below: Direct Shareholding Director Position Date of appointment/ Number of Number of resignation in 2017 Ordinary Shares Ordinary Shares held in 2017 held in 2016 1 Mr. Olayemi Cardoso Chairman - - 2 Mr. Akinsowon Dawodu Managing Director - - 3 Mrs. Funmi Ogunlesi Executive Director - - 4 Mr. Fatai Karim Executive Director - - 5 Mrs. Nneka Enwereji Executive Director - - 6 Mr. Chinedu Ikwudinma Executive Director Resigned - September 6, 2017 - - 7 Mr. Oluwole Awotundun Executive Director Appointed - October 5, 2017; CBN Approval December 19, 2017 - - 8 Mrs. Ireti Samuel-Ogbu Non Executive Director - - 9 Dr. Hilary Onyiuke Non Executive Director - - 10 Mr. Philip Cullingworth (South African) Non Executive Director Resigned - February 24, 2017 - - 11 Mr. Peter McCarthy (British) Non Executive Director - - 12 Ms. Diane Evans (South African) Non Executive Director Appointed - February 23, 2017, CBN Approval October 9, 2017 - - 13 Mr. Oyesoji Oyeleke, SAN Non Executive Director Appointed - February 23, 2017, CBN Approval April 7, 2017 - - 14 Dr. Shamsuddeen Usman Independent Director Appointed - March 24, 2017, CBN Approval April 12, 2017 - - 15 Dr. Daphne Dafinone Independent Director - - Dr. Hilary Onyiuke has an indirect shareholding through Gauthier Investments Ltd which has a shareholding of 33,445,769 ordinary shares. Mr. Olayemi Cardoso has an indirect shareholding through the Estate of F.B. Cardoso which has a shareholding of 30,775,755 ordinary shares. Mr. Oyeleke has an indirect shareholding through Bola Holdings Ltd which has a shareholding of 24,768,892 ordinary shares. Since the last Annual General Meeting, Mr. Philip Cullingworth, and Mr. Chinedu Ikwudinma resigned from the Board while Mr. Oyesoji Oyeleke, SAN, Dr. Shamsuddeen Usman, Ms. Diane Evans and Mr. Oluwole Awotundun were appointed to the Board. The Directors to retire by rotation at the next Annual General Meeting (AGM) are Mrs. Nneka Enwereji, Mr. Peter McCarthy, and Dr. Daphne Dafinone. 2017 ANNUAL REPORT


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    41 Directors’ Report PROFILE OF DIRECTORS OF CITIBANK NIGERIA LTD S/N NAME BRIEF PROFILE 1 MR. YEMI CARDOSO Mr. Cardoso holds a degree in Finance and Accounting from Aston University (1980), UK and a postgraduate degree in Public Administration and Management from the Kennedy School of Government, Harvard University. He was a Mason Fellow of the Kennedy School of Government. He is also an Associate of the Chartered Institute of Stock Brokers. He worked for Citi in several countries between 1981 and 1990. He left Citi in 1990 to become an Executive Director in Citizens International Bank. Between 1999 and 2004, Mr. Cardoso served as the Lagos State Commissioner for Economic Planning and Budget. He has been on the board of the Bank since April 2010. He was appointed Chairman of the Board of Directors of the Bank in November 2010 Mr. Cardoso has served on the board of directors of several companies including Chevron Oil Plc. He is presently the only African elected board member at the Harvard Kennedy school alumni governing body and consults on financial and developmental activities. Mr. Cardoso was awarded an honorary Doctorate degree from Aston university in 2017. He is in his sixties. 2 MR. AKINSOWON DAWODU Mr. Akinsowon Dawodu holds a B.Sc. degree in Accounting from the University of Lagos. He also holds an MBA (1997) from the Manchester Business School. He became a Chartered Financial Analyst in 2004. He has worked in Citi since 2000. Between 2005 and 2007 he served as Senior Treasury Manager for MTN Communications Nigeria Ltd. In Citi he has served as Country Treasurer, and Chief Operating Officer and Public Sector Head. He was appointed to the Board in 2013 and was appointed Managing Director in 2015. He is in his forties. 3 MRS. FUNMI OGUNLESI Mrs. Ogunlesi holds degrees in History and Law from Leicester University (1981) and Cambridge University (1985) as well as a Master’s in Business Administration from Judge Institute of Management, Cambridge University (1996). Mrs. Ogunlesi also holds a Masters degree in Law from Kings College, Cambridge University (1989). She joined the Bank in 1997 and has served in several roles including Managing Director of Citibank Gabon. She is currently the Africa Division TTS Public Sector Head. She was appointed to the Board in 2007. She is in her fifties. 4 MR. FATAI KARIM Mr. Karim is a graduate of Accounting from Bayero University, Kano. He also holds an MBA from the Enugu State University of Technology. Mr. Karim who is in his fifties, joined Citibank Nigeria in 1987. Over the years, he has held various positions of responsibilities in different countries covering Human Resources Management, Operations & Technology, Risk & Control, and Vendor Management. Between 2000 and 2004, Mr. Karim was General Manager and Executive Director, Citibank Tanzania. Between 2004 and June 2009, he was General Manager, Citibank London with responsibilities for Operational Risk and Control Management. Mr. Fatai Karim was appointed Executive Director Citibank Nigeria Limited in May 2009. 5 DR. HILARY ONYIUKE Dr. Onyiuke holds an MB, B.S. degree from the College of Medicine, University of Ibadan (1982). He is a fellow of The Royal College of Surgeons of Canada, and a member of the American board of Neurosurgeons. He is also Director, Comprehensive Spine Center and Administrative Head of Spine Program at the University of Connecticut School of Medicine. Dr. Onyiuke became an Associate Professor, Neurosurgery Division, University of Connecticut School of Medicine in 2001. He was appointed to the Board of the Bank in June 2010. Dr. Onyiuke is in his fifties. 6 MRS. NNEKA ENWEREJI Mrs. Nneka Enwereji is a 1991 first class graduate of Computer Science and Economics (Combined Honours) from the Obafemi Awolowo University. She also holds a Master in Business Administration from Warwick Business School, United Kingdom (2011). She has over 25 years banking experience covering Capital Market, FMCG, Financial Institutions Products, Credit Management and Top Tier Local Corporates management where she has worked in various capacities. She joined the Bank in 1992 as a Youth Corps member. She was appointed Head, Bank Services Group & Africa Trade Services Head in 2010 and became Head, Global Subsidiaries Group and Top Tier Local Corporates in 2011. She was appointed to the Board of the Bank in June 2014. Mrs. Enwereji is in her forties. 2017 ANNUAL REPORT


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    42 Directors’ Report PROFILE OF DIRECTORS OF CITIBANK NIGERIA LTD (contd.) S/N NAME BRIEF PROFILE 7 MRS. IRETI SAMUEL-OGBU Mrs. Ireti Samuel-Ogbu holds a Bachelor degree in Accounting & Finance from Middlesex University (1984). She also obtained a Masters degree in Business Administration from the University of Bradford (1987). She is a seasoned banker with over thirty years banking experience. She joined the Bank in 1988 as Unit Head, Commercial Bank. Mrs. Samuel-Ogbu has worked in various capacities in Citibank offices in Lagos, Johannesburg and London. She was appointed Resident Vice President, Trade Co-ordinator, Corporate Finance in Citi London in 1995. In January 2013, she became the Team Captain and Public Sector Lead for a selection of EMEA names in Citi London. Mrs. Samuel-Ogbu was appointed to the Board of the Bank in June 2014. She is in her fifties. 8 MR. PETER MCCARTHY Mr. McCarthy qualified as a Chartered Accountant in 1981. He has over 30 years of experience in the Financial Services industry. Shortly before joining Citigroup in 1987 as Head of Management Accounting within the Finance Division in London, Mr. McCarthy was the European Financial Controller, Merrill Lynch. He has held various positions of responsibility in Fixed Income, Currencies and Commodities, and Technology. Prior to his current role of EMEA Chief Administrative Officer, (Europe, Middle East and Africa), Mr. McCarthy was EMEA Chief Administrative Officer for the Markets Business responsible for the Operating infrastructure and Franchise Governance for the Institutional Sales and Trading business (Fixed Income, Foreign Exchange, Commodities and Equities) across EMEA. Mr. McCarthy who is in his sixties was appointed to the Board in April 2016. 9 DR. DAPHNE TERRI DAFINONE Dr. Daphne Terri Dafinone is the Chief Operating Officer of Howarth Dafinone & Co, Chartered Accountants. She holds a B. A. (Hons) Economics from Victoria University of Manchester, Manchester, UK (1987), and M.Sc. (Internal Audit & Management) and PhD (internal Audit & Corporate Governance) from City University, London. She is a Fellow, Institute of Chartered Accountants in England and Wales, Associate Member, Chartered Taxation Institute of Nigeria, and a Fellow, Institute of Chartered Accountants of Nigeria. She is in her early fifties. She worked with KPMG, Chartered Accountants, London from 1987 to 1990 and Horwath Dafinone, Chartered Accountants, Lagos from January 1990 to date. She became a partner in the firm in March 1997, and was appointed the Chief Operating Officer of the firm in January 2013. Dr. Dafinone was appointed to the Board in June 2016. 10 MR. OYESOJI OYELEKE SAN Mr. Oyesoji Oyeleke, SAN is the Managing Partner of Law Offices of O.G. Oyeleke LLP, a firm of Barristers & Solicitors, and a Notary Public. He is a 1982 graduate of law from the Obafemi Awolowo University, Ile Ife. Mr. Oyeleke possesses extensive experience in all forms of commercial Litigation, including shipping and maritime related matters and is a member of various professional bodies including the Nigerian Bar Association; Institute of Chartered Secretaries and Administrators; Commercial League of America; International Association of Restructuring Insolvency and Bankruptcy Professionals among others. He was appointed a Notary Public in 1991 and a Senior Advocate of Nigeria (SAN) in 2016. He was appointed to the Board of Citibank Nigeria in April 2017. Mr. Oyeleke is in his fifties. 11 DR. SHAMSUDDEEN USMAN Dr. Shamsuddeen Usman is the Chairman/CEO of Susman & Associates Ltd. He holds a Ph.D in Economics from London School of Economics and Political Science, University of London (LSE), UK (1980). Dr. Usman has over 40 years professional experience in both the Public and Private sectors of the Economy. He has served as the Hon. Minister of Finance and Hon. Minister of National Planning. He was also a Deputy Governor, Central Bank of Nigeria and Managing Director, NAL Merchant Bank, as well as the Director-General, Technical Committee on Privatisation and Commercialisation (TCPC); Executive Director, United Bank for Africa; Executive Director, Union Bank of Nigeria Plc; and Director of Budget/Special Economic Adviser to the Kano State Government. Dr. Usman who is in his sixties also sits on the board of Lafarge Africa Plc. He was appointed to the Board of Citibank Nigeria in April 2017. 2017 ANNUAL REPORT


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    43 Directors’ Report PROFILE OF DIRECTORS OF CITIBANK NIGERIA LTD (contd.) S/N NAME BRIEF PROFILE 12 MS. DIANE EVANS Ms. Diane Evans holds a Bachelor’s degree in Commerce from the University of South Africa and a Master of Business Leadership (MBA) from the same university. Diane has worked in various capacities in Citi covering Risk Analysis, Credit Analysis, Corporate Finance, Public Sector Banking, and Products Marketing. She was appointed Corporate Bank Head of Citibank South Africa, in 2012. She became the Regional Credit Head, Sub-Saharan Africa, Institutional Client Group in November 2015. Diane was appointed to the Board of the Bank in October 2017. She is in her fifties. 13 MR. OLUWOLE AWOTUNDUN Mr. Awotundun is a 1993 graduate of Mechanical Engineering from the University of Ilorin and also holds an MBA from the University of Lagos. (1999). Mr. Awotundun also holds the International Certificate of Banking Risks & Regulations (ICBRR) Professionals. He joined the Bank in 1995 as a Credit Operations Assistant. Mr. Awotundun has worked in various Risk Management, Credit Administration and Portfolio Management capacities covering a number of African countries. He was appointed Regional Country Risk Manager – West & Central Africa in June 2014. Mr. Awotundun became Country Risk Manager and Risk SCO for Nigeria & Ghana in September 2017. He was appointed to the Board of the Bank in December 2017. Mr. Awotundun is in his forties. PROPERTY, PLANT AND EQUIPMENT Information relating to changes in property, plant and equipment is given in Note 25 of the financial statements. SHAREHOLDING ANALYSIS The shareholding pattern of the Bank as at 31 December 2017 is as stated below: Share Range No of Percentage of No. of Percentage Shareholders Holdings Holdings 500,001 – 1,000,000 1 4% 950,011 0.03% 1,000,001 – 5,000,000 - - - 0.00% 5,000,001 – 10,000,000 4 16% 28,579,722 1.02% 10,000,001 – 50,000,000 18 72% 415,642,155 14.88% 50,000,001 – 100,000,000 1 4% 60,416,666 2.16% 100,000,001 – 500,000,000 - - - 0.00% 500,000,001 – 1,000,000,000 - - - 0.00% Foreign Shareholders Above 1,000,000,000 1 4% 2,288,188,675 81.90% TOTAL 25 100% 2,793,777,229 100% SUBSTANTIAL INTEREST IN SHARES According to the register of members as at 31 December 2017, no shareholder held more than 5% of the issued share capital of the Bank, except the following: Shareholder No. of shares held Percentage of shareholding Citibank Overseas Investment Corporation 2,288,188,675 81.90% 2017 ANNUAL REPORT


  • Page 46

    44 Directors’ Report DIRECTORS Directors’ remuneration was paid as follows: 2017 2016 N’000 N’000 Fees and sitting allowances 67,375 60,300 Executive compensation 236,584 202,574 Executive pension cost 15,589 14,676 Total 319,549 277,550 DONATIONS AND CHARITABLE GIFTS The Group mde contributions to charitable and non-polotical organisations amounting to N19,915,660.00 (2016 N16,706,000) during theyear as analyzed below: Citibank Nigeria Limited Donations N’000 1. Bema Homes for the less Privileged 400 2. Arrow of God Orphanage 500 3. De Marillac Centre, Port Harcourt 400 4. Green Pasture and Home Initiative 500 5. Ngwa Road Motherless Babies Home (Aba) 400 6. Right Steps Incorporated 400 7. Rosali Home Rehabilitation Centre ( Eleme, PH ) 400 8. St. Anne’s Orphanage - Warri 400 9. Down Syndrome Association of Nigeria 500 10. Atunda Olu School (For Physically Handicapped Children) 750 11. Bethesda Child Support Agency 2,010 12. The Book Trust 400 13. Wesley School 1 for the deaf 500 14. Wesley School 2 for the deaf 500 15. Pacelli School for the blind 500 16. National Orthopaedic Special School ( Igbobi) 500 17. Care Organization Public Enlightenment(COPE) 500 18. Medical Missionaries of Mary Hospital (Lugbe) 400 19. Sickle Cell Foundation 500 20. Heart of Gold Children’s Hospice 1,000 21. Nigerian Red Cross Society 500 22. SOS Children’s Village 500 23. Women in Successful Careers (WISCAR) 1,000 24. Women in Management Business & Public Service (WIMBIZ) 1,500 25. Leprosy Centre Uzoakoli 300 26. Government College Secondary School Victoria Island 3,356 27. Child Life Line 700 28. Port Harcourt Children’s Home, Borokiri - PH 300 29. Obioma Cheshire Home ( Borokiri - PH) 300 N19,916 2017 ANNUAL REPORT


  • Page 47

    45 Directors’ Report POST BALANCE SHEET EVENTS There were no post balance sheet events which could have a material effect on the financial position of the Group as at 31 December 2017 or the statement of profit and loss and other comprehensive income for the year ended on that date that have not been adequately provided for or disclosed. EMPLOYMENT OF DISABLED PERSONS The Group continues to maintain a policy of giving fair consideration to application for employment made by disabled persons with due regard to their abilities and aptitudes. The Group’s policies prohibit discrimination against disabled persons in the recruitment, training and career development of employees. In the event of members of staff becoming disabled, efforts will be made to ensure that their employment within the Group continues and appropriate training arranged to ensure that they fit into the Group’s working environment. HEALTH, SAFETY AND WELFARE AT WORK The Group enforces strict health and safety rules and practices at the work environment, which are reviewed and tested regularly. In addition, medical facilities are provided for staff and their immediate families at the Group’s expense. Fire prevention and fire-fighting equipment are installed in strategic locations within the Group’s premises. The Group operates both Group Personal Accident and Workmen’s Compensation Insurance cover for the benefit of its employees. It is also fully compliant with the provisions of the Employee Compensation Act. The Group also operates a contributory pension plan in line with the Pension Reform Act, 2014. EMPLOYEE INVOLVEMENT AND TRAINING The Group ensures, through various fora, that employees are informed on matters concerning them. Formal and informal channels are also employed in communication with employees with an appropriate two-way feedback mechanism. In accordance with the Group’s policy of continuous development, the Group draws extensively on Citigroup’s training programmes around the world. The programmes include on the job training, classroom sessions and web-based training programmes which are available to all staff. In addition, employees of the Group are nominated to attend both locally and internationally organized courses. DIVERSITY IN EMPLOYMENT The Group recognises that the recruitment, involvement and advancement of women and a diverse workforce are business imperatives. During the financial year ended 31 December 2017: - There were 83 women out of 235 employees comprising 35.32% of the total number of employees; - There were 5 women out of 13 Directors on the Board of Directors; - There were 31 women out of 99 top management staff, including executive directors - There were 29 women out of 94 top management staff between Assistant General Manager to General Manager grade; - There were 2 women out of 5 top management staff between Executive Director to Chief Executive Officer; - The bank had no persons with disabilities in its employment. The Group is committed to maintaining a positive work environment and to conducting business in a positive, professional manner by consistently ensuring equal employment opportunity. The Group has programs aimed at achieving gender balance which include developmental programs targeted for women; mentoring; and policies that support Work-Life balance. 2017 ANNUAL REPORT


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    46 Directors’ Report CONSUMER HELP DESK Citi has a robust complaint management and feedback process, the object of which is to ensure that our clients are satisfied with our products and services at all times. All client communication channels e.g. phone calls, emails, letters etc. are monitored and tracked to ensure that satisfactory service quality is maintained consistently. Also all queries are registered and monitored to resolution in line with pre- established service level standards. 85% of client enquiries were resolved within 24 hours. We value our clients’ feedback, and as such, we carry out frequent surveys to gauge their satisfaction with our products and services. All feedback received through this forum is treated on a priority basis and required adjustment made accordingly. Citi complies with all the Central Bank of Nigeria’s (CBN) guidelines on Customer Complaints Handling. We have established a consumer complaints help desk to handle all categories of customer complaints and provide a monthly report to the CBN in line with the guideline on customer complaint resolution. The status of consumer complaints received in 2017 vs 2016 is presented below: S/N NUMBER AMOUNT CLAIMED AMOUNT CLAIMED 2017 2016 2017 2016 2017 2016 1 Pending complaints B/F 1 - 9,578,802 - 139,012 - 2 Received complaints 8 3 27,818,569 10,306,504 16,631,970 727,702 3 Resolved complaints 9 2 37,397,371 727,702 16,770,982 727,702 4 Unresolved complaints - - - - - - 5 Unresolved complaints pending - 1 - - - - with the bank C/F GUIDELINES ON ELECTRONIC PAYMENT OF SALARIES, PENSIONS, SUPPLIERS AND TAXES IN NIGERIA The Group has implemented the requirements in the guideline of e-payment of salaries, pensions, suppliers and taxes in Nigeria. All forms of salaries, pensions, suppliers and taxes payment were initiated on our secure internet banking platform, CitiDirect, during the financial year ended 31 December, 2017. Guidelines On Card Issuance & Usage In Nigeria During the financial year ended 31 December, 2017, the summary of activities relating to cards are as contained in the table below: Item Description Values Card Type Citi Commercial Card (A corporate charge card) Transaction Volume 114,071 Transaction Value N3,133,759,926 Fraud Incidents as at December 2017: Unsuccessful Partially Successful Partially Successful Count Value (NGN) Count Value (NGN) Fraud Loss (NGN) Count Value (NGN) 8 1,670,950 2 651,279 357,620 3 749,663 During the year, there were total of 12 card fraud incidents and 1 robbery incident reported. The total value involved amounted to N3,106,893. Of the 12 incidents, 5 resulted into actual losses totalling N1,107,283. There were no incidents reported in the months of March, July, August and November. 2017 ANNUAL REPORT


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    47 Directors’ Report CONTINGENCY PLANNING FRAMEWORK OVERVIEW Citibank Nigeria Limited implements a Contingency Planning Framework (business continuity) which aligns with Citigroup’s global business continuity framework The business continuity program includes: Business Continuity Assessment processes Crisis Management Planning Recovery Planning Testing; Maintenance Independent Review Monitoring and Reporting Training and Awareness Citigroup has a global Continuity of Business (CoB) Program Operations organization which is responsible for developing and managing the enterprise-wide CoB policy, standards, tools, and guidance. Citibank Nigeria Limited also uses a software tool called CoB Trac to support CoB assessment, planning, and testing and provide evidence of compliance. GOVERNANCE Citibank Nigeria Limited has a crisis management team which has the responsibility of managing crisis events. This team is chaired by the Citi Country Officer (CCO). In addition, each business unit is required to designate at least one Business Recovery Coordinator (BRC) and one Business Unit Head (BUH) to manage the CoB program in their business unit. The activities of all the BRCs are coordinated by the Country CoB Coordinated who is appointed by CCO. ASSESSMENT All business units in Citibank Nigeria Limited perform a Business Impact Analysis (BIA) on an annual basis. The purpose is to define the processes and timeframes required for recovery. Threat and Vulnerability Analysis and Proximity Risk Assessments are also performed for all in-scope locations, as defined in the CoB standards. External third parties’ resilience and recovery capabilities are also assessed and monitored. CRISIS MANAGEMENT Citibank Nigeria Limited also develops and maintains an enhanced country crisis management plan which provides a framework for managing Crisis. The country crisis management plans include the evacuation plans for each location in the Bank. The Crisis Management team have the responsibility for managing crisis in the Bank. PLANNING Business units and technology units in the bank are required to document and maintain plans for the recovery of their processes in the event of a business interruption or technology service disruption. Application Managers are required to create and maintain an Application Recovery Plan (ARP) for each Citibank-owned or Citibank–managed application to which they are assigned in the Citi Systems Inventory. For each Infrastructure component, Technology Managers from Citi Technology Infrastructure (CTI) must create and maintain a Technology Recovery Plan (TRP). ARPs and TRPs must contain the appropriate actions to be taken during the recovery and resumption of services. 2017 ANNUAL REPORT


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    48 Directors’ Report TESTING Citibank Nigeria Limited performs business and technology tests in order to verify that processes can be recovered in line with the business’s continuity objectives, as defined by the Business Impact Analysis process. Business Recovery Coordinators are responsible for ensuring that test objectives are met. Business recovery teams, crisis management teams, infrastructure teams, and application teams must participate in CoB testing, as appropriate. MAINTENANCE CoB documentation, including policy, standards, as well as recovery and crisis management plans are reviewed and approved at least annually and refreshed more frequently as needed. Specific maintenance triggers for CoB documentation are documented in the Bank’s CoB standards document. Call trees must be refreshed at least semi-annually. QUALITY REVIEW Quality reviews must be conducted on a regular basis as required by the Bank’s CoB Standards document. MONITORING AND REPORTING The Country CoB coordinator provides quarterly Business Continuity updates to the Audit Committee of the Citibank Nigeria board. Citibank Nigeria Limited’s CoB Program undergo independent review by Internal Audit. TRAINING The business recovery coordinators for all business units are required to take at least one CoB training annually. This training is tracked by the office of business continuity. Also, CoB training is included in the new hire induction program. Compensation Policy Citibank Nigeria has a compensation plan which is fair, transparent, and consistent. We have a Pay for Performance culture to enable us attract and retain people of the highest quality. Our Total Compensation package is designed to retain and motivate people to constantly exceed their goal; differentiate between levels of performance and thus increasing the total compensation available to the employees based on performance. Our Compensation policy is linked to: - The performance of the Organization as a whole - The performance of the Country/business/teams in which our people work - The individual performance of each employee - The ability to pay for the total compensation programme To remain competitive as an employer of choice, Citibank regularly benchmarks its compensation practices with the market through participation in remuneration surveys. Overall individual salary decisions are taken on the basis of assessment of performance against measurable goals and targets, which is fair, consistent and explainable. Each year, individual goals and targets are set in line with the overall plan for the business in the country. At the end of the year, a formal meeting takes place between the employee and the manager to discuss achievements against goals. Citibank Nigeria Limited’s goal is to recognize the contribution of people and reward their successes. We will know that our compensation program is working well when we are able to attract, retain and motivate staff who give us competitive advantage in our chosen markets; when our people believe that they are recognized, valued and their compensation is determined by performance and competitive market positioning. The better the employee’s performance the better the total compensation. 2017 ANNUAL REPORT

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