VFD Microfinance Bank, a digitally-driven financial institution, has successfully reversed its financial fortunes, reporting a N366.6 million profit after tax for the 2024 financial year. This marks a significant turnaround from the N333 million loss the bank incurred in the preceding year, 2023.
The positive financial results were unveiled at the bank's third Annual General Meeting (AGM) held on Thursday, themed ‘Banking with Purpose, Delivering with Impact’. The AGM served as a platform for the board and management to address stakeholders regarding the bank's performance amidst a challenging economic landscape.
The leadership of VFD Microfinance Bank acknowledged the formidable macroeconomic headwinds that defined 2023, including soaring inflation rates, currency depreciation, and a sluggish Gross Domestic Product (GDP) growth. These factors collectively posed significant challenges to the financial services sector, impacting the bank's bottom line and resulting in the reported loss. However, the management emphasized that this period of adversity proved to be a crucial turning point, prompting strategic recalibrations that ultimately paved the way for the strong recovery witnessed in 2024.
Addressing shareholders at the AGM, Board Chairman Collins Chikeluba stated, "The year under review was one of unprecedented macroeconomic and operational challenges. While the loss in 2023 was disappointing, it reflects both the external constraints and the internal adjustments we undertook. Importantly, our 2024 audited financials reflect a positive turnaround, with significant revenue growth and a return to profitability. We are laying a solid foundation for sustainable profitability and future dividend payouts, driven by our focus on deepening financial inclusion and leveraging technology."
Echoing this sentiment, Managing Director/Chief Executive Officer Rotimi Awofisibe commented, "The year 2023 was a testing period, but it sharpened our strategic clarity and operational discipline. Despite the recorded loss, we took decisive steps to reposition the bank, and the indicators from our 2024 performance, including a 39.8% revenue growth and a profit of N366.6 million, demonstrate the effectiveness of these actions. We remain focused on enhancing our digital footprint, scaling our customer base, and maintaining financial discipline to deliver long-term value to all our stakeholders."
The audited results further revealed a substantial 39.8 percent increase in revenue, rising from N3.2 billion in 2023 to N4.5 billion in 2024. This significant growth underscores the success of the strategic adjustments implemented by the bank in response to the previous year's challenges.
At the AGM, VFD Microfinance Bank reiterated its unwavering commitment to its core strategic objectives: deepening financial inclusion through innovative digital solutions, providing tailored financial solutions for Small and Medium-sized Enterprises (SMEs), and fostering enhanced customer engagement. The bank also highlighted the strengthening of its risk management framework and the cultivation of strategic partnerships aimed at expanding its operational reach and improving the overall quality of its service delivery.
Chief Operating Officer Theodore Asamoah elaborated on the operational improvements, stating, "Our team has worked diligently to optimise our operations and enhance efficiency. The significant revenue growth and return to profitability in 2024 are a testament to our collective efforts and the resilience of our business model. We remain committed to leveraging technology and innovation to improve our service delivery and expand our reach, ensuring we continue to deliver with impact."
While no dividend was declared for the 2024 financial year, VFD Microfinance Bank conveyed its strong optimism regarding its future financial prospects and its capacity for sustained value creation for its stakeholders. The return to profitability after a challenging period signals the potential for future dividend payouts as the bank continues to execute its strategic objectives and navigate the evolving economic landscape.