We developed retail and wholesale products to increase market penetration – Abbey Mortgage Bank

Article Summary

• The bank’s wholesale business segment made significant traction, particularly with the financial institutions with the launch of Abbey Secured Structured Note.
• In FY 2022, the company had gross earnings of N5.84 billion, a 58.7% growth from N3.68 billion in 2021.
• The bank is poised to stay on course towards delivering comparable financial and strategic performance for the current year and beyond.

Abbey Mortgage Bank Plc has said that it developed retail and wholesale products to increase market penetration and drive optimal balance sheets.

The Managing Director of the Bank, Mr Bolaji Adewunmi, stated this at the company’s 31st Annual General Meeting (AGM) held in Lagos.

Significant traction

Adewunmi noted that the bank’s wholesale business segment made significant traction, particularly with the financial institutions with the launch of Abbey Secured Structured Note.

• “The Note allowed us to raise over N2.67 billion collateralized liabilities, which we have fully settled. While this contributed to our earnings ratio, more importantly, it served as a platform to differentiate our bank from the market. 
• Our retail-focused campaign also grew with circa N1.7 billion new deposits raised, as we navigate a changing interest rate environment.   
• While we know that our approach to risk management could result in a lag between deposit growth and risk asset creation, we believe it is important that our balance sheet remains efficient. 
• We have continued to enhance our treasury function to take advantage of market opportunities, and we will continue to review our product pricing and offers to be cost-effective,” he said.

Financial performance

Adewunmi stated that the company’s financial performance has sustained its strategic vision as it achieved several new records in multiple parameters.

• “In FY 2022, the company had gross earnings of N5.84 billion, a 58.7% growth from N3.68 billion in 2021. Operating income grew by 46.01%, from N2.18 billion in 2021 to N3.18 billion. 
• This culminated in a pre-tax profit of N827 million, a 25.14% raise from the N2021 position of N661 million. 
• We grew customer deposits by 29.8%, increasing from N21.3 billion in 2021 to N27.6 billion. The growth in deposits is in tandem with our rising perception and status across the industry and reinforces customers’ confidence in the bank.
• Total Assets grew by 15.6% closing at N39.9 billion from N34.5 billion in 2021. While our loans and advances declined by 16.25% from N6.1 billion in 2021 to N5.1 billion. However, investments grew by 13.1% from N1.8 billion in 2021 to N4.2 billion. 
• The decline in our loan book is the near-term impact of our delinquent asset clean-up exercise and our long-term approach toward risk management. 
• As a result of our earnings performance, shareholders’ funds grew by 11% from N6.9 billion in 2021 to N7.6 billion,” he said.

Outlook

The Chairman of the company, Mazi Emmanuel Kanu IVI while addressing shareholders at the meeting said that notwithstanding the dire economic outlook, the bank is poised to stay on course towards delivering comparable financial and strategic performance for the current year and beyond.

• “We believe two critical themes will define the future of the homes in the next 3-5 years, and we want to lay the foundation to position our bank at the fore of that from now.
• As the world continues to define sustainability goals, there has been an increased call for environment-friendly home-building processes and materials, as well as dedicated funds to help drive this goal.
• As with sustainability, the limit of technology has been stretched. This includes the infrastructure to build homes, for example, 3D printing machines, and the functionality of built homes, for example, smart homes.
• I believe the next 12 to 18 months would be critical for identifying partners in the real estate value chain, committed to similar objectives while we develop a road map for raising and deploying needed capital for this objective,” Kanu said.  

What the shareholders said

Some of the shareholders who spoke at the meeting described the performance of the company as commendable despite the myriad of challenges confronting the business.

One of the shareholders, Mr William Adebayo, applauded the board and management of the company for managing the business effectively, as reflected in the improved performance in profit and revenue recorded by the company for the 2022 financial year.

• “The company’s financial performance for the 2022 financial year was good. Abbey Mortgage Bank Plc has done well, especially with the economic hardship we are facing and the low purchasing power of consumers. It shows that the company saved for the rainy day,” Adebayo said. 

Also speaking, another shareholder – Mr Adeleke Oladimeji lauded the company’s management for its financial performance despite the challenging macroeconomic outlook.

He hailed the current leadership for demonstrating the immense capacity to drive the company to greater heights with some of the bold decisions taken in the course of the 2022 financial year.

• “I would like to express deep appreciation to the board and management of Nigerian Breweries Plc for showing great leadership in managing the business amidst challenges. I would like to commend everyone, including the staff, for their contribution that has resulted in a good performance for the company. I am confident that this year would also benefit the company,” he said.

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