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Abbey Mortgage Bank Plc, one of the listed firm in the Nigeria Stock Exchange (NSE) recorded loss for the Full Year ended December 31, 2017. This is the second consecutive year the Mortgage Bank recorded a loss after it reported profit in 2015.
It reported loss after tax expense of N212.3 million for the year 2017. This was 44.4 million or 26 percent increase of loss when compared to the reported loss of N167.9 million recorded in the fiscal year 2016, as compiled from company’s financial statement.
The Mortgage Bank’s recurring losses can be traced to its low operating income compared to a high operating expense.
The Mortgage bank’s operating income for the year 2017 was up N919.2 million, an increase of about N44.7 million when compared toN874.5 million recorded in 2016, however, its operating expense was N929.1 million in the year under review, compared to a lower operating expense in the previous year at N907.1 million.
Analysis by BusinessDay shows that the Mortgage bank’s low revenue could be as a result of low patronage from Nigerians, meaning not many people go to take mortgage loans from the bank. This is evident in the interest income.
A breakdown of the financial report revealed a record of N1.2 billion as interest income in 2017 compared to its N960.8 million recorded in the financial year 2016. Its interest expense for the year under review was N490.7 million compared to N344.4 million recorded in the previous year
This brought the net interest income to N764.9 million in 2017 as against N616.4 million net interest incomes reported in comparable period of 2016.
Experts in the mortgage industry also linked the bank’s performance to lack of general liquidity, short term deposits for long term funds, and accumulated non-performing loans which are running into billions in the sector.
Abbey Mortgage Bank however, recorded N 177.9 million losses before taxation in contrast to N134.4 million recorded in the previous year.
Meanwhile, the bank acquired total assets worth N12.2 billion. This is slightly below the N12.4billion assets it acquired in the previous year.
Its total liabilities for the year remained almost the same as that of 2016 at N6.0 billion.
Experts in the sector stressed that the Nigeria Mortgage Refinance Company (NMRC) seems to have failed in its mandate to raise long-term funds from the domestic and foreign capital market, as it public purpose is in developing the primary and secondary mortgage markets.
Although, the fact that the real estate sector was still in recession could not be ignored when BusinessDay spoke to analysts about the performance of the Mortgage Banks in the country.
Growth in the Mortgage industry is seen to be at a slow pace. Aside the difficulty of low liquidity in the sector, the problem of Nigerians not earning enough income to qualify them to take up a mortgage is another setback witnessed in the sector.
Analyst advised the inclusion of the informal sector into the mortgage industry in order for them to breakthrough, as the larger market are in the informal sector.
Abbey Mortgage Bank is one of the seven national Primary Mortgage Banks (PMB) licensed by the Central Bank of Nigeria and Federal Mortgage Bank of Nigeria (FMBN). The recent recapitalization exercise saw the down size from 105 mortgage banks to only 34 now surviving.
Abbey Mortgage Bank Plc focuses on providing economical housing units for interested home seekers, developers and cooperatives who desire a well-structured mortgage offer.
Endurance Okafor
