Abbey Mortgage Bank Plc, one of Nigeria’s leading mortgage financing institutions, has reported an impressive 40% year-on-year (YoY) growth in net profit, reaching ₦1.22 billion for the full year 2024. The strong financial performance was fueled by robust loan growth, higher interest income, and improved cost efficiency, despite Nigeria’s challenging macroeconomic environment.
The company also saw significant growth across key financial metrics, solidifying its position in the mortgage banking sector.
Key Financial Highlights (2024 vs. 2023)
- Gross Earnings: ₦12.4 billion (2023: ₦9.5 billion) ↑31%
- Net Interest Income: ₦4.8 billion (2023: ₦3.5 billion) ↑37%
- Profit Before Tax (PBT): ₦1.45 billion (2023: ₦1.02 billion) ↑42%
- Net Profit: ₦1.22 billion (2023: ₦870 million) ↑40%
- Total Assets: ₦85.3 billion (2023: ₦72.8 billion) ↑17%
- Total Deposits: ₦50.6 billion (2023: ₦42.3 billion) ↑20%
- Loan Book: ₦41.9 billion (2023: ₦35.6 billion) ↑18%
- Earnings Per Share (EPS): ₦0.52 (2023: ₦0.37) ↑41%
Abbey Mortgage Bank’s earnings and profitability ratios continued to improve as the bank leveraged growing demand for mortgage financing in Nigeria’s evolving real estate sector.
Revenue Growth & Interest Income
Abbey Mortgage Bank recorded a 31% increase in gross earnings to ₦12.4 billion, largely driven by:
- Higher mortgage loan disbursements: The bank expanded its lending portfolio, increasing the number of homeownership loans and developer financing.
- Rising interest income: Net interest income surged 37% to ₦4.8 billion, benefiting from Nigeria’s higher interest rate environment (CBN’s Monetary Policy Rate at 27.5%).
- Expansion in fee-based income: Abbey Mortgage Bank also boosted its non-interest income through mortgage advisory services and real estate partnerships.
Cost Management & Profitability
Despite rising inflation, Abbey Mortgage Bank effectively managed its cost-to-income ratio, ensuring strong bottom-line growth:
- Cost-to-income ratio improved to 58% (2023: 62%), reflecting operational efficiency.
- Administrative expenses rose moderately to ₦3.1 billion, up 18% YoY, controlled through digitization and branch optimization.
- Impairment charges on loans remained stable, as the bank maintained strong asset quality and risk management.
The result was a 42% increase in PBT, reaching ₦1.45 billion, while net profit climbed 40% YoY to ₦1.22 billion.
Balance Sheet Strength & Deposits Growth
Abbey Mortgage Bank significantly expanded its balance sheet, reflecting healthy deposit inflows and loan growth:
- Total assets grew 17% YoY to ₦85.3 billion, supporting future expansion.
- Customer deposits rose 20% to ₦50.6 billion, demonstrating strong depositor confidence.
- Loans and advances increased 18%, highlighting strong demand for mortgage financing.
- Liquidity and capital adequacy ratios remained strong, ensuring regulatory compliance and operational stability.
Dividend Declaration & Shareholder Returns
The bank’s strong earnings growth prompted its Board of Directors to declare a dividend for 2024.
- Dividend per share (DPS): ₦0.15 (2023: ₦0.12) ↑25%
- Dividend payout ratio: 29%
Abbey Mortgage Bank’s decision to increase dividend payouts underscores its commitment to rewarding shareholderswhile balancing capital retention for growth.
Macroeconomic Factors & Industry Trends
Abbey Mortgage Bank’s performance occurred against the backdrop of Nigeria’s evolving economic landscape:
- Inflation at 34.8% (December 2024) drove up borrowing costs, but also increased demand for real estate as a hedge against inflation.
- CBN’s high interest rate (27.5%) made mortgage financing more expensive, yet Abbey’s competitive pricing strategy kept loan demand strong.
- Foreign exchange volatility, with the naira trading at ₦1,533 per USD, impacted real estate development costs but also attracted foreign investments into Nigeria’s housing market.
- Government support for housing development helped boost mortgage demand, with policy interventions increasing access to affordable home financing.
Strategic Initiatives & Future Outlook
Looking ahead, Abbey Mortgage Bank is well-positioned for sustainable growth, with strategic priorities including:
1. Digital Transformation & Expansion
- Investment in digital banking platforms to enhance mortgage application processing.
- Expansion of fintech partnerships for seamless home loan disbursement.
2. Increased Mortgage Loan Offerings
- Targeting mid-income earners through affordable mortgage plans.
- Growing partnerships with real estate developers to provide structured financing.
3. Strengthening Risk Management
- Enhancing credit risk controls to maintain low non-performing loan (NPL) levels.
- Further diversification of funding sources to reduce dependency on interest rate-sensitive deposits.
Conclusion
Abbey Mortgage Bank’s strong financial performance in 2024 demonstrates its resilience and growth potential. The bank effectively navigated macroeconomic headwinds, expanded its loan book, and improved operational efficiency.
With solid asset growth, increasing profitability, and a rising dividend payout, Abbey is well-positioned to capitalize on Nigeria’s growing housing sector in the years ahead.
