Abbey Mortgage Bank Plc Affirms Need For Recapitalisation

Abbey Mortgage Bank Plc has announced that it's worried about the high non-performing loans in the mortgage industry.

This announcement was revealed by Mobolaji Adewunmi, the Director of the Bank, on Thursday during its 'Facts Behind the Figures' presentation at the Nigerian Exchange Limited.

He said,

• For mortgage banks, the NPLs are quite high. In 2020, when VFD Group invested in Abbey, NPL was around 75%, and if you look across most mortgage banks, you will see high NPLs.

• The regulatory minimum for mortgage banks is 20%, but it becomes a worry when you start seeing figures like 25-30%.

• According to the last review, we are already at 8%, far below what you will get from most mortgage banks.

He also assured investors and other stakeholders that the bank is prepared to surpass the minimum capital requirements set by the Central Bank of Nigeria.

Adewunmi revealed that the mortgage bank could raise N3bn and was well capitalised above CBN requirements.

He said, 

• The CBN has said that the banks would have to recapitalise, and we expect this will affect not just the commercial banks but also the microfinance and mortgage banks.

• Abbey is already working towards that to ensure that we are above whatever the minimum capital requirement is at every point in time. The last capital raise was in 2020, where we raised circa N3bn.

• As it is, Abbey is far above the minimum capital requirement for mortgage banks, which is stated at N5bn, but we are committed irrespective of what the new benchmark will be. Abbey will once again prove itself as a market leader and ensure we meet that capital requirement.

He also assured the public that the company would meet the free-float requirement of the NGX. Adewunmi stated that the bank released about 602 million units of shares to the public last year.

He added,

• We remain committed to ensuring that the entire plan is met before the deadline of 2025. One thing that is clear in our shareholding structure is that the free float percentage moved from 7.22 per cent to 13.1 per cent by the end of 2023.

• The figure will be much higher than that by the time we come back here, and by 2025, we will have full compliance.

Abbey Mortgage Bank finished trading on Thursday on the NGX at N2.99 per unit.