Abbey Building net income surges 166.43% in Q3
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IMAGE: Abbey Building Society plc »
One of Nigeria’s mortgage giants, Abbey Building Society plc, third quarter (Q3) profit surged by 166.43 percent as the bank continues to work towards making Nigerians home owners.
The bank that has been giving headroom to low-income earners, through its market driven products, has impressively recorded growth at both the top- and bottom-line level.
For the first nine months through September 2014, the company’s gross earnings rose by 3.91 percent to N1.16 billion, from N1.12 billion the same of the corresponding year (Q3) 2013.
Abbey’s net income spiked by 166.43 percent to N86.31 million in Q3 2014, from N32.40 million at Q3 2013, as it grapples with high costs.
Cost-to-income ratio, a measure of efficiency, remained flattish at 80.32 percent in the review period, as analysts say the figure is on the high side. Operating expenses were up by 4.87 percent to N681.21 million in Q3 2014, compared with N649.47 million as of Q3 2013.
Abbey’s total assets were down by 3.26 percent to N13.84 billion compared with N14.24 billion as of Q3 2013, while shareholders fund reduced by 6.20 percent to N6.80 billion from N 7.25 billion at Q3 2013.
Loans and advances were up by 6.98 percent to N7.11 billion in Q3 2014, as against N6.65 billion as of Q3 2013.
Abbey can tap into the rising Nigeria middle-class that crave for accommodation to bolster performance and increase its share of the market.
However, the Nigerian real estate and mortgage sector face challenges such as delay in recognising mortgage banks by the Central Bank of Nigeria (CBN). Analysts say the CBN should carry out reforms in the mortgage sector that will increase the industry contribution to the Nigerian economy.
Nigeria’s real estate contribution to the GDP still lags behind some countries like UAE, Australia, and South Africa.
In the just rebased GDP, where Nigeria leapfrogged South Africa as the largest African economy, the real estate contributed 2.20 percent to the total economy of N80.22 trillion.
Abbey is aggressive about the provision of affordable housing for Nigerians, as the real estate bank recently partnered estate developers and relevant government agencies, such as Fri Invest Sector Limited of Tunisia to invest in the equity of the Abbey to the tune of 1.25 million Euro, convertible loans in April 2008. The bank’s share price closed at N1.30 on the floor of the NSE, while market capitalisation was N5.46 billion.
Article Credit: Businessdayonline