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H1 2014 results show Infinity Trust Mortgage Bank outperforms peers

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The half year (H1) 2014 results of quoted firms in the Real Estate and Mortgage industry showed Infinity Trust Mortgage Bank plc (ITMB), a company that just got listed on the floor of the Nigerian Stock Exchange outperforming peers.

Our analysis is centres on these three firms: Union Holmes Saving and Loans plc, Abbey Building Bank plc and Infinity Trust Mortgage Trust plc.

On the bases of efficiency, Infinity was leader with a net margin of 38.65 percent while its bottomline performance was superb, having grown profits by 77 percent and revenue spiked by 57 percent (See table one).

This firm has been unrelentingly recording impressive performance since its listing in 2013, and if it continues to on this growth trajectory, ITMB may emerge a real giant in the near future.

Abbey’s revenue dropped by 61 percent in the review period while profits fell by 60 percent as it was not able to overcome the environment challenges besetting firms operating in Africa most populous nation, Nigeria.

Union Holmes is the laggards as far as this quarter is concerned, as it seems the bank was not able to control costs that spiralled out of control as operating expense ratio was as high as 105 percent, thus bleeding profits.

The ripple effects of ballooning interest expense resulted in a loss of it recorded a loss of N773.78 million, a situation that calls urgent restructuring.

Challenges facing the sector

One of the major impediments crimping the growth of mortgage business in Nigeria is the lack of legal framework.

For instance, it takes a very long period of time to get a defaulting borrower to pay rent through the legal process, as court cases drag for as much as three to five years or more. Consequently, mortgagers and real estate agents have a lot of liabilities in the balance sheets due to unpaid rents by tenants who take advantage of a porous legal system to the detriment of real estate operators.

Another reason Nigeria real estate lags behind peers such as UAE, Australia and South Africa, in terms of contribution to the economy, is the difficulty in the registration of properties.

In the just rebased GDP, where Nigeria leapfrogged South Africa as the largest economy, the real estate contributed 2.20 percent to the total economy of N80.22 trillion.


The opportunities are immense in the Nigerian economy as the rising middle-class that crave for accommodation is spiking combined with rapid urbanisation driving the sector.

In our opinion, Infinity Trust Mortgage Bank is the only quoted firm in country at the moment tapping into the above opportunities.

Article Credit: Businessdayonline

Updated 4 Years ago

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