The housing sector plays a critical role in a country’s welfare than always recognized, as it directly affects not only the well-being of the citizenry, but also the performance of other sectors of the economy.
Adequate housing provision has, for many years, engaged the attention of most countries. However, despite various efforts, a major area of concern has been housing financing, which has often been fingered as one of the most formidable constraints in the housing sector.
The focus on finance has, however, been very prominent for obvious reasons. This is because housing provision requires huge capital outlay, which is often beyond the capacity of the medium income/ low income groups.
Limited access to housing and mortgage financing, complications in enforcing mortgage contracts and foreclosure on properties in Nigerian courts, slow bureaucratic procedures in land administration and high cost of land registration has continued to pose serious impediments to adequate housing delivery in Nigeria.
Market watchers also identified high rate of population growth, high rate of rural-urban migration and exorbitant cost of construction materials as other problems militating against the robust development of housing and mortgage sectors in the country.
High foreign exchange content of imported building materials such as cement, tiles, ceramic wares etc have also made housing non-affordable for the average and low income earners, hence affecting the profit margin of the mortgage companies.
Following the challenges facing mortgage sectors in the country, Infinity Trust Mortgage Bank’s (ITMB) Plc’s earnings have spiked in the last three quarters of 2020 as mortgage lenders and property dealers in Africa’s most populous nation continue to grapple with an economic downturn.
However, the company had, from the full year 2020, sustained profits with good numbers, which, according to market watchers, is attributed to the bank’s strategic focus of growing the balance sheet and diversifying the bank’s income base. When the closing bell rang on Friday, the company’s share price stood at N1.32 per share.
Infinity Trust Mortgage Bank Plc was incorporated on January 28, 2002, as Infinity Trust Savings & Loans Limited. However, it commenced business operations in Abuja, in 2003. As part of its strategic turn-around, the bank was converted to a Public Limited Liability Company on January 25, 2013 and had to change its name to Infinity Trust Mortgage Bank Plc.
In 2014, it became a National Mortgage Bank. Currently, the bank has equity shareholding in the Nigeria Mortgage Refinance Company (NMRC). Following the conversion of the company to a public limited liability company on January 25, 2013, the company’s shares were listed on the floor of the NGX on 11th December 2013.
Infinity Trust Mortgage Bank (ITMB) Plc began 2020 financial year with 26.49 per cent decline in profit after tax to N90.973 million for the first quarter ended March 31, 2020 from N123.765 million in 2019. Profit before tax stood at N95.761 million in 2020 from N134.527 million reported in 2019, representing a drop of 28.82 per cent while turnover declined by 8.33 per cent to close at N316.168 million from N344.900 million in 2019.
The mortgage bank reported a 28.81 per cent drop in profit after tax for the half year ended June 30, 2020. The bank’s unaudited accounts in a filing with the Nigerian Exchange Limited (NGX) showed a profit after tax of N150.530 million for the half year 2020 as against N211.458 million reported in 2019, representing a decline of 28.81 per cent.
Profit before tax equally stood at N160.138 million from N224.955 million in 2019, accounting for a drop of 28.81 per cent. Turnover dropped by 12.87 per cent from N667.695 million to N587.762 million in 2020. ITMB reported a 5.51 per cent drop in profit after tax for the third quarter ended September 30, 2020.
The bank’s unaudited accounts in a filing with the Nigerian Exchange Limited (NGX) showed a profit after tax of N277.280 million for the third quarter 2020 as against N293.456 million reported in 2019, representing a decline of 5.51 per cent. Profit before tax equally stood at N291.874 million from N308.901 million in 2019, accounting equally for a drop of 5.51 per cent.
Turnover dropped by 9.36 per cent from N993.856 million to N900.803 million in 2020. ITMB said its loan portfolio increased by 33 per cent to N7.12 billion in 2020, compared to the N5.34 billion it realised in 2019.
The bank’s audited figures shows profit before tax increased to N465.06 million from N444.38 million in 2019. The total operating expenses dropped by 15 per cent from N740 million in 2019 to N625 million in 2020.
ITMB’s bank’s customer deposits increased significantly by 94.5 per cent from NI.94 billion in 2019 to N3.77 billion in 2020 due to its spirited customer engagement strategy. On-lending and refinancing activities also witnessed a growth of 22 per cent from N2.19 billion to N2.68 billion.
Total assets grew by 25 per cent from N10.64 billion in 2019 to N13.34 billion in 2020, while shareholders’ funds grew by four percent from N6.20 billion in 2019 to N6.44 billion in 2020. ITMB posted 59.68 per cent growth in profit after for the first quarter ended March 31, 2021.
The company’s financial report for the period showed profit after tax of N145.27 million as against N90.97 million reported in 2020, representing a 59 per cent growth.
Profit before tax equally grew by N152.92 million from N95.76 million in in 2020, accounting for a growth of 59.68 per cent. Turnover grew by 21.13 per cent to N382.96 million in 2021 from N316.17 million in 2020.
Infinity Trust Mortgage Bank (ITMB) posted a profit after tax of N300.101 million for the half year ended June 30, 2021. The profit represents 99 per cent growth over N150.530 million reported in 2020. The company’s financial report for the period showed profit before tax of N319.547 million as against N160.138 million reported in 2020, representing a 99.54 per cent growth.
Turnover grew by 35 per cent to N785.476 million in 2021 from N581.762 million in 2020. ITMB posted a profit after tax of N447.069 million for the nine month ended September 30, 2021. The profit represents 52.34 per cent growth over N293.456 million reported in 2020.
The company’s financial report for the period showed profit before tax of N483.094 million as against N308.901 million reported in 2020, representing a 56.39 per cent growth.
Turnover grew by 24.26 per cent to N1.235 billion in 2021 from N993.856 million in 2020.
The mortgage firm reported N552.520 million for the 12 months ended December 31, 2021, a 34.39 per cent increase from N411.113 million in 2020. Profit before tax stood at N596.428 million in 2021, a 28.24 pe cent growth over N465.065 million posted in 2020.
Turnover grew by 28.59 per cent to N1.691 billion from N1.315 billion in 2020.
Addressing shareholders and stakeholders at its 15th Annual General Meeting (AGM) held virtually, the Chairman of the Board of Directors, Dr. Adeyinka Bibilari, said the bank achieved impressive financial results despite the challenges of coronavirus. He commended the board of directors and the management for their collective effort towards the achievement of the bank.
“The positive performance is attributed to the bank’s strategic focus of growing the balance sheet and diversifying the bank’s income base. This was underpinned by a robust risk management framework, strengthening of the internal control along with good technological framework and innovation in internal operations and processes,” he said.
He assured the shareholders that the bank would implement holistic growth initiatives to improve market standing and optimise the business.
The board approved the appointment of two Non-Executive Directors, Mrs. Abisola Obaleye, Mrs Nkechi Bibilari, and an Executive Director, Mr. Sunday Olumorin.
The shareholders appreciated the board and management for the financial performance of the bank during this challenging environment, while expressing their satisfaction for declaring such a dividend for the year, which is one of the highest among similar sized mortgage banks in Nigeria.
Managing Director and Chief Executive Officer, Dr. Olabanjo Obaleye, in his reaction to the bank’s performance in 2020, stated: “I am proud that in addition to successfully navigating all of the challenges of operating in a pandemic environment, we achieved improvements creating shelter and wealth in profitability.” He maintained that the bank was committed to investing in the business and maintaining consistent profitability trend.
He added: “The robust performance of 2020 enabled the bank to steadily increase its profitability and dividend distribution for the year. We are committed to continuing our efforts to generate valuable returns to shareholders.”
Obaleye emphasised that the bank would continue to position itself to attract average income earners who desire to buy a house through efficient mortgage delivery, while maintaining competitive interest rates amid varying tenors.
The Nigerian housing sector today faces some challenges that must be tackled to make the system provide the required services that will accelerate economic development witnessed in other emerging economies.