TrustBond Mortgage beats analysts’ expectations amid economic headwinds
TrustBond Mortgage Bank, one of Nigeria’s few primary mortgage banks (PMBs) operating with national licence, has beaten analysts expectations with its 2017 financial year results which, in the estimation of its shareholders, is a good and commendable outing.
Though there was relative stability in 2017 compared to the year before it in terms of the impact of recession on macro-economic environment, analysts’ expectation was a dismal performance by the organised private sector operators, especially those in the financial system for whom hyper inflation and volatile exchange rate regime meant so much.
Again, a pervading perception is that the mortgage industry in Nigeria is under-performing. To some people, Nigeria has no mortgage industry at all and so they do not expect anything wonderful from that industry in terms of performance, more so in a recessing economy.
But at their 9th Annual General Meeting in Lagos recently, TrustBond excited its shareholders, disclosing that during their financial year that ended December 31, 2017, their profit after tax from continuing operation rose about 13 percent to N23,443 million, up from N18,016 million in the previous year.
Adeniyi Akinlusi, the bank’s CEO, who gave this hint, added that despite the economic headwinds that characterized the year under review, particularly the high inflationary environment, the bank was able to reduce its cost-to-income ratio to 0.64, down from 0.89 in 2016. It also recorded total assets of N13, 593 billion in December 2017, representing 9 percent increase over the previous year’s figure of N12,411 billion.
Akinlusi told the bank’s shareholders that besides some business restructuring and the adoption of a new one that they did which yielded these results, they also undertook what he called ‘Share Reconstruction’, leading to the reduction of an accumulated loss to N886 million in their balance sheet, down from N2,177 billion.
The shareholders were excited by this performance and, according to Sunny Nwosu, a shareholder and member of the audit committee, “this shows that the management worked very hard and followed our advice. They were advised not to do certain things and they followed the advice. That caught shareholders’ admiration and they were happy”.
Though there was no dividend pay-out, the shareholders were happy and optimistic. Binuyo Sharafa Teju, another shareholder, reasoned that for the management to have been able to reduce the bank’s debt burden to N886 million from N2,177 billion, in the next three years, they would wiped it out and be able to pay dividend.
“From what we have seen today, I want to believe that by the time we will be doing 2018 account, they shall have wiped off the debt, creating avenue for dividend payment”, he said, adding that compared to other mortgage banks in the same market, Trustbond had done pretty well and was well ahead.
Akinlusi assured of a better performance in their 2018 results, saying, “in 2018, we will place greater emphasis on growing our mortgage business volume, while impacting positively on our environment by working with other stakeholders to improve home ownership for Nigerians”.
Etigwe Uwa, the chairman of the bank, shared this optimism even though he acknowledged that mortgage sector’s 1 percent contribution to GDP remained dismal considering its huge prospects.
He noted that there have been interventions by the government, through programmes and policies, to increase mortgage finance and promote home ownership in Nigeria, citing the ‘My Own Home Scheme’ which is a public private partnership that seeks to increase access to housing finance in Nigeria through mortgages, mortgage guarantee/insurance and housing micro-finance.
He recalled that in 2017, the federal ministry of finance and the Nigerian Sovereign Investment Authority (NSIA) also created the Family Homes Fund (FHF)and voted N1 trillion for affordable housing for Nigerians with potential capacity to generate up to 1.5 percent increase in GDP by 2023.
Uwa declared that the outlook for the bank for 2018 financial year was positive, considering the relative stability experienced in the last quarter of 2017, the improved macro-economic indices, improving business climate and economic growth.
“With government’s renewed interest in prioritizing affordable housing, particularly for the low-income earners, the potentials in the mortgage market continue to increase while we are positioned to impact positively on the mortgage space; we will continue to seek and implement systems and processes to enhance efficient service delivery, achieve cost optimization and strengthen risk management system”, he assured.
CHUKA UROKO