Infinity Trust Mortgage Bank plc, a company that deals in lending lines of credit, started the year on an impressive note with growth spurt buoyed by rapid urbanisation and increased demand for housing.
The company was also able to translate top-line performance into bottom-line growth, suggesting savvy management of resources by management and also excellent stewardship by directors of the bank.
For the first three months through March 2014, Infinity grew gross earnings by 47 percent to N154.15 million from N104.60 million in the prior year (Q1’2013).
Profit before tax (PBT) in the review period surged by 131 percent to N64.73 million compared with N27.93 million as of Q1 2013. Profit after tax (PAT) also increased by 131 percent to N58.73 million in Q1’2014, as against N27.93 million as of Q1’2013.
The bank was also able to reduce cost as cost-to-income reduced to 55.12 percent in Q1’2014, from 71.59 percent as of Q1’2013, while loan loss expense remained nil.
Net margin, a measure of profitability and efficiency, moved to 38.1 percent in Q1’2014, compared with 26.70 percent in Q1’2013.
Some analysts are of the view that the recapitalisation and restructuring exercise in the industry also help spur growth of mortgage business in Nigeria.
The industry has been tapping into the immense opportunities created by the Nigeria Mortgage Refinancing Company (NMRC) such as increase in mortgage lending by the provision of long- term fund; and, also the introduction of a new class of high quality long-term assets.
In order to bridge or close the 17 million housing deficits besetting the country, Infinity Mortgage recently announced its preparedness to partner international funds for the development of mass housing units across the country.
The Abuja-based company has succeeded in providing 10,000 housing units for residents of the Federal Capital Territory.
It must be noted that the real estate sector grew by 10.35 percent and had achieved double digit growth every quarter since Q1 2012.
Infinity Bank is not relenting on its growth prospects as it expended its assets base, the manifestation is the increase in total assets by 24.84 percent to N7.63 billion in Q1’2014, from N6.15 billion in Q1’2013.
Loan portfolio also surged, which means the Mortgage house is aggressive about lending as loans and advances to customers in the review period spiked by 36 percent to N1.21 billion in Q1’2014, as against N870.23 million as of Q1’2013.
The bank had a return on Average equity (ROeE) of 4.71 percent in the review period while Return on Average assets (ROaE) was 3.44 percent.
Share performance and outlook
The bank’s share price on May 20, 2014, closed at N1.61 on the floor of the exchange, while market value was also N6.17 billion.
As part of its organic growth strategy, the company has plans in the pipeline to spread its tentacles by opening branches in Port Harcourt and Kano.
There are enormous opportunities for the company to tap into as real estate’s contribution to the Nigerian economy shows possible growth prospect for the mortgage company.
The real estate sector contributed 8.01 percent to the Nigerian economy, equivalent to N6.43 trillion ($40.9bn) of the total rebased GDP estimate of N80.22 trillion ($510bn).
With the proposed US housing refinancing model (Fannie Mae) about to be imitated by the Federal Mortgage Authority of Nigeria, all things being equal, Infinity Mortgage is on the right growth trajectory.
BALA AUGIE
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