GCR Ratings has assigned BB+ long term national scale issuer rating to AG Mortgage Bank Plc, noting that its outlook is stable. The Rating agency said ratings assigned to AG Mortgage Bank Plc balance its sound capitalisation, established track record, intermediate funding and liquidity, and weak risk position, as reflected by a high non performing loan (NPL) ratio.
AG Mortgage Bank Plc was incorporated in July 2004 (as AG Homes and Loans Plc) and commenced operations in January 2005. The bank’s business mandate is the provision of mortgage finance and solutions to individuals, corporates, construction companies, and property developers in Nigeria. In addition, the bank is accredited by the Federal Mortgage Bank of Nigeria (FMBN) under the National Housing Fund (NHF) scheme for the purpose of on-lending to qualified individuals under the NHF scheme.
In April 2007, the Bank was rebranded to AGMB and is currently a national mortgage bank, with five branches strategically organised into three regional offices located in Abuja, Enugu, and Lagos States. These branches are complemented by seven cash centres that support deposit mobilisation. AG Mortgage Bank Plc operates independently and does not belong to any group, thus the adoption of a standalone credit analysis in assigning the national scale issuer ratings.
“The stable outlook reflects GCR’s expectations that AG Mortgage Bank Plc core capital ratio will be sustained at a sound range of between 27percent – 33percent over the next 12-18 months due to the planned capital injection and loan book growth, although the NPL ratio is likely to remain elevated.
“Furthermore, we expect the successful issuance of the planned medium-term bond to support the Bank’s funding stability over the rating horizon,” GCR Ratings said.
The rating agency further said, “A positive rating movement could stem from a material improvement in profitability, capitalisation, and sectorial diversification of the loan book. In addition, a good track record of maintaining the NPL ratio within a sound range, with minimal write-offs will be positively considered. Conversely, a material deterioration in asset quality (NPL and Credit Losses) and capitalisation metrics, with the core capital ratio lower than 25percent could result in a negative rating action.”
As at December 31, 2023 shareholders that held 5percent or more of the issued shares include: Assemblies of God Ministers Benefit Scheme which hold 5.192 billion units, representing 51.9 percent of the issued shares; Charterhouse Asset Management Plc (2.245billion units which represents 22.5 percent equity holding); AG Nigeria (1.502billion units which represents 15 percent equity holding); while and Others account for 1.059billion units of the bank’s issued shares, representing 11 percent of AG Mortgage Bank Plc equity holding.
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