Infinity Trust Mortgage Bank Plc (ITMB) consistent impressive performance amid tough and unpredictable operating environment has paid off as the Global Credit Rating (GCR), Africa credit agency, has confirmed the mortgage giant with BB+ credit ratings.
The rating agency BB+ ratings on ITMB means positive outlook for the company in the long term in 2015 year based on its 2014 financial result.
Analysts say the ratings aren’t surprising given ITMB consistent stellar performance since listing on the floor of the Nigeria Stock Exchange (NSE). They also added that with this latest development, it shows the company is tapping into the Nigeria growing population that crave for accommodation.
According to its recent rating report, the GCR, which rates about 3000 local and international organisations spanning four continents, stated that ITMB Plc was given the rating due to improvement in the bank’s competitive capacity, brand perception, corporate governance practices and robust financial performance, among other things.
In 2014, GCR rated ITMB Plc BB+ with positive outlook in the long term and A3 with stable outlook in the short term. The 2014 rating was an improvement over the 2012 and 2013 rating of BB+ with stable outlook in the long term and A3 with stable outlook in the short term.
Indeed 2014 was a vintage year for ITMB as its audited financial statements showed net income increased by 29.62 percent to N244.73 million from N188.80 million as at December 2013.
Turnover jumped by 27.14 percent to N743 million as the company continues to bolster top lines with aggressive expansion across a broad spectrum.
The audited financial statement for 2014 also showed interest and similar income moved by 38.0 percent to N412 million as against N399.22 million as at December 2013. Earnings per share EPS jumped to 5.87k in FY 2014 as against 4.53k as at December 2013.
“The 2015 rating takes cognisance of Infinity Trust Mortgage Bank Plc’s improved competitive capacity, enhanced brand perception resulting from its transformation from a private limited liability company to a public company in 2013, and the subsequent upgrade of its license to a National Primary Mortgage Bank in 2014.
“ITMB is considered well capitalised. Total shareholders’ funds were N5.5bn at 31 December 2014, relative to minimum capital requirements of N5.0bn for a National Primary Mortgage Bank, translating to a robust risk weighted Capital adequacy ratio (CAR) of 122 per cent, against the regulatory minimum CAR of 10 per cent.
Despite the political uncertainty and slow economic growth that dampened demand for accommodation in the first quarter of the year, ITMB’s turnover increased by 9.04 percent to N555.24 million in the nine months through September 2015 while net income moved by 4.62 percent to N181.11 million.
The sector witnessed slow growth as investors withhold their money because they fretted over the outcome of last election won by President Muhammadu Buhari.
Some industry analysts say mortgage lending is weak because of the lack of clear property rights, high costs of property transactions, inefficient land management systems and delay in getting the required approval for land transaction.
ITMB’s share price closed N4.22 on the floor of the exchange while market capitalization was N5.922 billion.
“In addition, liquidity risk is considered low, given the bank’s strong key liquidity indicators at the balance sheet date. The cash and liquid assets to short-term funding ratio stood at 183.1 per cent at 2014 financial year, while the maturity matching of assets and liabilities reflected liquidity buffers across all maturity bands,” the report summed.
BALA AUGIE
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