Nigerian mortgage and real estate industry is beset with a myriad of challenges that makes it practically difficult to bridge the 17 million housing deficit.
While the introduction of the Importers’ and Exporters’ Windows by the central bank and a rebound in crude oil price helped the country exist its first recession in 25 years, the economy continues to grow at a slow pace.
That means owning or buying a property a country where over 50 percent of its people live on less than $1.92 a day is a luxury, which is why mortgage banks are grasping for breath as they are unable to break even.
Other challenges inhibiting the growth of the industry includes: the land use Act and insufficient funding.
Little wonder the mortgage and real estate contribution to the economy remains abysmally poor compared to some sub-Saharan African countries.
Nigeria is yet to realize its real estate sector’s potential, considering it was only able to contribute 6.50 percent to the country’s GDP in Q3 2018 as against its 6.83 percent it contributed in the second quarter of last year, and the 5.63 percent contribution it reported in the preceding quarter.
Whereas in South Africa, the region’s most industrialized and second largest economy after Nigeria, its real estate sector contributes about 30 percent to GDP, and in the UK, the property industry contributes about 70 percent.
Amid these myriad of challenges, Infinity Mortgage Trust Bank Plc continues to thrive as evidenced by consistent earnings growth and margin expansion,while it shareholdes have rewarded in form of steady diviend payment.
For the first three months through March 2019, Infinity Mortgage Trust’s turnover increased by 60.22 percent to N344.90 million from N215.26 million the previous year. Revenues have been growing at a Compound Annual Growth Rate (CAGR) of 12.15 percent between 2015 and 2019.
Interest income moved by 51.03 percent to N253.41 million in the period under review from N167.78 million the previous year; the growth at the top lines was driven by an increase of 65.33 percent, 80.65 percent, and 44 percent in Other Mortgage Loans and advances to customers, Treasury Operations and Placements, and National Housing Fund Loans.
Infinity Mortgage Trust has been investing in latest technology,while intensifying on its online banking business, as fees and commission income rose by 53.51 percent to N16.96 million in the period under review from N11.05 million as at March 2018.
Also, noninterest revenue was up 92.75 percent to N91.48 million from N47.46 million the previous year.
Infinity Mortgage Trust has utilized the resources of its owners in generating higher profit while turning each Naira invested in sales into higher profit.
For instance, pretax profit margin increased to 39.10 percent in the period under review from 30.50 percent the previous year while net margin increased by 36 percent in March 2019 from 27.40 percent the previous year.
Retrun on equity (ROE) increased to 2.10 percent in the period under review as against 1 percent the previous year.
A high ROE means the Bank has been growing profit consistently while retained earnings have been on upward trajectory.
Net profit surged by 110.01 percent to N123.76 million in the period under review from N58.93 million the previous year while profit before tax followed the same growth trajectory as it spiked by 15.43 percent to N134.52 million from N65.48 million as at March 2018.
The nargin expansion is the largest among peer rivals that capitulated to the macroecononic headwinds.
The mortgage giant’s operating profits surged by 57.72 percent to N304.41 billion in the period under review as against N194.23 billion as at March 2018.
Infinity mortgage Trust has been aggressive about lending as loans and advances were up 5.19 percent to N4.04 billion in the period under review as against N3.80 billion.
Declares dividend of 3K
The company has a steady dividend payment as it has declared a final dividend of 3 kobo per 50 kobo ordinary share for the financial period ended December 201.
Come Thursday, May 30, 2019, the dividends will be paid electronically to shareholders whose names appear on the Register of Members as at Wednesday, April 24, 2019.
Only shareholders who have completed the e-dividend registration process and mandated the Registrar to pay their dividends directly into their bank accounts, will get paid.
While the Register of shareholders will be closed between April 25th, 2019 to May 9th, 2019, April 24th, 2019, has been scheduled as the Qualification Date.
Infinity Trust Mortgage Bank Plc was incorporated on January 28, 2002. It, however, 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 toInfinity Trust Mortgage Bank Plc.
Consequently, its shares were listed by introduction on the main floor of the Nigerian Stock Exchange (NSE) on December 11, 2013.
In 2014, it became a National Mortgage Bank. Currently, the bank has equity shareholding in Nigeria Mortgage Refinance Company (NMRC).
Infinity Trust Mortgage Bank Plc is currently trading at N1.42 on the floor of the NSE.