Infinity Trust Mortgage’s earnings spike as recession hits industry

Infinity Trust Mortgage Bank’s (ITMB) Plc’s earnings have spiked in the first quarter of the year as mortgage lenders and property dealers in Africa’s most populous nation continue to grapple with an economic downturn.

For the first three months through March 2017, ITMB’s net income rose by 35.94 per cent to N58.21 million as against N42.82 million the previous year.

The Nigerian mortgage giant’s interest earned on assets exceeded interest paid on deposit as interest income increased by 129.92 million in March 2017, from N111.95 million the previous year.

Interest and similar income for the period under review rose by 16.68 per cent to N145.13 million, driven by 202.15 per cent surge in interest on other mortgage loans and advances to customers.

ITMB has been recording strong growth since it went public in 2013 despite operating in a tough and unpredictable macro environment.

Mortgage lenders and property dealers continue to buckle under the weight of unpaid loans and weak market conditions as evidenced in job losses.

Experts say the rising cost of building materials and cost of living that undermined consumer purchasing power hindered customers from paying off their debt.

President Muhammadu Buhari’s administration has been grappling with the sharp drop in oil price and a severe dollar shortage that tipped the country to its first recession in 25 years.

Nigeria’s gross domestic product (GDP) contracted by 0.52 per cent in the first quarter of the year, though lower than the 1.50 per cent drop in the last quarter of last year, according to the National Bureau of Statistics (NBS).

Real estate GDP contracted by 3.10 per cent, according to the NBS. The sector contributed 6.32 per cent to real GDP in the first quarter of 2017, lower than the 6.48 per cent it recorded in the corresponding quarter 2016 and still lower than 7.63 per cent in the preceding quarter.

ITMB remained resilient and steadfast amid the scotching environment as net margin, a measure of efficiency increased to 28.29 per cent in the period under review from 67.47 per cent the previous year.

 The Bank’s cost to income ratio (CIR), another measure of efficiency fell to 65.67 per cent in March 2017 from 67.47 per cent as at March 2016. A lower CIR means a lender is efficient.

ITMB’s loans and advances to customers stood at N2.48 billion as at March 2017, 2.91 per cent rise from N2.41 billion recorded the previous year. Deposit to customers was up 15.68 per cent, rising to N1.77 billion in March 2017 from N1.53 billion as at March 2016.

Bala Augie