Mortgage banks ride on rising demand for properties to drive growth

Nigerian mortgage banks are taking advantage of the high demand for properties to drive growth as they provided more financing to customers which saw loans grew by 43.5 percent.

The latest unaudited financial statements of three listed mortgage banks, InfinityTrust Mortgage Bank, Abbey Mortgage Bank, and LivingTrust Mortgage Bank revealed that mortgage loans and advances to customers rose to N6 billion from N4.18 billion at the end of 2023, highlighting the renewed appetite to invest and own properties.

A mortgage is a debt instrument specific to the real estate industry and secured by the collateral of a real estate property while Mortgage loans are used to purchase or refinance real estate properties.

However, the principal activities of Mortgage banks are to provide mortgage services, financial advisory, and real estate construction finance.

Despite economic fluctuations, real estate remained a resilient investment option in 2024, offering long-term financial stability and wealth accumulation.

In Lagos, properties in high-demand areas like Lekki, Ikoyi, and Victoria Island appreciated by an average of 15 percent in 2024, and similar trends are expected in 2025. This makes real estate an attractive investment for capital appreciation, particularly in emerging urban districts.

Further analysis shows that the share of interest income from mortgage loans and advances to customers slightly declined by 2.2 percent, contributing 32.2 percent of total interest income in 2024.

Net interest income of the three listed mortgage banks rose to N18.2 billion in 2024 from N12.13 billion at the end of 2023.

Read also: Mortgage banks ride on rising demand for properties to drive growth

Analysis of individual firms:

InfinityTrust Mortgage Bank

InfinityTrust Mortgage’s after-tax profit rose to N1.65 billion in 2024 from N1 billion in the same period of 2023 while its pre-tax profit grew to N1.7 billion from N1.2 billion.

Its revenue increased to N4.3 billion from N2.9 billion while its interest and similar income grew to N3.4 billion from N2.5 billion.

The mortgage bank’s total assets increased to N24.6 billion from N20.6 billion with a breakdown from dues from banks which amounted to N3.5 billion from N1.7 billion, loans and advances to customers grew to N16.2 billion from N15.4 billion.

Abbey Mortgage Bank

The after-tax profit of Abbey Mortgage increased to N1.2 billion in 2024 from N871.2 million in the same period of 2023 while pre-tax profit rose to N1.28 billion from N951 million.

Its interest income increased to N11.9 billion from N7.2 billion while its interest expenses grew to N8.6 billion from N4.7 billion.

The mortgage bank’s total assets increased to N83.3 billion from N57.5 billion with a breakdown from dues from banks and other financial institutions which amounted to N24.9 billion from N12.7 billion, and financial investments on securities at amortised cost grew to N41.7 billion from N26.8 billion.

LivingTrust Mortgage

The earnings of LivingTrust Mortgage Bank rose to N854.5 million in 2024 from N568.3 million in the same period of 2023 while its pre-tax profit rose to N911 million from N665.7 million.

Its revenue increased to N3.7 billion from N2.9 billion while its interest and similar income grew to N2.9 billion from N2.4 billion.

The mortgage bank’s total assets increased to N24.4 billion from N17.8 billion with a breakdown from dues from banks which amounted to N5.6 billion from N3.6 billion, loans and advances to customers grew to N13.9 billion from N12.8 billion.