Abbey Mortgage Bank Plc, formerly Abbey Building society, recorded a drop in profit before tax for its operations in the 2011 financial year from N1.69 billion recorded in 2010 to N1.58 billion in 2011, representing a reduction of 39.47 percent. Gross earnings also dropped by 6.51 per cent from N1.69 billion in 2010 to N1.58 billion in 2011.

Chairman of the mortgage bank, Chief Ifeanyichukwu Ochonogor, who gave the financial scorecard at the 20th annual general meeting of the bank, attributed the low performance to the vagaries in the property market throughout 2011. “Whereas the upper end properties continued a downward slide in both sales and rentals, low and medium income properties were quite active,” he stated.

Ochonogor however revealed that total asset of the bank grew by 7.34 per cent from N11.44 billion within the same period to N12.28 billion while deposit liabilities increased by 7.51 per cent from N3.46 billion to N3.72 billion, also within the period.

Meanwhile, shareholders of the mortgage bank have endorsed operational changes of the bank to conform with the reform agenda of Central Bank of Nigeria (CBN) for mortgage banks and in line with international best practices.

Among such changes is the renaming of the bank from Abbey Building Society Plc to Abbey Mortgage Bank Plc and approval of a National PMB status for the bank in accordance with new CBN guidelines, released in March 2012 with retrospective effect from November 2011.

In her remarks, Managing Director of the bank, Mrs. Rose Okwechime, said in order to firm up its operations, the bank has engaged a risk management consultant to do an organisation wide review, development of risk policies, parameters, monitoring/execution plan and subsequently set up a risk management department for the bank. In addition, she said new mortgage software – Finnone lending – was acquired from India to address the bank’s growing loan portfolio and reporting requirements of both CBN and international investors.

Okwechime disclosed that Abbey signed a $15 million joint financing agreement of the Agbara Phase III project with FMO for the development of 220 middle income housing units for the first phase of the project, adding that the project is expected to commence in the 2012 financial year.

She further noted that Abbey is also supporting the development of Citigate project through a joint financing with FMO to the tune of $17.5 million aimed at delivering 1,000 housing units in Ibadan. “We drew down on the second tranche of the $10 million FMO convertible loan in March, 2011 thereby resulting in a long term loan portfolio of N2.43 billion as at the end of the 2011 financial year,” she said.

According to her management’s priority in 2011 was to reposition the bank for the challenges of the next five years, for which considerable time was dedicated to restructuring their portfolios of assets, adding that they also committed funds for the relocation of their head office to Victoria Island in Lagos. She also noted that the bank has a good working relationship with two foreign investors – Shelter Afrique and Afric-Invest.