Abbey Annual Report Final 2021_compressed-compressed

NOTES TO THE FINANCIAL STATEMENTS - Continued

FOR THE YEAR ENDED 31 DECEMBER 2021

AS AT 31 DECEMBER 2021 NAIRA US DOLLAR EURO TOTAL
₦'000 ₦'000 ₦'000 ₦'000

Financial assets: 21,469,461 3,391,548 297 24,861,306
Cash and balances with central banks / due from 6,161,141 - - 6,161,141
banks 76,762 - - 76,762
Loans and advances 497,111 - - 497,111
Other financial assets - -
Financial investments - securities at FVTPL 1,334,882 1,334,882
Financial Investments- securities at amortised cost 29,539,357 3,391,548 297 32,931,202

Financial liabilities: 5,577,842 - - 5,577,842
Due to other financial institutions 21,276,904 - - 21,276,904
Due to customers - - 405,509
Other financial liabilities 405,509 - - 218,135
Due to the National Housing fund 218,135 - - 27,478,390

Net open currency posi on 27,478,390 3,391,548 297 5,452,812

2,060,967

AS AT 31 DECEMBER 2020 ₦'000 ₦'000 ₦'000 ₦'000

Financial assets: 9,084,448 258 297 9,085,003
Cash and balances with central banks / due from 4,788,092 - - 4,788,092
banks - - 93,945
Loans and advances 93,945 - - 329,334
Other financial assets 329,334 - - 2,826,364
Financial investments - securities at FVTPL 2,826,364
Financial Investments- securities at amortised cost 17,122,183 258 297 17,122,738

Financial liabilities: - -
Due to other financial institutions 14,629,440 - - 14,629,440
Due to customers - - 244,501
Other financial liabilities 244,501 - - 269,300
Due to the National Housing fund 269,300
15,143,241 - - 15,143,241
Net open currency position
1,978,942 258 297 1,979,497

100

NOTES TO THE FINANCIAL STATEMENTS - Continued

FOR THE YEAR ENDED 31 DECEMBER 2021

The Bank's exposure to foreign currency risk is low. Movement in exchange rate between the US
Dollar and the Euro affects reported earnings through revaluation gain or loss and the statement of
financial position size through increase or decrease in the revalued amounts of assets and liabilities
denominated in Euro.

Foreign exchange sensitivity analysis

The Foreign exchange sensitivity analysis of the Bank is presented below.

For each foreign currency net exposure ,it is reasonable to assume a 5% appreciation/depreciation
against the functional currency. If all other variables are held constant, the tables below present the
impacts on profit or loss before tax if these currency movements had occurred.

As at 31 December 2021 US DOLLAR EURO
Net foreign currency exposures N'000 N'000
3,391,548 297
As at 31 December 2020
Net foreign currency exposures 258 297

The Bank is exposed to the US Dollar and Euro currencies.

The following table details the sensitivity to a 5% increase and decrease in Naira against the US Dollar
and Euro. Management believe that a 5% movement in either direction is reasonably possible at the
reporting date. The sensitivity analyses below include outstanding US Dollar and Euro denominated
assets and liabilities. A positive number indicates an increase in profit where Naira strengthens by 5%
against the US Dollar and Euro. For a 5% weakening of Naira against the US Dollar and Euro, there
would be an equal and opposite impact on profit, and the balance below would be negative.

Foreign exchange sensitivity analysis (31 December 2021) N169,577,386
Naira strengthens by 5% against the US Dollar N(169,577,386)
Profit/ (loss) N14,853
Naira weakens by 5% against the US Dollar N(14,853)
Profit/(loss)
Naira strengthens by 5% against the Euro
Profit/(loss)
Naira weakens by 5% against the Euro
Profit/(loss)

101

NOTES TO THE FINANCIAL STATEMENTS - Continued

FOR THE YEAR ENDED 31 DECEMBER 2021

Foreign exchange sensitivity analysis (31 December 2020) N12,900
Naira strengthens by 5% against the US Dollar N(12,900)
Profit/ (loss) N14,853
Naira weakens by 5% against the US Dollar N(14,853)
Profit/(loss)
Naira strengthens by 5% against the Euro
Profit/(loss)
Naira weakens by 5% against the Euro
Profit/(loss)

3.5.4 Equity and commodity price risk

The Bank is exposed to equity price risk by holding investments quoted on the Nigerian Exchange
Group (NGX) and other non-quoted investments. Equity securities quoted on the NGX is exposed to
movement based on the general movement of the all share index and movement in prices of specific
securities held by the Bank.

The Bank holds 5,000,000 quoted shares in Universal Insurance Plc with a market value of N1 million
and 55,555,555 quoted shares in Nigeria Mortgage Refinance Bank with carrying value of
N291.1million as at year end.

The Bank does not hedge against this risk, hence, these are the exposures to the risk.

The Bank does not deal in commodities and is therefore not exposed to any commodity price risk.

The following table details the sensitivity to a 5% increase and decrease in equity prices.
Management believe that a 5% movement in either direction is reasonably possible at the reporting
date.

3.5.5 Interest rate risk
Interest rate risk arises from the possibility that changes in interest rates will affect future cash flows
or the fair values of financial instruments. The Bank manages this risk by ensuring significant portion
of its loans are contracted on fixed interest rate.

102

NOTES TO THE FINANCIAL STATEMENTS - Continued

FOR THE YEAR ENDED 31 DECEMBER 2021

3.6 FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES

a Financial instruments measured at fair value
IFRS 13 specifies a hierarchy of valuation techniques based on whether the inputs to those valuation
techniques are observable or unobservable. Observable inputs reflect market data obtained from
independent sources; unobservable inputs reflect the Bank market assumptions. These two types of
inputs have created the following fair value hierarchy:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or

liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices)
Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable

inputs)
This hierarchy requires the use of observable market data when available. The Bank considers
relevant and observable market prices in its valuations where possible.

Level 1 Level 2 Level 3 Total
₦'000 ₦'000 ₦'000 ₦'000

AS AT 31 DECEMBER 2021 292,111 - 205,000 497,111
Assets measured at fair value
Financial investments - securities at FVTPL - - 5,243,647 5,243,647
- - 1,357,370 1,357,370
Assets for which fair value is disclosed 292,111 - 6,806,017 7,098,128
Loans and advances
Financial Investments- securities at amortised cost

Liabilities for which fair value is disclosed - - 5,577,842 5,577,842
Due to other financial institutions
Due to customers - - 21,276,904 21,276,904
Other financial liabilities
Due to the National Housing Fund - - 391,227 391,227

- - 40,450 40,450

- - 27,286,423 27,286,423

AS AT 31 DECEMBER 2020 329,334 - - 329,334
Assets measured at fair value
Financial investments - securities at FVTPL - - 4,196,525 4,196,525
- - 2,850,417 2,850,417
Assets for which fair value is disclosed 329,334 - 7,046,942 7,376,276
Loans and advances
Financial Investments- securities at amortised cost - --
-
Liabilities for which fair value is disclosed - - 14,629,440 14,629,440
Due to other financial institutions -
Due to customers - 207,380 207,380
Other financial liabilities
Due to the National Housing Fund - 43,241 43,241

- 14,880,061 14,880,061

103

NOTES TO THE FINANCIAL STATEMENTS - Continued

FOR THE YEAR ENDED 31 DECEMBER 2021

Quoted equity instrument
Level 1 equity securities relates to securities quoted on the Nigerian Exchange Group and NASD.
Level 3 equity instruments were purchased close to the year end. Cost of purchase is taken as fair
value.
The fair value of the loans and advances and Due to NHF have been determined using the discounted
cash flow method (DCF") using the Central Bank of Nigeria prime lending rate at the year end, the
significant observable input.
The fair values of cash balances with Central Bank, Due from Banks and other liabilities estimates
their carrying amounts due to their short nature.
There have been no transfer between the levels.

b Set out below is a comparison by class of the carrying amounts and fair values of the Bank's
financial instruments that are carried in the financial statements.

2021 Carrying value 2021 Fair value
₦'000 2020 ₦'000 2020
₦'000 ₦'000
5,243,647
Loans and advances 6,781,850 5,625,623 497,111 4,196,525
Financial investments - securities at FVTPL 497,111 329,334 329,334
Financial Investments- securities at amortised cost 1,357,370
1,357,370 2,850,417 2,850,417
7,098,128
8,636,331 8,805,374 7,376,276
5,577,842
Due to other financial institutions 5,577,842 - 21,276,904 -
Due to customers 21,276,904 14,629,440 14,629,440
Other financial liabilities 391,227
Due to the National Housing Fund 391,227 207,380 40,450 207,380
218,135 269,300 27,286,423 43,241
27,464,108 15,106,120
14,880,061

c Fair valuation methods and assumptions

(ii) Equity securities
The fair value of quoted equity securities are determined by reference to quoted prices
(unadjusted) in active markets for the instrument. As at the reporting date, the Bank does not
have any plan to dispose the investments and plans to hold the investment for the foreseeable
future.

(iii) Loans and advances
Loans and advances are carried at amortised cost gross of expected credit loss. The estimated
fair value of loans and advances represents the discounted amount of estimated future cash
flows expected to be received. Expected cash flows are discounted at average of prime lending
rate and maximum lending rate to determine fair value.

(iv) Financial Investments -securities at amortised cost
Fair value of financial investments at amortised cost approximates the carrying amount due to
their short term nature.

104

NOTES TO THE FINANCIAL STATEMENTS - Continued

FOR THE YEAR ENDED 31 DECEMBER 2021

(v) Due to customers, other liabilities and Due to NHF
The estimated fair value of deposits with no stated maturity, which includes non-interest
bearing deposits, is the amount repayable on demand. The estimated fair values of due to NHF
are determined using average of prime lending rate and maximum lending rate appropriate for
the remaining term to maturity.

3.7 CAPITAL MANAGEMENT
The Bank objectives when managing capital, which is a broader concept than the 'equity' on the
face of the statement of financial position, are:

Ÿ To comply with the capital requirements set by the regulators of the banking markets where
the Bank operates;

Ÿ To safeguard the Bank's ability to continue as a going concern so that it can continue to
provide returns for shareholders and benefits for other stakeholders; and

Ÿ To maintain a strong capital base to support the development of its business.

Capital adequacy and the use of Regulatory Capital are monitored daily by the Bank's
management, employing techniques based on the CBN guideline. The required information is
filed with the CBN on a quarterly basis. The Bank maintains a ratio of Total Regulatory Capital to
its risk-weighted assets (the 'Basel ratio') above a minimum level required by the regulatory
authority which takes into account the risk profile of the Bank. The regulatory capital
requirements are strictly observed when managing economic capital. The Bank's regulatory
capital, comprising of the following two tiers, is managed by Risk Management, Treasury and
Strategy.

Ÿ Tier 1 capital: share capital, retained earnings and reserves created by appropriations,
statutory reserve, non-controlling interests arising on consolidation from interests in
permanent shareholders' equity.

Ÿ Tier 2 capital: qualifying subordinated loan capital and unrealised gains arising on the fair
valuation of equity instruments held as available for sale.

The table below summarises the composition of regulatory capital and the ratios of the Bank for
the year ended 31 December 2021. During the year, the Bank complied with all of the externally
imposed capital requirements to which it is subject.

105

NOTES TO THE FINANCIAL STATEMENTS - Continued

FOR THE YEAR ENDED 31 DECEMBER 2021

Tier 1 capital 2021 2020
Share capital ₦'000 ₦'000
Share premium 5,076,923 3,230,769
Accumulated losses 5,117,137 4,008,277
Statutory reserve (4,916,732) (5,029,743)
Intangible Assets 298,440 298,440
(12,006) (16,619)
Total regulatory capital
5,563,762 2,491,124

In accordance with CBN circular BSD/DIR/GEN/LAB/07/021, regulatory reserve is no longer
included in Tier 1 capital computation.

Risk-weighted assets 11,465,913 8,069,629
On statement of financial position - 33,442
Off statement of financial position

11,465,913 8,103,071

Risk-weighted Capital Adequacy Ratio (CAR) 49% 31%

Minimum Capital Adequacy Ratio (CAR) 10% 10%

4 SEGMENT REPORTING
Information regarding the results of each reportable segment is included below. Performance is
measured based on segment profit (or loss) before income taxes, as included in the internal
management reports that are reviewed by the Bank's CEO. The CEO is considered the chief
operating decision maker in the Bank. Segment profit is used to measure performance as
management believes that such information is the most relevant in evaluating the results of certain
segments relative to other entities that operate within this industry. Inter-segment pricing is
determined on an arm's length basis.

4.1 SERVICES FROM WHICH REPORTABLE SEGMENTS DERIVE THEIR REVENUES
Information reported to the chief operating decision maker (the CEO) for the purposes of resource
allocation and assessment of segment performance focuses on types of goods or services delivered
or provided. The Bank's reportable segments under IFRS 8 are based on geography and are splited
between the north and the south of the Country

4.2 GEOGRAPHICAL SEGMENT REVENUES AND RESULTS
The following is an analysis of the Bank's revenue and results from continuing operations by
reportable segment.

106

NOTES TO THE FINANCIAL STATEMENTS - Continued

FOR THE YEAR ENDED 31 DECEMBER 2021

Year ended 31 December, 2021 NORTH SOUTH TOTAL
₦'000 ₦'000 ₦'000

Interest income calculated 76,213 3,238,039 3,314,252
using the effective interest rate method
Interest expense calculated (187,733) (1,496,210) (1,683,943)
using the effective interest rate method
Net interest income (111,520) 1,741,829 1,630,309
Fees and commision income 294 134,997 135,291
Loss on disposal of non-current asset held for sale - (5,570) (5,570)
Other operating income 234,213 239,170
Total operating income 4,957 2,105,469
Credit loss expense (106,269) 180,120 1,999,201
Net operating income 2,285,589 180,120
-
(106,269) 2,179,321

Personnel expenses (37,644) (552,781) (590,425)
Depreciation (6,034) (65,720) (71,754)
Amortisation (4,613)
Other operating expenses - (4,613)
Total operating expenses (23,640) (827,826) (851,466)
Segment loss/Profit (67,318) (1,450,940) (1,518,258)
Income tax expense (173,587)
Profit for the year 834,649 661,063
(173,587) (38,865) (38,865)
795,784 622,198

Assets NORTH SOUTH TOTAL
₦'000 ₦'000 ₦'000
As at December 31, 2021
Cash on hand 2,581 12,454 15,035
Cash balances with central bank - 467,891 467,891
Due from banks - 24,378,380 24,378,380
Loans and advances 5,225,149 6,161,141
Financial investments - equity 935,992
instrument at FVTPL - 497,111 497,111
Financial Investments-
securities at amortised cost - 1,334,882 1,334,882
Other assets
Property and equipment 520 309,163 309,683
Intangible assets 172,209 955,659 1,127,868
Non-current assets held for sale
- 12,006 12,006
- 156,436 156,436

1,111,302 33,349,131 34,460,433

107

NOTES TO THE FINANCIAL STATEMENTS - Continued

FOR THE YEAR ENDED 31 DECEMBER 2021

Liabili es - (5,577,842) (5,577,842)
(553,905) (20,722,999) (21,276,904)
Due to other financial institutions
Deposits from customers (8,897) (397,074) (405,971)
Other liabilities
- (49,327) (49,327)
Current income tax payable
Due to National Housing Fund (217,789) (346) (218,135)

(780,591) (26,747,588) (27,528,179)

Year ended 31 December, 2020 NORTH SOUTH TOTAL
₦'000 ₦'000 ₦'000

Interest income calculated using the effective 199,690 1,199,748 1,399,438
interest rate method
Interest expense calculated using the effective (54,550) (484,828) (539,378)
interest rate method
Net interest income 145,140 714,920 860,060
Fees and commision income 13 588 601
Loss on disposal of non-current asset held for sale -
Other operating income (860) (860)
Total operating income 3,811 116,455 120,266
Credit loss expense 148,964 831,103 980,067
Net operating income (3,887,927) (3,887,927)
Personnel expenses - (3,056,824) (2,907,860)
Depreciation 148,964 (372,635) (414,441)
Amortisation (41,806) (52,016) (57,678)
Other operating expenses (5,662) (6,502) (6,502)
Total operating expenses (884,314) (911,391)
Segment loss - (1,315,467) (1,390,012)
Income tax expense (27,077) (4,372,291) (4,297,872)
Loss for the year (74,545) (3,747) (3,747)
(4,376,038) (4,301,619)
74,419
-

74,419

108

NOTES TO THE FINANCIAL STATEMENTS - Continued

FOR THE YEAR ENDED 31 DECEMBER 2021

Assets NORTH SOUTH TOTAL
₦'000 ₦'000 ₦'000
As at December 31, 2020
Cash on hand 43 1,977 2,020
Cash balances with central bank - 289,774 289,774
Due from banks - 8,793,209 8,793,209
Loans and advances 3,832,916 4,788,092
Financial investments - equity 955,176 329,334 329,334
instrument at FVTPL
Financial Investments- - 2,826,364 2,826,364
securities at amortised cost
Other assets - 116,865 117,742
Property and equipment 919,640 1,092,515
Intangible assets 877
Non-current assets held for sale 172,875 16,619 16,619
264,681 264,681
Liabilities - 17,391,379 18,520,350
Deposits from customers -
Other liabilities 1,128,971
Current income tax payable
Due to National Housing Fund 1,977,392 12,652,048 14,629,440
9,748 235,215 244,963
- 21,606 21,606
5,795 269,300
263,505
12,914,664 15,165,309
2,250,645

For the purposes of monitoring segment performance and allocating resources between segments:
* All assets are allocated to reportable segments.
* All liabilities are allocated to reportable segments other than current tax liabilities. Liabilities for

which reportable segments are jointly liable are allocated in proportion to segment assets.

The Bank's operations are geographically divided into two segments (North and South) based on its
operations within the nothern and southern Nigeria. The bank does not have operations outside the
country.

109

NOTES TO THE FINANCIAL STATEMENTS - Continued

FOR THE YEAR ENDED 31 DECEMBER 2021

5 Interest income calculated using the effective interest rate method 2021 2020
₦'000 ₦'000
Loans and advances 771,829 758,194
Cash and short term funds 2,372,157 616,357
Investment securities at amortized cost 170,266 24,887
3,314,252 1,399,438

6 Interest expense calculated using the effective interest rate method 2021 2020
₦'000 ₦'000
Due to customers 1,356,340 526,954
Due to NHF 10,170 12,424
Borrowings 317,433
1,683,943 -
539,378

7 Fees and commission income 2021 2020
Mortgage fees ₦'000 ₦'000

135,291 601
135,291 601

Fees and commission were earned from services provided overtime. The portion of the fee income
earned over time in the course of the year amounted to N135,291,000 (2020: N601,193).

8 Other operating income 2021 2020
₦'000 ₦'000
Rental income 10,940
Other income 1,702 36,692
(Loss)/Profit on disposal of property, plant and equipment 271,272 2,005
Fair value (loss)/gain on financial investments at FVTPL (1,582) 70,556
Foreign exchange gain (32,222)
73
- 120,266
239,170

Other income includes account maintenance fees, recoveries, dividend income on equity investments, card
maintenance fees, e-charges fees etc.

9 Credit loss expense 2021 2020
₦'000 ₦'000
Credit loss expense- Loans and advances
Credit loss expense- balances due from CBN (216,822) 3,806,463
Credit loss expense- balances due from banks (2,117) 1,435
Credit loss expense- other assets 40,385
Credit loss expense- Financial assets at amortised cost - 54,346
(1,565) 1,630

(180,120) 24,053
3,887,927

In 2020, the bank got an approval from the board to write off N4.42billion worth of loans.

110

NOTES TO THE FINANCIAL STATEMENTS - Continued

FOR THE YEAR ENDED 31 DECEMBER 2021

The table below shows the ECL charges on financial instruments for the year ended
31 December 2021:

Balances with Central Bank of Nigeria Stage 1 Stage 2 Stage 3 Total
Due from banks Individual Individual (2,117)
Other assets - 40,385
Loans and advances (2,117) - -
Financial assests at amortised cost 40,385 - - -
Total impairment loss - (216,822)
- -
(216,822) - - (1,565)
- (180,120)
(1,565)
(180,120)

The table below shows the ECL charges on financial instruments for the year ended 31 December 2020:

Balances with Central Bank of Nigeria Stage 1 Stage 2 Stage 3 Total
Due from banks Individual Individual
Other assets - 1,435
Loans and advances 1,435 - - 54,346
Financial assests at amortised cost 54,346 - -
Total impairment loss - 3,968,222 1,630
1,630 - 3,806,463
(139,216) (22,543) 3,968,222
- 24,053
24,053 3,887,927
(57,752) (22,543)

10 Personnel expenses 2021 2020
₦'000 ₦'000
Wages, salaries and other staff costs 529,491 361,416
Retirement contribution plan 28,065 24,119
Medical expenses 32,869 28,906
590,425 414,441

11 Depreciation 2021 2020
Depreciation of property, plant and equipment (Note 22) ₦'000 ₦'000
71,754 57,678
71,754 57,678

111

NOTES TO THE FINANCIAL STATEMENTS - Continued

FOR THE YEAR ENDED 31 DECEMBER 2021

12 Other operating expenses 2021 2020
₦'000 ₦'000
Directors remuneration 110,473 108,090
Subscriptions, publications, stationeries and communications 164,273 106,090
Property and equipment repairs and maintenance 63,653 38,429
Insurance expenses 31,683 29,677
Electricity and gas 35,894 26,578
Deposit insurance commission 69,919 27,741
Auditors remuneration 18,922 12,000
Professional fees 97,008 30,052
Security costs 31,016
Advertisement 37,940 7,148
Bank charges 3,722
Donation 5,162 1,543
Lease charges - short term 560
Other directors related expenses 7,038 397
Other expenses 208 7,807
177,717 368,959
851,466 143,158
911,391

Other expenses is made up of rates, service charges, staff training, travelling expenses, lunch costs and
general expenses.

13 Income tax expense 2021 2020
₦'000 ₦'000

13.1 Current income tax for the year 8,952 3,747
Income tax 21,497 -
Education tax -
Capital gains tax 120 -
NASENI Levy 1,653 -
Information technology levy 6,611 -
Nigerian police fund levy
33

Total current income tax expense 38,865 3,747

Deferred tax (Net) - -
Deferred Tax - Current origination and reversal 38,865 3,747
Income tax expense

13.2 Reconciliation of effective tax rate

The effective income tax rate for 2021 is 0.1% (2020: 0.1%).

The Bank is assessed on minimum tax for 2021 in compliance with the provision of the Finance Act
2020.

Where in any year of assessment the ascertainment of total assessable profits from all sources of a
Bank results in a loss or where a Bank's ascertained total profits results in no tax payable or tax
payable which is less than the minimum tax there shall be levied and paid by the Bank, the minimum
tax as prescribed in the subsection (2) of this sections. In compliance with Finance Act 2020, the rate
shall be reduced to 0.25% for tax returns filed in respect of any year of assessment that is due on any
date between 1st January 2020 and 31st December 2021.

112

NOTES TO THE FINANCIAL STATEMENTS - Continued

FOR THE YEAR ENDED 31 DECEMBER 2021

13.2 Reconciliation of effective tax rate 2021 2020
₦'000 ₦'000
Profit/(Loss) before income tax 661,063 (4,297,872)

Income tax using the domestic 198,319 (1,289,362)
Corporation tax rate (Minimum tax) (35,212) (176,166)
234,292 552,846
Income not subject to tax -
Non-deductible expenses 21,497 -
Education tax 120 912,682
Capital gains tax
Unrecognised tax losses* (397,398) 3,747
National agency for science and engineering Infrastructure Levy 1,653
Nigerian police fund levy 33 3,747
Information technology levy 6,611
Effect of minimum tax floor 8,951

38,865

13.3 Current income tax payable 2021 2020
At beginning of the year ₦'000 ₦'000
Income tax expense 21,606 27,982
Payments during the year 38,865
At end of the year (11,144) 3,747
49,327 (10,123)
21,606

*Unrecognised tax losses have been disclosed in the reconciliation along with prior year.
14 Profit/(loss) per share attributable to ordinary equity holders (Kobo) - Basic and Diluted Basic

Basic Profit/(loss) per share has been calculated based on Profit/(loss) after tax attributable to the
shareholders during the year and the weighted average number of issued share capital of 7,023,785
at year end (2020: 6,337,619)

Profit/(Loss) after income tax attributable to the shareholders (₦'000) 2021 2020
622,198 (4,301,619)

Issued share capital (Unit '000) 6,940,329 4,200,000
Add: Additional share issued during the year 83,456 2,137,619
Weighted average number of shares ('000) 6,337,619
7,023,785

(in kobo) 8.86 (62.65)

Diluted
There was no diluting instruments as at the reporting date. Hence, diluted profit per share is the
same as basic profit/(loss) per share.

113

NOTES TO THE FINANCIAL STATEMENTS - Continued

FOR THE YEAR ENDED 31 DECEMBER 2021

15 Cash on hand 2021 2020
Cash ₦'000 ₦'000
15,035 2,020
15,035 2,020

16 Cash balances with central bank 2021 2020
Deposits with CBN ₦'000 ₦'000
Allowances for impairment on Deposits with CBN 468,000 292,000
(2,226)
See Note 17 for nature of deposits with CBN. (109) 289,774
467,891

16.1 Impairment allowance on cash balances with CBN

The table below shows the credit quality and the maximum exposure to credit risk based on the
Bank’s internal credit rating system and year-end stage classification. The amounts presented are
gross of impairment allowances.

2021

Internal rating grade Stage 1 Stage 2 Stage 3 Total
Individual Individual
Performing ₦'000 ₦'000
Standard grade ₦'000 ₦'000
Sub-standard grade - -
Non- performing - - -
Individually impaired - - 468,000
Total 468,000 - -
- - -
- - - -
- - -
-
468,000
468,000

2020

Internal rating grade Stage 1 Stage 2 Stage 3 Total
Individual Individual
Performing ₦'000 ₦'000
Standard grade ₦'000 ₦'000
Sub-standard grade - -
Non- performing - - -
Individually impaired - - 292,000
Total 292,000 - -
- - -
- - - -
- - -
-
292,000
292,000

114

NOTES TO THE FINANCIAL STATEMENTS - Continued

FOR THE YEAR ENDED 31 DECEMBER 2021

An analysis of changes in the gross carrying amount and the corresponding ECL allowance is, as follows:

Stage 1 Stage 2 Stage 3 Total
Individual Individual
₦'000 ₦'000
Gross carrying amount as at 1 January 2021 ₦'000 ₦'000 292,000
New assets originated or purchased 292,000 -
Assets derecognised or repaid (excluding write-offs) 176,000 - - 176,000
Change in fair value - - -
Transfers to Stage 1 - - - -
Transfers to Stage 2 - - - -
Transfers to Stage 3 - - - -
Changes due to modifications not derecognised - - - -
Amounts written off - - - -
Foreign exchange adjustments - - - -
At 31 December 2021 - - - -
- - -
468,000 - 468,000

Stage 1 Stage 2 Stage 3 Total
Individual Individual
₦'000 ₦'000
Gross carrying amount as at 1 January 2020 ₦'000 ₦'000 - 129,254
New assets originated or purchased 129,254 - - 162,746
Assets derecognised or repaid (excluding write-offs) 162,746 - -
Change in fair value - - -
Transfers to Stage 1 - - - -
Transfers to Stage 2 - - - -
Transfers to Stage 3 - - - -
Changes due to modifications not derecognised - - - -
Amounts written off - - - -
Foreign exchange adjustments - - - -
At 31 December 2020 - - - -
- - 292,000
292,000

Stage 1 Stage 2 Stage 3 Total
Individual Individual
₦'000 ₦'000
₦'000 ₦'000 - 2,226

ECL allowance as at 1 January 2021 2,226 - - (2,117)
- -
New assets originated or purchased (2,117) - - -
- -
Assets derecognised or repaid (excluding write offs) - - - -
- - -
Transfers to Stage 1 - - - -
- - -
Transfers to Stage 2 - - - -
- - -
Transfers to Stage 3 - - - -
- -
Impact on year end ECL of exposures transferred between stages - - 109
-
Unwind of discount (recognised in interest income) - -

Changes due to modifications not resulting in -

Changes to models and inputs used for ECL calculations -

Recoveries -

Amounts written off -

At 31 December 2021 109

115

NOTES TO THE FINANCIAL STATEMENTS - Continued

FOR THE YEAR ENDED 31 DECEMBER 2021

Stage 1 Stage 2 Stage 3 Total
Individual Individual
₦'000 ₦'000
ECL allowance as at 1 January 2020 ₦'000 ₦'000
New assets originated or purchased - 791
Assets derecognised or repaid (excluding write offs) 791 - -
Transfers to Stage 1 - - 1,435
Transfers to Stage 2 1,435 - -
Transfers to Stage 3 - - -
Impact on year end ECL of exposures transferred between stages - - - -
Unwind of discount (recognised in interest income) - - - -
Changes due to modifications not resulting in - - - -
Changes to models and inputs used for ECL calculations - - - -
Recoveries - - - -
Amounts written off - - - -
At 31 December 2020 - - - -
- - - -
- - -
-
2,226
2,226

17 Due from banks 2021 2020
₦'000 ₦'000
Balances with FMBN
Balances with other banks 250 250
Fixed placement with banks 6,776,413 493,453
17,699,660 8,357,064
Allowances for impairment on Balances due from other banks 24,476,323 8,850,767
(97,943) (57,558)
24,378,380 8,793,209

Rate range analysis:

Fixed placements with banks and other financial institution 6.0% - 25.0% 3.0% - 15.0%

The balance with FMBN is a mandatory specified deposit required for the National Housing Fund
on-lending loan. Balance with other banks earns interest at floating rates based on daily bank
deposit rates. Fixed placements with banks are made for varying periods of between one day
and three months, depending on the immediate cash requirements of the Bank, and earn
interest at the respective fixed placement rates.

The Bank has restricted cash balances with the Central Bank of Nigeria and the FMBN. This
balance is made up of CBN and FMBN cash reserve requirement. The cash reserve ratio
represents a mandatory cash deposit which should be held with the Central Bank of Nigeria as a
regulatory requirement. Restricted deposits with Central Bank and Federal Mortgage Bank are
not available for use in the Bank's day-to-day operations.

116

NOTES TO THE FINANCIAL STATEMENTS - Continued

FOR THE YEAR ENDED 31 DECEMBER 2021

17.1 Impairment allowance on due from banks

The table below shows the credit quality and the maximum exposure to credit risk based on the
Bank’s internal credit rating system and year-end stage classification. The amounts presented
are gross of impairment allowances.

Internal rating grade Stage 1 2021 Stage 3 Total
Individual ₦'000 ₦'000
Performing Stage 2
Standard grade ₦'000 Individual
Sub-standard grade
Non- performing ₦'000
Individually impaired
Total 24,476,323 - - 24,476,323
-
Internal rating grade - -- -
-
Performing -- -
Standard grade 24,476,323
Sub-standard grade -- -
Non- performing
Individually impaired - - 24,476,323
Total
Stage 1 2020 Stage 3 Total
Individual ₦'000 ₦'000
Stage 2
₦'000 Individual 8,850,767
-
8,850,767 ₦'000 -
- -
- --
- -- 8,850,767
--
8,850,767 --
--

An analysis of changes in the gross carrying amount and the corresponding ECL allowance is, as follows:

Stage 1 Stage 2 Stage 3 Total
Individual Individual
₦'000 ₦'000
₦'000 ₦'000 - 8,850,767
- - 24,476,323
Gross carrying amount as at 1 January 2021 8,850,767 - - (8,850,767)
- -
New assets originated or purchased 24,476,323 - - -
- - -
Assets derecognised or repaid (excluding write-offs) (8,850,767) - - -
- - -
Change in fair value - - - -
- - -
Transfers to Stage 1 - - - -
- 24,476,323
Transfers to Stage 2 -

Transfers to Stage 3 -

Changes due to modifications not derecognised -

Amounts written off -

Foreign exchange adjustments -

At 31 December 2021 24,476,323

117

NOTES TO THE FINANCIAL STATEMENTS - Continued

FOR THE YEAR ENDED 31 DECEMBER 2021

Stage 1 Stage 2 Stage 3 Total

Individual Individual

N '000 N '000 N '000 N '000

Gross carrying amount as at 1 January 2020 1,834,617 - - 1,834,617
New assets originated or purchased - 8,850,767
Assets derecognised or repaid (excluding write-offs) 8,850,767 - - (1,834,617)
Change in fair value -
Transfers to Stage 1 (1,834,617) - - -
Transfers to Stage 2 - -
Transfers to Stage 3 -- - -
Changes due to modifications not derecognised - -
Amounts written off -- - -
Foreign exchange adjustments - -
At 31 December 2020 -- - -
8,850,767
--

--

--

--

8,850,767 -

Stage 1 Stage 2 Stage 3 Total
Individual Individual
₦'000 ₦'000
ECL allowance as at 1 January 2021 ₦'000 ₦'000 - 57,558
New assets originated or purchased 57,558 - - 40,385
Assets derecognised or repaid (excluding write offs) 40,385 - -
Transfers to Stage 1 - - -
Transfers to Stage 2 - - - -
Transfers to Stage 3 - - - -
Impact on year end ECL of exposures - - - -
Unwind of discount (recognised in interest income) - - - -
Changes due to modifications not resulting in - - - -
Changes to models and inputs used for ECL calculations - - - -
Recoveries - - - -
Amounts written off - - - -
At 31 December 2021 - - - -
97,943 - 97,943
Stage 3
Stage 1 Stage 2 Total
Individual Individual ₦'000
- ₦'000
ECL allowance as at 1 January 2020 ₦'000 ₦'000 - 3,212
New assets originated or purchased 3,212 - - 57,558
Assets derecognised or repaid (excluding write offs) 57,558 - - (3,212)
Transfers to Stage 1 (3,212) - -
Transfers to Stage 2 - - -
Transfers to Stage 3 - - - -
Impact on year end ECL of exposures - - - -
Unwind of discount (recognised in interest income) - - - -
Changes due to modifications not resulting in - - - -
Changes to models and inputs used for ECL calculations - - - -
Recoveries - - - -
Amounts written off - - - -
At 31 December 2020 - - -
- - 57,558
57,558

118

NOTES TO THE FINANCIAL STATEMENTS - Continued

FOR THE YEAR ENDED 31 DECEMBER 2021

17.2 Due to other Financial Institutions 2021 2020
₦'000 ₦'000
Bank Overdraft
This is an approved overdraft from First Bank Plc and UBA Plc 5,577,842 -

18 Loans and advances 2021 2020
₦'000 ₦'000
Mortgages 6,089,809 4,807,300
Advances 475,759 582,838
National Housing Fund 216,282 235,485
6,781,850 5,625,623
ECLallowance - Mortgages
- Advance (559,494) (787,260)
- National Housing Fund (52,627) (20,417)
(8,588) (29,854)
ECL Allowance - Loans and Advances (837,531)
(620,709)
Total 4,788,092
6,161,141

18.1 Impairment allowances on Loans and advances

18.1.1 Mortgages
The table below shows the credit quality and the maximum exposure to credit risk based on
the Bank’s internal credit rating system and year-end stage classification. The amounts
presented are gross of impairment allowance

2021

Internal rating grade Stage 1 Stage 2 Stage 3 Total
Individual Individual ₦'000
Performing
Standard grade ₦'000 ₦'000 ₦'000
Sub-standard grade
Non- performing 4,476,406 - - 4,476,406
Individually impaired - 6,078 - 6,078
Total
- - 1,607,325 1,607,325
4,476,406 6,078 1,607,325 6,089,809

2020

Internal rating grade Stage 1 Stage 2 Stage 3 Total
Individual Individual ₦'000
Performing
Standard grade ₦'000 ₦'000 ₦'000
Sub-standard grade
Non- performing 2,259,834 - - 2,259,834
Individually impaired - 15,024 - 15,024
Total
- - 2,532,442 2,532,442
2,259,834 15,024 2,532,442 4,807,300

119

NOTES TO THE FINANCIAL STATEMENTS - Continued

FOR THE YEAR ENDED 31 DECEMBER 2021

An analysis of changes in the gross carrying amount and the corresponding ECL allowance in relation

to Mortgage Loan is as follows:

Stage 1 Stage 2 Stage 3 Total
Individual Individual

₦'000 ₦'000 ₦'000 ₦'000
15,024 2,532,442 4,807,300
Gross carrying amount as at 1 January 2021 2,259,834 (8,945) 1,282,509
(925,117)
New assets originated or purchased/(derecognised or repaid) 2,216,572 - - -
- - -
Transfers to Stage 1 - - - -
- - -
Transfers to Stage 2 - - - -
- - -
Transfers to Stage 3 - 6,079 6,089,809
1,607,325
Changes due to modifications not derecognised -

Amounts written off -

Foreign exchange adjustments -

At 31 December 2021 4,476,406

Stage 1 Stage 2 Stage 3 Total
Individual Individual
₦'000
₦'000 ₦'000 ₦'000 8,296,776

Gross carrying amount as at 1 January 2020 2,620,110 391,073 5,285,593 887,809
-
New assets originated or purchased/(derecognised or repaid) 4,699,852 (376,235) (3,435,808) -
-- -
Transfers to Stage 1 - -

Transfers to Stage 2 (186) 186 - (4,377,285)
-
Transfers to Stage 3 (5,059,942) - 5,059,942
4,807,300
Changes due to modifications not derecognised - --

Amounts written off - - (4,377,285)

Foreign exchange adjustments - --

At 31 December 2020 2,259,834 15,024 2,532,442

Stage 1 Stage 2 Stage 3 Total
Individual Individual
₦'000 ₦'000
₦'000 ₦'000 773,078 787,260
0 214,901
ECL allowance as at 1 January 2021 14,182 - (394,417) 222,110
- (394,628)
New assets originated or purchased 7,209 - -
- - -
Assets derecognised or repaid (excluding write offs) (211) - - -
- - -
Transfers to Stage 1 - - 29,606 -
- - 29,606
Transfers to Stage 2 - (64,614) -
(20,240) - (84, 854)
Transfers to Stage 3 - - 558, 554 -
559,494
Impact on year end ECL of exposures - (20,240)

Change to models and inputs used for ECL calculations -
Unwind of discount (recognised in interest income) -

Provision no longer required* -

Amounts written off -

At 31 December 2021 21, 180

*Provision no longer required relates to the reversal of impairment allowance on impaired facilities
in prior year, which were fully paid down/recovered in current year.

120

NOTES TO THE FINANCIAL STATEMENTS - Continued

FOR THE YEAR ENDED 31 DECEMBER 2021

Stage 1 Stage 2 Stage 3 Total
Individual Individual
₦'000
₦'000 ₦'000 ₦'000 1,421,832
2,576,865
ECL allowance as at 1 January 2020 152,992 22,280 (236,151)

New assets originated or purchased 2,576,865 -- -
-
Assets derecognised or repaid (excluding write offs) (9,111) (22,280) (204,760) -
1,401,999
Transfers to Stage 1 - -- -
-
Transfers to Stage 2 - -- -
-
Transfers to Stage 3 (2,706,564) - 2,706,564 (4,377,285)
787,260
Impact on year end ECL of exposures - - 1,401,999

Unwind of discount (recognised in interest income) - --

Changes due to modifications not resulting in - --

Changes to models and inputs used for ECL calculations - --

Recoveries - --

Amounts written off - - (4,377,285)

At 31 December 2020 14,182 - 773,078

The decrease in ECLs of the mortgage portfolio was driven by a reduction in the gross carrying a mount
of the portfolio and movements between stages as a result of increases in credit risk and a deterioration
in economic condition.

18.1.2 Advance loans
The table below shows the credit quality and the maximum exposure to credit risk based on
the Bank’s internal credit rating system and year-end stage classification. The amounts
presented are gross of impairment allowances

2021

Internal rating grade Stage 1 Stage 2 Stage 3 Total
Individual Individual
Performing ₦'000
Standard grade ₦'000 ₦'000 ₦'000 -
Sub-standard grade
Non- performing 453,743 -- 453,743
Individually impaired - -- -
Total - -- -
- - 22,016
- 22,016 22,016
453,743 475,759

2020

Internal rating grade Stage 1 Stage 2 Stage 3 Total
Individual Individual ₦'000
Performing
Standard grade ₦'000 ₦'000 ₦'000 560,653
Sub-standard grade -
Non- performing 560,653 -- -
Individually impaired - --
Total - -- 22,185
- - 22,185 582,838
- 22,185
560,653

121

NOTES TO THE FINANCIAL STATEMENTS - Continued

FOR THE YEAR ENDED 31 DECEMBER 2021

An analysis of changes in the gross carrying amount and the corresponding ECL allowance in
relation to Advance loan is, as follows:

Stage 1 Stage 2 Stage 3 Total
Individual Individual

Gross carrying amount as at 1 January 2021 ₦'000 ₦'000 ₦'000 ₦'000
New assets originated or purchased/(Derecognised or repaid) 560,653 - 22,185 582,838
(106,910) - (107,079)
Transfers to Stage 1 - (168)
Transfers to Stage 2 - - - -
Transfers to Stage 3 - - - -
Amounts written off - - - -
Foreign exchange adjustments - - - -
At 31 December 2021 - - - -
453,743 475,759
22,017

Stage 1 Stage 2 Stage 3 Total
Individual Individual
₦'000 ₦'000
₦'000 ₦'000 20,144 541,231
- 41,607
Gross carrying amount as at 1 January 2020 521,087 - (13)
- - -
New assets originated or purchased/(Derecognised or repaid) 41, 620 - - -
- -
Transfers to Stage 1 - - 2,054 -
- - -
Transfers to Stage 2 - - - 582,838

Transfers to Stage 3 (2,054) 22,185

Amounts written off -

Foreign exchange adjustments -

At 31 December 2020 560,653

Stage 1 Stage 2 Stage 3 Total
Individual Individual
₦'000
₦'000 ₦'000 ₦'000
20,417
ECL allowance as at 1 January 2021 11 - 20,406 35, 421
- 1, 115 (3,211)
New assets originated or purchased 34, 306 - (3,211)
- -
Assets derecognised or repaid (excluding write offs) - - - -
- - -
Transfers to Stage 1 - - - -
- - -
Transfers to Stage 2 - - - -
- - -
Transfers to Stage 3 - - - -
Impact on year end ECL of exposures - - - -
- - - 52,627
transferred between stages during the year 18, 310

Unwind of discount (recognised in interest income) -

Changes due to modifications not resulting in -

Changes to models and inputs used for ECL calculations -

Amounts written off -

At 31 December 2021 34, 317

122

NOTES TO THE FINANCIAL STATEMENTS - Continued

FOR THE YEAR ENDED 31 DECEMBER 2021

Stage 1 Stage 2

Individual Individual Stage 3 Total
₦'000 ₦'000
₦'000 ₦'000

ECL allowance as at 1 January 2020 - - 18,475 18,475
-- 2,464
New assets originated or purchased 2,464 -- (1,930)
--
Assets derecognised or repaid (excluding write offs) (1,930) -- -
- 523 -
Transfers to Stage 1 - - 1,408 -
1,408
Transfers to Stage 2 - --
-- -
Transfers to Stage 3 (523) -- -
Impact on year end ECL of exposures - -- -
- 20,406 -
transferred between stages during the year 20,417

Unwind of discount (recognised in interest income) -
Changes due to modifications not resulting in
-
Changes to models and inputs used for ECL calculations -

Amounts written off -

At 31 December 2020 11

The increase ECLs of the advance portfolio was driven by an increase in the gross carrying amount of
the portfolio and movements between stages as a result of increases in credit risk and a deterioration
in economic condition.

18.1.3 National Housing Fund
The table below shows the credit quality and the maximum exposure to credit risk based
on the Bank’s internal credit rating system and year-end stage classification. The amounts
presented are gross of impairment allowances.

2021

Internal rating grade Stage 1 Stage 2 Stage 3 Total
Individual Individual ₦'000
Performing
Standard grade ₦'000 ₦'000 ₦'000 129,949
Sub-standard grade 5,776
Non- performing 129,949 - - -
Individually impaired - 5,776 -
Total - - 80,557
- - 80,557 216,282
Internal rating grade - 80,557
129,949 5,776 Total
Performing ₦'000
Standard grade Stage 1 2020
Sub-standard grade Individual 160,906
Non- performing Stage 2 Stage 3 10,307
Individually impaired ₦'000 Individual -
Total 64,272
160,906 ₦'000 ₦'000
- 235,485
- - -
- 10,307 -
-
160,906 - 64,272
- 64,272
10,307

123

NOTES TO THE FINANCIAL STATEMENTS - Continued

FOR THE YEAR ENDED 31 DECEMBER 2021

An analysis of changes in the gross carrying amount and the corresponding ECL allowances in
relation to National Housing Fund is, as follows:

Stage 1 Stage 2 Stage 3 Total
Individual Individual

₦'000 ₦'000 ₦'000 ₦'000
10,307 64,272 235,485
Gross carrying amount as at 1 January 2021 160,906 (4,531) 16,285 (19,203)

New assets originated or purchased/(Derecognised or repaid) (30,957) - - -
- - -
Transfers to Stage 1 - - - -
- - -
Transfers to Stage 2 - - - -
- - -
Transfers to Stage 3 - 5,776 80,557 216,282

Changes due to modifications not derecognised -

Amounts written off -

Foreign exchange adjustments -

At 31 December 2021 129,949

Stage 1 Stage 2 Stage 3 Total
Individual Individual
₦'000 ₦'000
₦'000 ₦'000 158,583 357,332
11,704 (105,218) (73,003)
Gross carrying amount as at 1 January 2020 187,045 (1,397)
- -
New assets originated or purchased/Assets derecognised or repaid 33,612 - - -
- 59,644 -
Transfers to Stage 1 - - - -
- (48,737) (48,844)
Transfers to Stage 2 - - - -
- 64,272 235,485
Transfers to Stage 3 (59,644) 10,307

Changes due to modifications not derecognised -

Amounts written off (107)

Foreign exchange adjustments -

At 31 December 2020 160,906

Stage 1 Stage 2 Stage 3 Total
Individual Individual
₦'000 ₦'000
₦'000 ₦'000 29,810 29,854
-
ECL allowance as at 1 January 2021 44 - - 8,588
- - -
New assets originated or purchased 8, 588 - - -
- - -
Assets derecognised or repaid (excluding write offs) - - - -
- - -
Transfers to Stage 1 - - - -
- - -
Transfers to Stage 2 - - (29,606)
(29,606)
Transfers to Stage 3 - - (248)
- - (248)
Impact on year end ECL of exposures - - -
(44)
Unwind of discount (recognised in interest income) - 8,588

Changes due to modifications not resulting in -

Changes to models and inputs used for ECL calculations -

Provision no longer required* -
Amounts written off -
At 31 December 2021 8, 632

*Provision no longer required relates to the reversal of impairment allowance on impaired facilities
in prior year, which were fully paid down/recovred in current year.

124

NOTES TO THE FINANCIAL STATEMENTS - Continued

FOR THE YEAR ENDED 31 DECEMBER 2021

Stage 1 Stage 2 Stage 3 Total
Individual Individual
₦'000 ₦'000
₦'000 ₦'000 16,060 16,891
263 29,842
ECL allowance as at 1 January 2020 568 - - (6,057)
(5,345)
New assets originated or purchased 29,842 (263) -
- - -
Assets derecognised or repaid (excluding write offs) (449) - - -
- 29,810 16,438
Transfers to Stage 1 - - 16,438 -
- - -
Transfers to Stage 2 - - - 21,584
- 21,584 (48,844)
Transfers to Stage 3 (29,810) - (48,737) 29,854
- 29,810
Impact on year end ECL of exposures -

Unwind of discount (recognised in interest income) -

Changes due to modifications not resulting in -

Changes to models and inputs used for ECL calculations -

Amounts written off (107)

At 31 December 2020 44

18.2 Analysis by sector (Gross) 2021 2020
Construction Loans ₦'000 ₦'000
Mortgage FMBN bonds 2,059,897 2,327,500
Mortgage Home Loans 3,846 3,664
NHF Loans 4,001,196 2,251,063
School Loans 216,282 231,821
Staff Mortgage Loan 5,075 208,845
Staff Personal Loan 37,574 14,071
Staff Share Loan 2,430 10,801
Other Loans 382,249 406,816
73,301 171,042
6,781,850 5,625,623

18.3 Analysis by security (gross) 2021 2020
Secured against real estate ₦'000 ₦'000
Other security 5,373,845 4,848,464
Unsecured 1,401,981 756,315
6,024 20,844
6,781,850 5,625,623

Other security consists of assets with other securities such as equities, salary domiciliation, third party
guarantee and cash in lien.

125

NOTES TO THE FINANCIAL STATEMENTS - Continued

FOR THE YEAR ENDED 31 DECEMBER 2021

18.4 Loans and advances general terms and conditions

Interest rate 2021 Interest rate 2020
₦'000 ₦'000

Tenor 8.4 4,267,783 10.1 4,077,746
1 to 5 years 8.8 1,369,921 7.8 957,194
6 to 10 years 9.7 577,982 6.3 560,224
11 to 15years 8.3 566,164 6 30,459
Above 15years
6,781,850 5,625,623

The rates are average rate of interests per annum for the loans and advances within the different
tenor ranges.

19 Financial investments - securities at FVTPL 2021 2020

₦'000 ₦'000

Quoted equity investments 324,333 258,778
Unquoted Equity Investment 205,000 -
Fair value gain or loss on financial investments at FVTPL (32,222)
70,556
497,111 329,334

Equity investment represents shares in Universal Insurance Plc and the Nigeria Mortgage Refinancing
Company (NMRC). These shares are quoted on the National Association of Securities Dealer.

20 Financial Investments- securities at amortised cost 2021 2020
Treasury bills ₦'000 ₦'000
Government Bonds
Corporate bonds - -
1,825,936
Allowance for impairment on Investment Securities at amortised cost 324,999 1,024,481
1,032,371 2,850,417
1,357,370
(24,053)
(22,488)
2,826,364
1,334,882

The securities measured at amortised cost as disclosed here consist of investment in government
bonds (federal and state) and corporate bond. The outstanding balance above includes interest
accrued. For the purpose of cashflows statement, actual cash outflow for the purchase of financial
investment at amortised cost is N1,357,370 (2020: N2,850,417).

20.1 Impairment allowance on securities at amortised cost

The table below shows the credit quality and the maximum exposure to credit risk based
on the Bank’s internal credit rating system and year-end stage classification. The amounts
presented are gross of impairment allowances.

126

NOTES TO THE FINANCIAL STATEMENTS - Continued

FOR THE YEAR ENDED 31 DECEMBER 2021

2021

Internal rating grade Stage 1 Stage 2 Stage 3 Total
Individual Individual
Performing ₦'000
Standard grade ₦'000 ₦'000 ₦'000 -
Sub-standard grade - - -
Non- performing - - 1,357,370
Individually impaired 1,357,370 - - -
Total - - - -
- - - -
- - -
1,357,370
1,357,370

2020

Internal rating grade Stage 1 Stage 2 Stage 3 Total
Individual Individual
Performing ₦'000
Standard grade ₦'000 ₦'000 ₦'000 -
Sub-standard grade 2,850,417 -- -
Non- performing - - 2,850,417
Individually impaired 2,850,417 -- - -
Total -- - -
-- - -
- -
2,850,417

An analysis of changes in the gross carrying amount and the corresponding ECL allowance is, as follows:

Stage 1 Stage 2 Stage 3 Total
Individual Individual
₦'000 ₦'000
₦'000 ₦'000 - 2,850,417
- -
Gross carrying amount as at 1 January 2021 2,850,417 - - -
- - (1,493,047)
New assets originated or purchased - -
- - -
Assets derecognised or repaid (excluding write-offs) (1,493,047) - - -
- - -
Accrued interest - - - -
- - -
Transfers to Stage 1 - - - -
- -
Transfers to Stage 2 - 1,357,370

Transfers to Stage 3 -

Changes due to modifications not derecognised -

Amounts written off -

Foreign exchange adjustments -

At 31 December 2021 1,357,370

127

NOTES TO THE FINANCIAL STATEMENTS - Continued

FOR THE YEAR ENDED 31 DECEMBER 2021

An analysis of changes in the gross carrying amount and the corresponding ECL allowance is, as follows:

Stage 1 Stage 2 Stage 3 Total
Individual Individual
₦'000 ₦'000
Gross carrying amount as at 1 January 2020 ₦'000 ₦'000 - 648,316
New assets originated or purchased 648,316 - - 2,825,530
Assets derecognised or repaid (excluding write-offs) 2,825,530 - - (648,316)
Accrued interest (648,316) - -
Transfers to Stage 1 - - 24,887
Transfers to Stage 2 24,887 - - -
Transfers to Stage 3 - - - -
Changes due to modifications not derecognised - - - -
Amounts written off - - - -
Foreign exchange adjustments - - - -
At 31 December 2020 - - - -
- -
2,850,417
2,850,417

ECL allowance as at 1 January 2021 Stage 1 Stage 2 Stage 3 Total
New assets originated or purchased Individual Individual
Assets derecognised or repaid (excluding write offs) ₦'000 ₦'000
Transfers to Stage 1 ₦'000 ₦'000 - 24,053
Transfers to Stage 2 24,053 - -
Transfers to Stage 3 - - -
At 31 December 2021 - - - (1,565)
(1,565) - -
- - -
- - - -
- - -
- 22,488
22,488

ECL allowance as at 1 January 2020 Stage 1 Stage 2 Stage 3 Total
New assets originated or purchased Individual Individual
Assets derecognised or repaid (excluding write offs) ₦'000 ₦'000
Transfers to Stage 1 ₦'000 ₦'000 - -
Transfers to Stage 2 - - -
Transfers to Stage 3 - - 24,053
At 31 December 2020 24,053 - - -
- - - -
- - - -
- - - -
- -
24,053
24,053

128

NOTES TO THE FINANCIAL STATEMENTS - Continued

FOR THE YEAR ENDED 31 DECEMBER 2021

21 Other assets 2021 2020
₦'000 ₦'000
Financial assets:
Sundry receivables 76,762 30,375
Balance with other financial institutions - 151,544
181,919
Non financial assets: 76,762
Prepayments and deferred expense 14,059
Witholding tax receivable 35,095 65,949
Stationery and stocks 190,873
9,738
9,332 89,746
235,300

Total Gross amount 312,062 271,665
Allowance for impairment of other assets - (note 21.1) (2,379) (153,923)
309,683
117,742

Sundry receivables is made up of fees receivable and the resultant provision for the year is detailed in Note 21.1
Other assets are due within 3 months of the year end; hence, their carrying value approximate to their fair value.

21.1 Movement of allowance for impairment of other assets 2021 2020
₦'000 ₦'000

Balance at the beginning of year 153,923 152,293
Written off (151,544) -
Provision for the year
End of the year - 1,630

22. Property and Equipment 2,379 153,923

Cost Land and Office furniture Computer Motor Total
At 1 January 2021 building and equipment equipment vehicles
Additions ₦'000
Disposal ₦'000 ₦'000 ₦'000 ₦'000

At 31 December 2021 1,156,972 201,520 129,415 196,219 1,684,126
6,329 33,297 34,596 35,145 109,367
(22,137) (32,855) (54,992)
1,163,301 -
212,680 131,156 1,738,501
231,364

Accumulated depreciation 195,417 159,003 107,139 130,052 591,611
At 1 January 2021 22,915 12,633 8,475 27,731 71,754
Charge for the year - (52,732)
Disposals - (20,197) (32,535)
218,332 157,783 610,633
At 31 December 2021 151,439 83,079
1,156,972
Cost - 185,373 107,315 253,709 1,703,369
At 1 January 2020 - 19,573 22,100 14,000 55,673
Additions
Disposal 1,156,972 (3,426) - (71,490) (74,916)

At 31 December 2020 201,520 129,415 196,219 1,684,126

Accumulated depreciation 172,519 150,670 103,764 181,896 608,849
At 1 January 2020 22,898 11,759 3,375 19,646 57,678
Charge for the year - (71,490)
Disposals - (3,426) 130,052 (74,916)
195,417 159,003 107,139 591,611
At 31 December 2020 73,581
944,969 61,241 48,077 1,127,868
NBV at 31 December 2021

NBV at 31 December 2020 961,555 42,517 22,276 66,167 1,092,515

* There were no restrictions on title, no asset pledge as security for liabilities and no contractual
commitment to purchase PPE during the year.

129

NOTES TO THE FINANCIAL STATEMENTS - Continued

FOR THE YEAR ENDED 31 DECEMBER 2021

23 Intangible assets 2021 Total 2020 Total
₦'000 ₦'000
Cost Computer Computer
At 1 January Software Software
Addition ₦'000 ₦'000
At 31 December
135,637 135,637 124,031 124,031
Accumulated Amortisation - - 11,606 11,606
At 1 January 135,637 135,637
Amortisation charge 135,637 135,637
At 31 December
119,018 119,018 112,516 112,516
Carrying amount 4,613 4,613 6,502 6,502
119,018 119,018
123,631 123,631
16,619 16,619
12,006 12,006

The intangible assets consist wholly of the Bank's computer software.
The Bank performed its annual impairment test as at 31 December 2021 and 2020, and there were no
indicators of impairment of assets held as at these dates.

24 Non-current assets-held for sale

In the year ended 31 December 2013, the CBN stipulated that the Bank should commence disposal of
all real estate developments in its books. Consequently, the Bank commenced plans to dispose of
these assets. The criteria to classify the assets as non-current assets held for sale were first met as at
31 December 2013. Sale of all the assets have not been completed at the year end due to
circumstances beyond the Bank's control, however significant portion of the assets have been sold
and the Bank is committed to dispose -off the remaining assets within the next 12 months. The bank is
in advance stage of selling the properties to willing parties. Negotiations have commenced and part
payment received for some of the properties.

As at 1 January 2021 2020
₦'000 ₦'000
Returned assets
Disposal 264,681 334,681
As at 31 December 8,185 -

(116,430) (70,000)
156,436 264,681

130

NOTES TO THE FINANCIAL STATEMENTS - Continued

FOR THE YEAR ENDED 31 DECEMBER 2021

25 Deposits from customers 2021 2020
₦'000 ₦'000
Demand Deposits
Savings Deposits 1,640,644 3,581,097
Term Deposits 3,413,034 2,084,120
16,223,226 8,964,223
21,276,904 14,629,440

Within one year 21,192,535 14,542,607
More than one year 84,369 86,833

21,276,904 14,629,440

26 Other liabili es 2021 2020
₦'000 ₦'000
Financial Liabilities
Accounts payable 377,003 200,194
Lease liability 14,224 7,186

Non- Financial Liabilities 391,227 207,380
Other liabilities
Information technology levy 12,622 34,240
Staff pension contribution 712 1,487
Rent received in advance 948 1,394
462 462

14,744 37,583

405,971 244,963

Terms and Conditions of other liabilities
Accounts payable and other liabilities are made up of various expenses such as audit fee, rates, etc.
which have been incurred during the year but remained unpaid as at the year end. The Bank normally
settles such expenses within one to three months from the day of receipt of service to which it
relates.

Lease liability is in respect of lease of office space for some of the Bank's branches. The Bank's
enforceable right under the Nigerian law is to the extent of the amount paid. The lease liability relates
to accruals of the short term leases and this will expire within the next 12 months.

Information technology levy represents 1% of profit before tax in line with section 12(2) of the NITDA
Act which became effective in 2007.

The Bank and its employees make a joint contribution of 10% and 8%, respectively, on each of the
qualifying employee’s salary, housing and transport allowance to each employee's retirement
savings account maintained with their nominated pension fund administrators.
The Bank's liabilities in respect of the defined contribution scheme are charged against the profit or
loss of the year in which they become payable. Payments are made to pension fund administration
companies who are financially independent of the Bank.

Defined contribution scheme 2021 2020
Pension liability N'000 N'000
948 1,394

131

NOTES TO THE FINANCIAL STATEMENTS - Continued

FOR THE YEAR ENDED 31 DECEMBER 2021

27 Due to National Housing Fund 2021 2020
₦'000 ₦'000

Due to National Housing Fund 218,135 269,300

The funds are obtained from the Federal Mortgage Bank of Nigeria (“FMBN”) for the purpose
of on-lending of this fund to qualifying members of the National Housing Fund loan scheme.
The funds are obtained at 4% per annum from FMBN and issued to customers at 6% per annum.

28 Deferred tax liabilities

Deferred income taxes are calculated on all temporary differences under the liability method
using an effective tax rate of 30% (2020: 30%).

28.1 Deferred tax liabilities are attributable to the following: 2021 2020
₦'000 ₦'000
Accelerated tax depreciation
Non-current assets held for sale 280,872 251,667
Allowances for loan losses 2,513 2,633
Other assets
Net fair value gain on financial asset (54,756) (31,384)
Unutilised capitalised allowance 46,210 46,210
Tax loss carried forward - -
Unrecognised deferred tax assets
(197,526) (318,419)
(1,181,693) (1,554,965)
1,104,380
1,604,258
-
-

28.2 Movements in temporary differences during the year:

Accelerated depreciation At beginning Recognised Recognised in At end of
Non-current assets held for sale of year in equity profit or loss year
Allowances for loan losses ₦'000 1 January ₦'000
Other assets 2021 29,205 ₦'000
Net fair value gain on financial asset 251,667 ₦'000 (120) 280,872
Unutilised capitalised allowance 2,633 - (23,372)
Tax loss carried forward - 2,513
Unrecognised deferred tax assets (31,384) - - (54,756)
46,210 120,893
- - 373,272 46,210-
(499,878) -
(318,419) -
(1,554,965) (197,526)
- (1,181,693)
1,604,258 1,104,380
-
- -
-

-

-

132

NOTES TO THE FINANCIAL STATEMENTS - Continued

FOR THE YEAR ENDED 31 DECEMBER 2021

29 Share capital 2021 2020
Unit'000 Unit'000

29.1 Authorised 12,000,000 12,000,000
Ordinary shares of 50 kobo each

There is no movement in the authorised share capital during the year.

29.2 Issued and fully paid 2021 2020
Unit'000 Unit'000

Ordinary shares of 50k each 10,153,846 6,461,538

Issued and fully paid ₦'000 ₦'000
5,076,923 3,230,769

29.2.1 Movement in share capital 2021 2021 2020 2020
At 1 January Unit'000 ₦'000 Unit'000 ₦'000
Share issued at 50kobo each 6,461,538 3,230,769 4,200,000 2,100,000
At 31 December 3,692,308 1,846,154 2,261,538 1,130,769
10,153,846 5,076,923 6,461,538 3,230,769

During the year, the Bank increased its issued share capital by 3.6billion shares at 50 kobo each.

30 Share premium 2021 2020
Balance as at 31 December ₦'000 ₦'000

5,117,137 4,008,277

30.1 Movement in share premium 2021 2020
At 1 January ₦'000 ₦'000
Share premium on issued shares at 32k each 4,008,277 2,877,126
Transaction costs on share issue 1,181,539 1,243,846
At 31 December (72,678) (112,695)
5,117,138 4,008,277

Share premium reserves represents the excess of share issued price over the nominal value per share.
The movement in share premium is as a result of the additional shares issued.

133

NOTES TO THE FINANCIAL STATEMENTS - Continued

FOR THE YEAR ENDED 31 DECEMBER 2021

30.2 For cashflow purposes, 2021 2020
Proceeds from share issue ₦'000 ₦'000
Transaction costs on share issue 3,027,692 2,374,615
(72,678) (112,695)

31 Accumulated losses: 2021 2020
₦'000 ₦'000
Balance at beginning of year
Profit/(Loss) for the year (5,029,743) (2,093,350)
Transfer to Statutory Reserve 622,198 (4,301,619)
Transfer from/ (to) regulatory risk reserve -
Balance at end of year -
(509,187) 1,365,226
(4,916,732) (5,029,743)

32 Statutory reserve:

Undistributable earnings required to be kept in line with the central bank of

Nigeria's Prudential guideline. 2021 2020
₦'000
₦'000 298,440

At the beginning of the year 298,440 -
298,440
Transfer from profit or loss account -

At the end of the year 298,440

Nigerian banking regulations require the Bank to make an annual appropriation to a statutory reserve.
As stipulated by section 16(1) of the Banks and Other Financial Institutions Act of Nigeria, an
appropriation of 20% of profit after tax is made if the statutory reserve is less than paid-up share
capital and 10% if the statutory reserve is greater than the paid-up capital.

33 Additional cash flow information 2021 2020
₦'000 ₦'000

Cash and cash equivalents 15,035 2,020
Cash on hand (note 15) 6,776,413 493,453
Balances with other banks 17,699,660 8,357,064
Fixed placement with banks (5,577,842)
Bank Overdraft 18,913,265 -
8,852,537

The deposits with the Central Bank and FMBN (see Notes 16 and 17) are not available to finance the
Bank’s day–to–day operations and, therefore, are not part of cash and cash equivalents.

The tenor for the fixed placements ranges between less than 90days

33.1 Change in Operating assets 2021 2020
Net change in loans and advances to customers ₦'000 ₦'000
Net change in other assets (1,156,227) (856,414)
Net change in cash reserve with CBN (191,941) 93,816
Net change in financial instruments at amortised cost (176,000) (162,746)
1,493,046 (2,177,214)
(31,122) (3,102,558)

134

NOTES TO THE FINANCIAL STATEMENTS - Continued

FOR THE YEAR ENDED 31 DECEMBER 2021

Note 2021 2020
₦'000 ₦'000
33.2 Change in operating liabilities
Net change in due to customers 6,647,464 8,288,843
Net change in due to National Housing Fund (51,165) (56,535)
Net change in other liabilities 161,008 74,325

6,757,307 8,306,633

33.3 Adjustment for non-cash items

Depreciation of property and equipment 11 71,754 57,678

Amortisation of intangible assets 23 4,613 6,502

Impairment charge on loans and advances 9 (216,822) 3,806,463

Impairment charge on cash balances with central bank 9 (2,117) 1,435

Impairment charge on due from banks 9 40,385 54,346
Impairment charge on financial assets at amortised cost 9
Impairment charge on other assets 9 (1,565) 24,053
- 1,630-
Accrued interest on financial assets designated at amortised cost
- (24,887)-

Loss on sale of non-current assets held for sale 5,570 860

Loss on disposal of property --

Fair value gain on equity instruments at FVPL 32,222 (70,556)

Dividend income received (20,501) (21,500)

Loss on sale of property and equipment 1,582 (2,005)

(84,879) 3,834,019

33.4 Operational cashflows from interest * 2,272,633 588,690
Interest paid 4,713,690 1,399,438
interest received

* Cash flows from operating interest is analysed into interest paid and received.
This is also reflected for prior year.

34 Contingencies and commitments

34.1 Guarantees and other commitments

The Bank has no guarantees and other commitments as at 31 December 2021 (2020:Nil).

34.2 Capital commitments
At the year end, the Bank had no capital commitment.

34.3 Claims and litigations
The Bank in the ordinary course of business is presently involved in two (2) claims and
litigations relating to two (2) former employees. Maximum exposure for the Bank is
N48,500,000. Management does not believe that these claims and litigations will be
successful. Thus, no provision has been made.(2020: N150,000,000).

135

NOTES TO THE FINANCIAL STATEMENTS - Continued

FOR THE YEAR ENDED 31 DECEMBER 2021

35 Operating leases

Bank as lessee
The Bank entered into commercial leases for premises. These leases have an average life of one year but
they are renewed annually. there are no restriction placed upon the leases by entering into these leases.

Below is the undiscounted potential future rental payments relating to periods following the lease term
of a year.

Due within 1 year 2021 2020
Due 2-5 years ₦'000 ₦'000
Due greater than 5 years 7,038 7,808

- -
- -
7,038 7,808

There is no separate amount for minimum lease payment, contingent rents and sublease payment.
None of the leases are sub-leased during the year. There is no restriction imposed by the lease
arrangement.

Bank as lessor
The Bank acts as lessor of commercial premises. These leases have an average life of one year with no
renewal option. There are no restrictions placed upon the lessee by entering into these leases.

2021 2020
₦'000 ₦'000

Due within one year --
Due within two-five years --

As at 31 December 2021, there are no future minimum lease payments under the non-cancellable
operating leases.
The Bank has received rental income in advance for properties and has been capitalised in other
liabilities as N462,000 (2020: N462,000).

The total rent recognised as income during the year is N1.702million (2020: N10.94million).

The properties are occupied by the Bank for its business operations with insignificant space
being rented to third parties.

136

NOTES TO THE FINANCIAL STATEMENTS - Continued

FOR THE YEAR ENDED 31 DECEMBER 2021

137
36 Related party disclosures

An analysis of insider related credit granted to companies and individuals with whom the key management of the Bank are related or in which the key management have related
interests are as stated below. Credit facilities were provided by the Bank to related parties on commercial terms. Loan and advances to related parties at the reporting date, which
are all performing amounted to N405.8million (2020: N347.8million)

Name of Borrower Relationship to Amount Amount Interest Interest Facility type Status Nature of
Bank outstanding outstanding paid paid security
2021 2020
2021 2020
₦'000 ₦'000
₦'000 ₦'000

Rosabon Investment Company Bank's former chairman is - 8,107 488 5,458 Working capital Performing Equitable mortgage/Cash
105,671 153,700
Limited majority shareholder and

director of the Company

Infant Jesus Academy Bank's former MD/CEO is a 17,910 24,171 Mortgage loan Performing Legal mortgage
Director of the School

Chike Chiemeke A brother to the Bank's - - - 866 Mortgage loan Performing Legal mortgage
former MD/CEO

Oculus Pharmacare Ltd. The Chairman is a director 121,650 - 17,855 - Mortgage loan Performing Legal mortgage
Osnon Capital Limited of the company. 178,475 185,978 32,586 5,557 Housing loan Performing Legal mortgage
The Bank's Director (Nonso
Okpala is a Director of the 405,796
Company)

347,785 68,839 36,052

The Bank rents properties for two of its branches from the Bank's former chairman who retired at the end of February 2020. The rental charge for the
current year is N5,500,000 (2020: N5,500,000) and the amount payable at the year end is N11,916,727.04 (2020: N6,416,710).

Terms and conditions of transactions with related parties
The above-mentioned outstanding balances arose from the ordinary course of business. The interest rates charged to and by related parties are at normal
commercial rates. Outstanding balances at the year-end are fully secured for the year ended 31 December 2021 and 2020, all related party facilities were
performing at year end as such therewere no amounts provided for.

NOTES TO THE FINANCIAL STATEMENTS - Continued

FOR THE YEAR ENDED 31 DECEMBER 2021

36.1 Key management compensation 2021 2020
Salaries and other short term employee benefits ₦'000 ₦'000
Post -employment benefits 68,367 75,832
4,078 4,349
72,445 80,181

36.2 Directors emoluments 2021 2020
Fees and sitting allowances ₦'000 ₦'000
Executive Compensation 31,917 23,638
Defined contribution scheme 68,367 75,832
Other directors expenses 4,078 4,349
10,190 8,620
114,552 112,439

The highest paid Director's compensation 26,847 21,381

37 Events after reporting date

There were no subsequent event which could have had a material effect on the financial position and
performance of the bank as at 31 December 2021 which had not been adequately provided for or
disclosed.

38 Dividend payable

No dividend was paid or proposed for the year (2020: Nil).

39 Compliance with banking regulations

The Bank complied with all CBN regulations during the year, there were no contraventions to be
reported during the period.

40 Regulatory Risk Reserve

The Regulatory Body, the Central Bank of Nigeria (CBN) stipulates that provisions for loans recognized
in the profit or loss account shall be determined based on the requirements of IFRS. The IFRS provisions
should be compared with provisions determined under prudential guidelines and the expected
impact/changes in general reserve should be treated as follows:
(I) Prudential Provisions is greater than IFRS provisions; transfer the difference from the retained

earnings to a non-distributable regulatory reserve.

(ii) Prudential Provisions is less than IFRS provisions; the excess charges resulting should be transferred
from the regulatory risk reserve account to the retained earnings to the extent of the non-
distributable reserve previously recognized.

138

NOTES TO THE FINANCIAL STATEMENTS - Continued

FOR THE YEAR ENDED 31 DECEMBER 2021

Regulatory risk reserve: 2021 2020
Balance at beginning of the year ₦'000 ₦'000
Transfer (from) /to retained earnings
847,298 2,212,524
509,187 (1,365,226)
1,356,485
847,298

The Regulatory Risk Reserve accounts for the difference between the allowance for impairment on
loans and advances computed based on the Central Bank of Nigeria Prudential Guidelines
compared with the expected credit loss model used in calculating the impairment under IFRS.

STATEMENT OF PRUDENTIAL ADJUSTMENTS 2021 2020
₦'000 ₦'000
PRUDENTIAL GUIDELINES PROVISION:
General 45,991 36,523
Specific 1,931,203 1,732,143
Total 1,977,194 1,768,666

IFRS PROVISIONS: 620,709 921,368
620,709 921,368
Expected credit loss allowance
1,356,485 847,298
IFRS impairment allowance lower than prudential provision

139



OTHER NATIONAL
DISCLOSURES

141

STATEMENT OF VALUE ADDED

FOR THE YEAR ENDED 31 DECEMBER 2021

2021 % 2020 %
₦'000 ₦'000
Gross income 3,683,143 1,519,445 100
Interest expense (1,683,943) (539,378)
1,999,200 980,067 (11)
Impairment charge (0)
Brought-in-materials and services-local 180,120 (3,887,927)
Value added/(consumed) (2)
(851,466) (911,391) 113
Applied to pay: 100
1,327,854 100 (3,819,251)
Employee as wages, salaries and pensions
Income tax 590,425 44 414,441
38,865 3 3,747
Retained in business:
76,367 6 64,180
Depreciation and amortisation
Profit/(Loss) for the year 622,198 47 (4,301,619)

Value added/(consumed) 1,327,855 100 (3,819,251)

Value added / (consumed) represents the additional wealth which the company has been
able to create by its own and employees efforts . This statement shows the allocation of that
wealth among the employees, shareholders, government and that retained for the future
creation of more wealth.

This information is presented for the purpose of the requirements of the Companies and
Allied Matters Act 2020.

142

FIVE-YEAR FINANCIAL SUMMARY

STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED

31 DECEMBER

2021 2020 2019 2018 2017
₦'000 ₦'000 ₦'000 ₦'000 ₦'000

Total Operating Income 1,999,201 980,067 886,722 903,583 919,215
Impairment charge for loans and other assets 180,120 (3,887,927) (79,558) (566,743) (167,938)
Operating expenses (1,390,012) (859,107) (973,320) (929,184)
(1,518,258)

Profit/(Loss) before income tax 661,063 (4,297,872) (51,943) (636,480) (177,907)

Income tax expense (38,865) (3,747) (10,693) (29,039) (34,468)
Profit/(Loss) for the year 622,198 (4,301,619) (62,636) (665,519) (212,375)

Other comprehensive income

Other comprehensive income that will not be reclassified to profit or loss in subsequent period: - -- --
Reclassification of net loss to income statement - -- --

Total comprehensive Profit/(loss) for the year 622,198 (4,301,619) (62,636) (665,519) (212,375)

Profit/(Loss) on earnings per share (Kobo) - Basic and diluted 8.86 (62.65) (1.49) (15.85) (5.06)

143 Profit/(Loss) on earnings per share (basic) are based on the profit/(loss) after tax and weighted number of ordinary shares in issue and paid up at
the end of every accounting year.

FIVE-YEAR FINANCIAL SUMMARY

STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER

Assets 2021 2020 2019 2018 2017
₦'000 ₦'000 ₦'000 ₦'000 ₦'000

Cash on hand 15,035 2,020 785 986 2,687

Cash balances with central bank 467,891 8,793,209 1,831,405 766,997 782,007

Due from banks 24,378,380 289,774 128,463 116,337 115,507

Loans and advances 6,161,141 4,788,092 7,738,141 7,288,241 7,458,506

Financial Investments - available for sale -- - - 207,500

Financial investments - securities at FVTPL 497,111 329,334 258,778 258,778 -

Financial Investments- securities at amortised cost 1,334,882 2,826,364 648,316 --

Other assets 309,683 117,742 213,188 81,834 64,128

Property and equipment 1,127,868 1,092,515 1,094,520 1,060,278 1,084,748

Intangible assets 12,006 16,619 11,515 21,466 32,176

Non-current assets held for sale 156,436 264,681 334,681 2,368,626 2,493,564

Total Assets 34,460,433 18,520,350 12,259,792 11,963,543 12,240,823

Liabilities and equity 5,577,842 - - - -
Due to financial institutions 6,340,597 5,898,319 5,356,098
Deposits from customers 21,276,904 14,629,440
Current income tax liability 27,982 32,289 37,434
Other liabilities 49,327 21,606 170,638 216,320 232,492
Borrowings
Due to National Housing Fund 405,971 244,963 - 5,712 14,670
325,835 353,527 374,237
-- 6,865,052 6,506,167 6,014,931

218,135 269,300

27,528,179 15,165,309

Equity 5,076,923 3,230,769 2,100,000 2,100,000 2,100,000
Share capital 5,117,138 4,008,277 2,877,126 2,877,126 2,877,126
Share premium (191,496)
Accumulated losses (4,916,732) (5,029,743) (2,097,353) (1,328,039) 298,440
Statutory reserve 298,440 298,440 298,440 298,440 1,141,822
Regulatory risk reserve 1,356,485 847,298 2,216,527
Total equity 1,509,849 6,225,892
6,932,253 3,355,041 5,394,740 5,457,376
Total liabilities and equity
34,460,433 18,520,350 12,259,792 11,963,543 12,240,823

144

NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the 30th Annual General Meeting of Abbey Mortgage Bank Plc will be held at No. 23 Karimu Kotun Street, Victoria Island,
Lagos on Tuesday the 19th day of July 2022 at 11:00 a.m.in the forenoon to transact the following businesses.

ORDINARY BUSINESS
1. To lay before the meeting the Audited Financial Statements for the year ended 31st December, 2021 together with the Reports of the Directors, Auditors,

Audit Committee and Board Appraisers thereon.
2. To elect/re-elect Directors
3. To authorize the Directors to fix the remuneration of the Auditors for the 2022 financial year
4. To disclose the remuneration of Managers
5. To elect members of the Audit Committee

SPECIAL BUSINESS
6. To approve the remuneration of Directors
7. To consider and if thought fit pass the following as an Ordinary Resolution:

(i) “That pursuant to section 868 of the Companies and Allied Matters Act 2020 (CAMA) which defines “share capital to mean the “issued share capital of
a company at any given time” the Directors be and are hereby authorized to take steps to comply with CAMA and Regulation 13 of the Companies
Regulations 2021 as they relate to the unissued shares currently standing in the capital of the company including the cancellation of the unissued
shares of the company.”

(ii) That the Directors be and are hereby authorized to do all such acts or take all such actions (including the filing of all such documents that may be
required by the Corporate Affairs Commission and all other relevant regulatory agencies) necessary and incidental to the effectuation of the
foregoing resolution.

(iii) That Clause 6 of the Company's Memorandum and Articles of Association be altered to give effect to Resolution 7 (i) by replacing the words
“authorized share capital” with the words “issued share capital.”

8. To consider and if thought fit pass the following as a Special Resolution:
That Article 86 of the Articles of Association be amended by replacing the existing provisions with:
“Unless and until otherwise determined by the Company by a way of a Special Resolution, Directors of the Company shall not be less than seven (7) or
more than twenty-one (21) in number.”

9. To consider and if thought fit pass the following as a Special Resolution:
(I) “That subject to obtaining the approval of the relevant regulatory authorities, the Directors of the Company be and are hereby authorized to raise
additional capital of up to N15,000,000,000 (Fifteen Billion Naira) locally or internationally whether through Rights Issue, Public Offer, Private
Placement, Special Placing in such numbers as shall be determined by the Directors or through the issuance of bonds, or notes or other instruments,
debts, loans, in any currency, in such tranches, series or proportions, at such coupon or interest rates or otherwise, within such maturity periods, and
on such other terms and conditions, as the Directors may deem fit or determine.”
(ii) “That the Directors be and are hereby authorized to take all necessary steps required to give full effect to the above resolution including the
execution of any documents, all regulatory filings and appointment of professional advisers.”

NOTES
1. ATTENDANCE AND VOTING BY PROXY
The Federal Government of Nigeria, State Governments, Health Authorities and Regulatory Agencies have issued guidelines and directives aimed at curbing the
spread of COVID-19 in Nigeria. Particularly, the Lagos State Government has prohibited large gatherings while the Corporate Affairs Commission (CAC) issued
Guidelines on holding the AGMs of Public Companies by Proxy. The convening and conduct of the AGM shall be in compliance with these directives and
guidelines.
A member of the Company entitled to attend and vote at the Annual General Meeting is entitled to appoint a proxy to attend and vote instead of him/her. A
proxy form is attached to this notice and if it is to be valid for the purpose of this meeting, it must be completed, stamped and deposited at the office of the
Company's Registrars – Africa Prudential Plc, 220B, Ikorodu Road, Palmgrove, Lagos or via email: [email protected] not later than 48 hours before the
meeting.

In line with CAC Guidelines, attendance of the AGM shall be by proxy only. Shareholders are required to appoint a proxy of their choice from the list of nominated

proxies below:

1.1 Mazi Emmanuel Kanu Ivi - Chairman, Board of Directors

1.2 Mr. Mobolaji Adewumi - Managing Director/CEO

1.3 Mr. Adekunle Alli - Shareholder

1.4 Prince (Engr.) MOT O. Tobun - Shareholder

2. STAMPING OF PROXY FORMS
The Company has made arrangements at its cost, for the stamping of the duly completed and signed proxy forms submitted to the Company's Registrars
within the stipulated time.

3. ONLINE STREAMING OF AGM
The AGM will be streamed live online. This will enable shareholders and other stakeholders who will not be attending physically to follow the proceedings.
The link for the AGM online live streaming will be made available on the Company's website at www.abbeymortgagebank.com

4. CLOSURE OF REGISTER
In compliance with Section 114 of CAMA 2020, the Register of Members and Transfer Books of the Company will be closed from 11th July 2022 to 15th July
2022 both dates inclusive.

5. AUDIT COMMITTEE
In accordance with section 404(6) of CAMA 2020 any member may nominate a shareholder as a member of the Audit Committee by giving notice in
writing of such nomination to the Company Secretary at least 21 days before the Annual General Meeting. In view of the statutory requirements that some
members of the Committee should have basic financial literacy and be knowledgeable in internal control process, nomination s should be accompanied
by CVs of nominees.

6. RIGHT OF SHAREHOLDERS TO ASK QUESTIONS
S hareholders have the right to ask questions not only at the meeting but also in writing prior to the meeting.

Dated the 17th day of June 2022
BY ORDER OF THE BOARD

Geoff O. Amaghereonu Esq.
Company Secretary
FRC/2013/NBA/00000002815

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Please admit the duly appointed proxy to the 30th Annual General Meeting of Abbey Mortgage
Bank Plc to be held at No. 23 Karimu Kotun Street, Victoria Island, Lagos on Tuesday the 19th
day of July 2022 at 11:00 a.m. prompt.

..................................................................................... .....................................................................................
Name of ProxyAttending Number of shares held

..................................................................................... .....................................................................................
Name of Shareholder Signature

NOTES
This card must be produced by the Shareholder of his/her proxy to be admitted to the meeting.
Please tear off and retain this card.

GEOFF O. AMAGHEREONU ESQ.
Company Secretary

146

PROXY FORM

I/We desire this proxy to be used in favour of/or against the
resolution as indicated below

AT THE 30TH ANNUAL GENERAL MEETING to be held at No. NUMBER OF SHARES: FOR AGAINST
23 Karimu Kotun Street, Victoria Island, Lagos on Tuesday the RESOLUTION
1. To receive and consider the Audited
19th day of July 2022 at 11:00 a.m. Financial Statements for the year
ended 31st December, 2021 together
I/We with the Reports of the Directors,
Auditors, the Audit Committee and
(Name of Shareholder in Block Letters) Board Appraisers thereon.
2 (a) To re-elect Mr. Nonso Okpala as a
of Non- Executive Director
being a member of Abbey Mortgage Bank Plc hereby appoint either of (b) To re-elect Prof. Marius Umego as
the following individuals as my/our proxy to attend and vote for me/us a Non-Executive Director
and on my/our behalf at the Annual General Meeting of the Company to (c) To re-elect Ms. Chika Ochonogor as
be held on Tuesday, 19th day of July 2022 at 11:00am., a Non-Executive Director
3. To authorize the Directors to fix the
and at any adjournment thereof: remuneration of the Auditors for 2022.
4. To disclose the remuneration of
Dated the …………. day of………………………… 2022 Managers.

Individuals to be appointed as Proxies 5. To elect members of the Audit

1. Mazi Emmanuel Kanu Ivi - Chairman Committee
2. Mr. Mobolaji Adewumi - Acting MD/CEO
3. Mr. Adekunle Alli - Shareholder 6. To approve the sum of N3.5m for No- n
4. Prince (Engr.) M.O.T. Tobun - Shareholder Executive Directors and N4.5m for
chairman as Directors’ fees for 2022
SHAREHOLDER'S SIGNATURE 7a. To authorize Directors to take
steps to comply with the provisions
This Proxy Form should NOT be completed and sent to the CAMA relating to unissued capital.
Registrars if the member will be attending the meeting 7b. To authorize Directors to do all
things necessary and incidental to the
s effectuation of the above resolution.
7c. To amend paragraph 6 of the
MEMART to give effect to resolution
7a above.
8a. To amend Article 86 of the Articles

of Association for minimum of seven

and maximum of twenty-one Directors.

9a. To raise additional capital of up to
N10bn
9b. To authorize the Directors to take
all steps necessary to give effect to
the above resolution.

Please indicate with “X” in the appropriate box how your vote is to be cast on the
resolu ons set above. Unless otherwise instructed, the proxy will vote or abstain from
vo ng at his/her discre on.

IMPORTANT
1. A member of the company is entitled to attend and vote at the Annual General Meeting of the company. He/she is also entitled to appoint a proxy to attend and vote instead of him/her,
and in this case, this Form may be used to appoint a proxy.
2. The above proxy form, duly completed, must be deposited at the office of the African Prudential Plc, No. 220B, Ikorodu Road, Palmgrove, Lagos or by email: cxcafricaprudential.com,
not less than 48 hours before the time for holding the meeting.
3. It is a requirement of the law under the Stamp Duties Act, Cap 58, Laws of the Federation of Nigeria, 2004, that any instrument of proxy to be used for the purpose of voting by any
person entitled to vote at any meeting of Shareholders must bear a stamp duty. The cost will be borne by the company.
4. The names of two Directors and two shareholders of the company have been entered into the form to ensure that someone will be at the meeting to act as your proxy.
5. If the form of proxy is executed by a Company, it should be sealed under its common seal or under the hand and seal of its attorney.

Dated this ___ day of ____________ 2022

Name of Shareholder Shareholder’s Signature
Signature of the Person attending (Proxy
)

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