Abbey Mortgage Bank PIc’s financial statements comply with the applicable legal requirements of the Nigerian Securities and Exchange Commission regarding financial statements for the year ended 31 December 2023. These financial statements contain extracts of the audited financial statements prepared in accordance with International Financial Reporting Standards (IFRS) and its interpretation issued by the International Accounting Standards Board (IASB) and adopted by the Financial Reporting Council of Nigeria. For better understanding, certain disclosures and some prior period figures have been presented in line with the reporting period’s figures. Due to rounding effect, numbers presented throughout this document may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures.
4 www.abbeymortgagebank.com Content 19 33 69 08 22 35 About Abbey Our Business Our Products & Services Financial Highlights Executive Team Corporate Information Directors Chairman’s Statement Managing Director/CEO’s Statement Report of the Directors Statement of Directors’ Responsibilities Certification pursuant to section 60(2) of the ISA 2007 Statement of Corporate Responsibility for Financial Statements Corporate Governance Report Board Evaluation Report Enterprise Risk Management Policy Report of the Audit Committee Independent Auditor’s Report CORPORATE PROFILE STRATEGY & BUSINESS REVIEW GOVERNANCE
5 www.abbeymortgagebank.com 140 146 154 71 143 148 Statement of Profit or Loss & Other Comprehensive Income Statement of Financial Position Statement of Changes in Equity Statement of Cash Flows Notes to the Financial Statements Value Added Statement Five-Year Financial Summary Notice of Annual General Meeting Proxy Form Admission Card Full Dematerialization Form for Migration E-Share Registration Form E-Service/Date Update Form E-Dividend Mandate Activation Form FINANCIAL STATEMENTS OTHER NATIONAL DISCLOSURES INVESTORS’ INFORMATION
About Abbey Our Business Our Products & Services Financial Highlights Executive Team Corporate Information Directors Corporate Profile .01
8 www.abbeymortgagebank.com Our Vision Our Mission To be the leading Mortgage Bank out of Africa. To create opportunities to become the first choice for Mortgages, Housing, Finance and Investments. Our Core Values Fully commited and devoted to delivering value to our stakeholders. Embracing the best standards and practices in the execution of the work we do. Embracing technology and the digitization of our processes and products. Special devotion to bringing satisfaction to our customers. Constantly seeking the most economical and effective solutions to problems. SUPPORTIVE PROFESSIONAL INNOVATIVE CUSTOMER-FOCUSED EXCELLENT
www.abbeymortgagebank.com About Abbey contributing to societal development through various initiatives, and recognizing the power of culture and creativity in enriching communities. Notably, Abbey has achieved a significant reduction in non-performing loans (NPL), showcasing its prudent risk management practices and commitment to maintaining a healthy loan portfolio. Abbey Mortgage Bank’s dedication to excellence has been recognized with prestigious awards from notable bodies, including Mortgage Bank of the Year, Best Mortgage Brand of the Year, Best CustomerCentric Mortgage Bank, Most Innovative Mortgage Bank among others. These accolades serve as a testament to the bank’s commitment to delivering exceptional service and innovation in the mortgage industry. Abbey has remained tenacious and agile amid economic challenges and uncertainties. Our strategic partnership with VFD Group Plc continues to strengthen and diversify our investment opportunities securing our future growth and sustainability. Looking ahead, Abbey Mortgage Bank is poised for continued expansion and profitability. By upholding the highest standards and embracing innovation, the institution aims to maintain its leadership position while delivering exceptional value and service to its stakeholders. Abbey Mortgage Bank Plc is a leading Nigerian financial institution, distinguished as one of the select national Primary Mortgage Banks (PMBs) licensed by both the Central Bank of Nigeria (CBN) and the Federal Mortgage Bank of Nigeria (FMBN). Over the years, Abbey has positioned itself as a prominent player in the mortgage banking sector, expanding its national footprint and evolving into a publicly traded entity. With an initial authorized share capital of N5 Billion, Abbey has significantly enhanced its financial strength, boasting shareholders’ funds exceeding N8.5 billion through capital injections, bonus issues, and profitable trading. Presently, Abbey stands as one of Nigeria’s most capitalized mortgage banks, with eight branches nationwide and a workforce of approximately 140 employees. Since its inception in 1992, Abbey Mortgage Bank has undergone a remarkable journey of growth and transformation, pioneering innovations in mortgage services and venturing into retail banking to better cater to its customers. The institution prides itself on its commitment to innovation, leveraging cutting-edge technology to optimize its offerings. By introducing new products and enhancing operational efficiency, Abbey has revolutionized the mortgage banking experience, providing faster and more streamlined services to its customers, while simultaneously ensuring financial viability. Furthermore, Abbey Mortgage Bank remains steadfast in its dedication to corporate social responsibility, actively 9
10 www.abbeymortgagebank.com Abbey’s principal business continues to be the provision of mortgages and exceptional banking services to individuals and corporate organisations. Abbey provides services such as: ABBEY BUSINESS ABBEY PRODUCTS Personal Banking Business Banking Loans Abbey is also an accredited Primary Mortgage Bank (PMB) for the National Housing Fund (NHF), a subscriber to the Nigeria Mortgage Refinance Company Plc (NMRC), and a partner in the implementation of the 25% RSA pension scheme for the National Housing Fund (NHF). Conventional savings, current and other retail banking services Deposit and funds management. Real estate financing and mortgage services Collaborative project development and financing Business ventures for convenience to our stakeholders. Abbey Save Abbey Plus Savings Account Current Account Fixed Deposit Bloom Kidz Bloom Teens Abbey Zoomers Abbey Biz Biz Extra Fixed Deposits Mortgage Loans Equity Release Mortgage Refinancing Construction Finance
11 FINANCIAL HIGHLIGHTS v MAJOR INCOME STATEMENT ITEMS 2023 December ₦’000 2022 December ₦’000 INCREASED / (DECREASED) % Gross Earnings 7,815,752 5,843,531 33.75 Net Operating Income 3,295,139 3,182,089 3.55 Profit Before Tax 951,343 827,268 15.00 Profit After Tax 871,284 766,159 13.72 Earnings Per Share: Basic (Kobo) 8.58 7.55 13.64 MAJOR FINANCIAL POSITION ITEMS 2023 December ₦’000 2022 December ₦’000 INCREASED / (DECREASED) % Loans and Advances to customers 14,138,284 5,159,962 174.00 Deposits from customers 40,049,606 27,627,753 44.96 Total Assets 57,542,242 39,858,233 44.37 Total Equity 8,569,697 7,698,414 11.32 GROSS EARNINGS PROFIT BEFORE TAX PROFIT AFTER TAX ₦ 7,815.75 million ₦ 951.34 million ₦ 871.28 million
EXECUTIVE TEAM Mobolaji Adewumi Lolita Ejiofor Dipo Adeoye Geoff O. Amaghereonu Managing Director/Chief Executive Officer Executive Director, Treasury & Business Growth Company Secretary/Legal Adviser GM - Group Head – Operations and Business Services www.abbeymortgagebank.com
CORPORATE INFORMATION Branch Network Vi Branch 23, Karimu Kotun Street Victoria island, Lagos. Tel: 01-9035730 Abuja Regional Branch 1, Ayangba Close, Area II, Garki, Abuja, FCT. Tel: 09-2913397 Baze University Branch Plot 686, Behind National Judicial Institute Abuja Tel: 09-2912586 Asaba Branch 375, Nnebisi Road, Asaba, Delta State Tel: +2348034066967 Apapa Branch 19, Warehouse Road Apapa, Lagos Tel: 01-2913009 Festac Branch House 18, 2nd Avenue Festac Town, Lagos Tel: 01-3426535 Iba Branch KM 5, Lasu-Isheri Road By Agboroko Bus stop, Iba, Lagos. Tel: 01-7944894 Annual Report for the year Ended 31 December2023 Okota Branch 51, Okota Road Isolo, Lagos Tel: +2348025899585 23, Karimu Kotun Street Victoria island, Lagos. Tel: 01-9035730 HEAD OFFICE 13
14 CORPORATE INFORMATION Annual Report for the year Ended 31 December2023 DIRECTORS POST HELD APPOINTMENT DATE High Chief Samuel Oni Independent Non-Executive Director Chairman effective 1 January 2024 14th July, 2016 Mazi Emmanuel Kanu O.Ivi Chairman up till 31 December 2023 1st August 1991 Mr. Mobolaji Adewumi Managing Director/CEO 3rd February, 2020 Mr. Oladipupo Adeoye Executive Director 26th June, 2020 Air Vice Marshal Olufemi Soewu (rtd.) Non-Executive Director Retired, effective 31st December 2023 14th December, 2005 Prof. Marius Umego Non-Executive Director 3rd February, 2020 Mr. Nonso Okpala Non-Executive Director Retired, effective 15 June 2023 3rd February, 2020 Brig-Gen John Obasa (rtd.) Non-Executive Director 24th February, 2020 Mrs Christabel Onyejekwe Independent Non-Executive Director 3rd February, 2020 Ms. Jewel Okwechime Non-Executive Director 5th March 2021 Ms. Chika Ochonogor Non-Executive Director 28th August 2020 Obinna Ufudo Non-Executive Director 25th July, 2023 Geoff Amaghereonu Esq Company Secretary Registered Office 23 Karimu Kotun Street Victoria Island Lagos Registered No: RC 172093 License No: 26 Tax Identification Number 01334740-0001 Auditor: PricewaterhouseCoopers Landmark Towers 5B Water Corporation Road, Oniru, Lagos Tel +234 1 271700 Registrars: Africa Prudential Plc 220B, Ikorodu Road Palmgrove Lagos Nigeria
16 www.abbeymortgagebank.com DIRECTORS’ PROFILE has over 30 years’ post-graduation working experience. He served as a Senior Accountant [1981 - 1986] with Texaco Overseas Nigeria Petroleum Company (TOPCCON) in charge of PP & E and later Joint Venture Operations including foreign cash call matters (Treasury services). He was Head of Finance/ Corporate Treasurer/Director at Swiss Nigeria Chemical Company Limited from 1986 to 1996. Before joining Abbey Mortgage Bank Plc as a Director, Mazi E.K.O. Ivi was and still remains the Chairman/CEO of Target International Limited based in Apapa, Lagos. He is a Director in many other companies including Oculus Pharmacare Limited. Mazi holds a B.Sc. in Accountancy [1980] and Executive MBA 1986- 1989] from the University of Lagos. He is a Fellow of the Institute of Chartered Accountants of Nigeria [1994] and an Associate Member of the Chartered Institute of Taxation, Nigeria [2003] is an astute, well-rounded finance professional, with over fifteen years’ experience in financial services sector which span across fixed income trading, treasury management, investment banking and private equity investing. Dipo has been involved in a broad spectrum of financial and banking responsibilities, including mergers and acquisitions, finance, treasury management, project management, business turnaround and strategic planning. He is a natural solution provider and selfstarter with excellent leadership, analytical, communication and interpersonal skills. Dipo is a Civil engineering graduate from the Federal University of Technology Akure and he practiced engineering for a year before delving into banking. He started his banking career at Access Bank Plc, where he worked in Banking Operations, Customer Services and later moved to Treasury where he rose to become the Head, Fixed Income Trading Unit of the Bank within a five-year period. Dipo joined Heirs Holdings, is the Managing Director/CEO of Abbey Mortgage Bank. He is an experienced professional with a deep knowledge of the financial services industry. He possesses an extensive working knowledge of sub-Saharan Africa. He obtained his MBA (specializing in Finance) from Judge Business School, University of Cambridge, UK, and his BSc in Management and Accounting from the Obafemi Awolowo University, Ile-Ife. Bolaji became a Chartered Accountant (ACCA) in 2007. He worked for KPMG as Audit Senior between 2006 to 2009 before joining UBA in 2009. He worked in various capacities at the bank before leaving in 2011. Mr. Adewumi also worked for Africa Finance Corporation, Egon Zehnder International London Office, and Fairtrade International before joining Aso Savings and Loan Plc. At Aso Savings, he was the Special Adviser to the MD/CEO & Head, Strategy between 2012 to 2015. Bolaji Adewumi then moved to First Bank of Nigeria Limited, where he was Special Assistant to the MD/CEO between 2016 to 2019. He later joined VFD as the Group Executive Director, Finance from April 2019 to March 2020. In March 2020, Bolaji Joined Abbey Mortgage Bank as Executive Director Finance & Administration a position he held until he was appointed the Managing Director/ CEO in April 2022. Mr. Adewumi is also a fellow of the Archbishop Tutu Fellowship program. Mazi Emmanuel Kanu Okorafor Ivi Oladipupo Adeoye Mobolaji Adewumi
17 www.abbeymortgagebank.com DIRECTORS’ PROFILE Cont’d graduated from the Nigerian Defense Academy and the Royal Air force College, UK in 1973 and 1976 respectively. He also attended the administrative Staff College (ASCON), Badagry and University of Ibadan where he graduated with a certificate in Personnel Management and Master in Strategic Studies in 1982 and 2001 respectively. He had a distinguished working career in the Nigerian Air Force. AVM Soewu (Rtd) occupied very prominent military positions at the Nigeria Defense Academy. He was Military Assistant to the Lagos State Military Governor (1984-1986), Project Coordinator, Nigerian Air Force Computerization Project (1989-1990) and Commander Nigerian Air Force, Makurdi (2001- 2003) amongst others. A Fellow of the National War College, Abuja [2000-2001] and the Command and Staff College, Jaji, Kaduna State, [1989-1990] AVM Soewu retired as Secretary to the Nigerian Air Force [2006]. A versatile administrator par excellence. He sits on the board of many other companies. is a Professor of Geophysics. He is a graduate of the University of Ibadan where he obtained a BSc in Physics. He bagged his MSc and PhD in Geophysics from Ahmadu Bello University. He is a prolific academic and author of many books and articles published in reputable journals. He is a member of many professional bodies both locally and internationally including Fellow of International Programme in Physical Sciences, Uppsala, Sweden and fellow of the Nigerian Institute of Physics. Professor Marius N. Umego Air Vice Marshal Abiodun Olufemi Soewu (Rtd) where he handled primarily fixed income trading and private equity investments, before joining the VFD Group Plc as the pioneer Group Treasurer in 2018. Currently, Dipo is the Executive Director in charge of Treasury, and Business Growth for Abbey Mortgage Bank Plc. He is an associate of the Institute of Directors of Nigeria, a nonExecutive Director of Atiat Limited and the Chairman of the Board of Trustees of The Initiative for Impactful Learning (The Real Impact). is a dual-qualified lawyer with over 15 years’ experience in both private and corporate practice. She is a self-motivating team player with strong leadership, communication, and negotiation skills. Her professional stints cut across Unilever Limited, UK, Aluko & Oyebode, Lagos, Edwards Wildman Palmer, London, UK, among others. She holds an LLB from the University of Kent Canterbury and a Master’s in International Business Law from the University of Toulouse, France. Presently, she is the Lead Consultant at Filament Consulting, Lagos. Ms. Chika Ochonogor
18 www.abbeymortgagebank.com is a Fellow of both the Association of Certified and Chartered Accountants London [1980] and the Institute of Chartered Accountants of Nigeria. He holds an MBA degree from the University of Ilorin. [1990] He started his professional career as Principal Accountant at Defense Industries of Nigeria in 1979. In 1982, he joined Kwara Breweries as Chief Accountant, from where he joined a World Bank Project, Kwara State Agricultural Program as Financial Controller. He transferred his services to the Central Bank of Nigeria in 1993 as Assistant Director. Upon the completion of several onthe-job training sessions in and outside Nigeria, he was given the role of Team Leader for on-site examination of both commercial and merchant banks. He successfully led many teams to various banks for routine, maiden and special examinations. His reports received several commendations from the management of CBN. In recognition of his hard work and High Chief Samuel Oni diligence, he was promoted to Deputy Director in 1998. In April 2004, he was appointed Director of Bank Examination, a position he held till 2009 when he was appointed Director of Banking Supervision. He was also Chairman of the Committee set up by the CBN to midwife the establishment of Asset Management Corporation of Nigeria (AMCON). He retired from CBN in 2011. Since then, he has been in private business and consultancy services. He also sits on the Board of United Bank for Africa Plc. His core competences include Risk Management, Audit, Regulatory Compliance and Corporate Governance. DIRECTORS’ PROFILE Cont’d holds a BTech degree from Halton College, Cheshire, England and M.Eng in Chemical and BioProcess Engineering from the University of Surrey, Guilford, England. Her core competencies include Environmental Engineering, Project Management, Risk Management, Sustainability Business Development and Performance Optimization. She was Senior Environmental Consultant at Atkins Global, Warrington, UK, Senior Environmental Adviser, Worldwide Energy, Western Australia, Director, J&R Environmental Services, London, UK. She is the Managing Director, Deltic Africa. Ms. Jewel Okwechime Ufudo is a multi-sector management professional with extensive Board level experience. His 30 years post graduate work experience spans across banking, organizational set-up, financial strategy, personnel management and corporate turnaround. He holds a B.Sc degree in Finance from Enugu State University of Technology, MBA from the University of Navara, Spain and M.Sc in International Securities Investment & Banking from the University of Reading, UK. He was the President/CEO of the Transnational Corporation of Nigeria (Transcorp). He is the Chairman of Atiat Limited as well as Chairman of Loan Book Limited. Obinna C. Ufudo
19 www.abbeymortgagebank.com DIRECTORS’ PROFILE Cont’d is a seasoned Banker with over 30 years’ experience garnered from various banks and financial institutions such as United Bank for Africa Plc, First Bank of Nigeria Limited, Magnum Trust Bank among others. Her core competencies include Corporate Strategy, Treasury Management, Performance Evaluation and Information Technology. She retired from the Nigeria InterBank Settlement Systems (NIBSS) as an Executive Director. She holds an MBA in Banking & Finance from ESUT Business School (1998) and LL.B (Hons) from University of Lagos (1985). She also has a certificates in Corporate Level Strategy from Havard Business School (2016) and Global Management from INSEAD Business School Spain (2014 - 2015) to mention but a few. Mrs. Christabel Onyejekwe Brigadier-General John Obasa (rtd) is a retired Army Officer who had held many command positions. He was also an instructor at the Nigeria Military School, Zaria and he rose to the position of Director, Nigerian Army Archives, and Director, Research and Development Defence Industries Corporation, Kaduna, among others. He obtained his MSC in Geographic Information System from the University of Ibadan and his BSC in Biochemistry from the University of Ilorin. Brigadier-General Obasa (rtd) is a frequent public speaker and major influencer on the improvement of education in the Nigerian Army and Nigeria at large. Brigadier-General John Obasa (Rtd)
Chairman’s Statement Managing Director/CEO’s Statement Strategy & Business Review .02
High Chief Samuel Oni Chairman, Board of Directors, Abbey Mortgage Bank PLC. Chairman’s Statement
23 CHAIRMAN’S STATEMENT Introduction Distinguished shareholders, representatives of regulatory agencies, gentlemen of the press, ladies, and gentlemen. It is with great pleasure that I welcome you, on behalf of the Board of Directors, to the 32nd Annual General Meeting of Abbey Mortgage Bank Plc holding in Lagos. During this meeting, I shall present the Annual Report and Accounts for the 2023 financial year and receive your comments and perspectives on the affairs of our company. I am pleased and humbled to announce that our Bank has once again scaled another remarkable financial height despite the many challenges facing our nation and the Nigeria housing market. Global and Domestic Business Environment As the world economy grapples with the combined effect of global developments like, the Russia – Ukraine war and the armed conflict between Israel and Hamas-led Palestinian militant groups, economic growth has lowered on the back of rising energy costs, disruption of global supply chains and heightened inflation owing to rising cost of raw materials. The elevated inflationary pressures in both advanced and emerging economies have prompted regulators to take decisive action by significantly raising the benchmark interest rates. This move aims to stimulate investment, enhance economic stability, and promote moderation within the economy. Mirroring the global economic landscape, the Nigerian economy witnessed a deceleration in growth during the period under scrutiny. Real GDP expanded by 2.74% in 2023, a slight dip from the 3.10% recorded in 2022. This slowdown stemmed from a convergence of factors, notably the anticipation surrounding the outcome of 2023 general elections, which reignited political tensions amongst various ethnic groups, political parties, etc. and prompted investors to adopt a cautious stance. Additionally, uncertainties loomed over key governmental policies and issues, including the Dual Exchange Rate, Fuel Subsidy, Government Borrowing, Insecurity, Fiscal Prudence, and Transparency of Monetary Policies, contributing to the subdued growth trajectory. The administration of President Bola Ahmed Tinubu wasted no time in making its mark on the global stage, swiftly addressing critical issues within 30 days of assuming office. The decision to unify the Exchange Rate notably shifted the burden of subsidizing imported goods from financial institutions to the real economy, leading to significant foreign exchange gains for commercial banks. However, this move resulted in substantial foreign exchange losses for manufacturers and importers throughout the second half of 2023. The boldness and expediency of this policy shift initially sent economic indicators into a frenzy, particularly the exchange rate, which surged to N1900/$ before gradually stabilizing around N1200-1300/$. As we stride into 2024, there are promising signs of global inflation easing, bolstered by the concerted efforts of the current administration. With ongoing proactive measures, inflation is anticipated to deescalate and form a downward trajectory in the second half of 2024. It is heartening to note that the economic trajectory charted by the Tinubu-Led administration has significantly curtailed policy ambiguity. Since assuming office, the government has steered towards embracing promarket strategies, alleviating the fiscal burdens that had plagued the Nigerian economy. Despite these transformative policy shifts, there is an urgent call to ramp up efforts in addressing the prevailing security challenges, which persistently undermine the efficacy of the government’s reform agenda.
24 Industry Highlights Amidst a prolonged period of stagnated growth, the financial landscape of 2023 ushered in a new chapter of robust growth on a global scale, shaking off the shackles of the COVID-19 pandemic with resounding vigor. This resurgence was fueled by a wave of innovation and heightened economic activity, propelling revenues to unprecedented heights. Notably, Nigeria’s banking sector experienced an exceptional performance, basking in the glow of foreign exchange windfalls and the ripple effects of escalating inflation and interest rates, prompting increased borrowing among producers and importers. Yet, amidst the sector’s triumphs, the specter of rising fund costs loomed large, propelled by the upward trajectory of the Monetary Policy Rate (MPR). For developers seeking capital for myriad construction endeavors, the landscape was fraught with challenges, as galloping inflation wreaked havoc, particularly evident in the staggering surge of cement prices from N5,500 to N8,500 per bag throughout 2023. Similarly, households aspiring to secure mortgages found themselves at a crossroads, grappling with diminished investible incomes amidst the relentless surge in living expenses, this saw the growth in real estate slump from 3.95% in 2022 to 1.68% in 2023. Likewise, developers within the construction sector witnessed a tempered annual growth rate, clocking in at 3.57% for the year of 2023, a dip from the 4.54% recorded in the preceding year of 2022. Environmental, Social & Governance Focus (ESG) We have aligned and integrated ESG/ Sustainability objectives into the organization’s overall business strategy. We have set defined metrics that would enable the institution to achieve its ESG targets in line with global best practices and will continue to uphold a strong governance structure with an emphasis on long-term sustainability. We are preparing for the adoption of IFRS S1 and IFRS S2 in accordance with the road map of the Financial Reporting Council of Nigeria (FRCN) and the Nigerian Exchange Group (NGX). Our social outreach in 2023 focused on human capacity development for the next generation and environmental awareness spurred by the continual flood and landslide in some regions of the country. Whilst we are aware of the complexities in the business environment, and the dilemma between reducing the environmental impacts of business activities and increasing financial cost, we will continue to review our ESG framework to ensure that, while meeting the needs of the present, the needs of the future generations are also guaranteed. Financial Performance Embracing our Bank’s Mission Statement as our guiding beacon, we have relentlessly pursued avenues to cultivate opportunities in mortgages, housing, finance, and investment. Our strategic investments and initiatives have been laser-focused on broadening our horizons to deliver unparalleled customer service to partners worldwide. Despite grappling with macroeconomic headwinds, our unwavering commitment to delivering shareholder value remained unyielding. We invested wholeheartedly in our people and the communities we serve, while fostering MSME growth through strategic partnerships with development banks. The year 2023 stands as a testament to our financial prowess, marking the third consecutive year of resounding success. Achieving approximately N7.9 billion in gross earnings, our Bank demonstrated a remarkable feat, driven by a concerted focus on harnessing top-tier talent, cutting-edge technology, and innovative products and services to exceed customer expectations. Notably, our net interest income surged by an impressive 26.7% to N2.57 billion from N2.03 billion in 2022. This remarkable growth narrative was underpinned by prudent risk management practices, facilitating strategic loans to customers while addressing housing deficits in tandem with our valued customers. Bolstering this growth is the daring expansion of our loan book, fueled by Chairman’s Statement CHAIRMAN’S STATEMENT Cont’d
25 www.abbeymortgagebank.com robust customer deposits and the success of the Abbey brand launched in 2022. Despite navigating a challenging operational environment, our returns and key metrics have consistently surpassed expectations, a testament to our unwavering dedication to excellence amidst adversity. Dividend Payment We are ecstatic to unveil a groundbreaking achievement: the Central Bank of Nigeria has granted approval for the consolidation of our share premium account and accumulated loss account. This milestone, unprecedented in the mortgage bank industry, signifies a monumental stride forward. It not only heralds a new era of financial consolidation but also paves the way for our esteemed shareholders to reap the rewards of our collective success over the past three years. The Board of Directors is recommending a dividend of 4 kobo per ordinary share of 50 Kobo each, to all shareholders’ whose names appear on the register of members on the 10th of May 2024, payabale subject to shareholders approval and deduction of withholding tax at the prevailing rate. The proposed dividend under difficult business circumstances demonstrates the company’s commitment to positive returns as a reward for your continued support and loyalty over the years. Board Developments On behalf of the Board of Directors, I would like to acknowledge the retirement of the former Chairman of the Board, Mazi Emmanuel Kanu Okoroafor Ivi and one of our Non-Executive Directors - Air Vice Marshal Abiodun Olufemi Soewu. They both retired effective 31st December 2023 after completing their tenor as Directors. Earlier in June 2023, Mr. Nonso Okpala resigned his appointment as a Director. We sincerely appreciate the significant contributions of the three ex-directors to the Bank during their respective tenors. In the course of the year Mr. Obinna Ufudo and Mrs. Adenike Kuti who are both up for election at this AGM joined the Board of the Bank. They are individuals who have distinguished themselves in their careers with very rich and profound profiles which are contained in the subsequent pages of the Annual Report. Looking into the future Global growth is projected at 3.1 percent in 2024 below the historical (2000 – 2019) average of 3.8 percent, with elevated central bank policy rates to fight inflation, a withdrawal of fiscal support amid high debt weighing on economic activity, and low underlying productivity growth. Inflation is falling faster than expected in most regions, in the midst of unwinding supply-side issues and restrictive monetary policy. On the domestic front, the impact of a divisive electoral process still lingers, with much responsibility on the incoming administration to not only unify the nation, but effect necessary economic policies to spur growth. Notwithstanding the dire economic outlook, our Bank is well poised to stay on course towards delivering comparable financial and strategic performance for the current year and beyond. The desire for mortgage finance is poised for continual growth, especially among individual mortgagors, despite enduring challenges of high interest rates and affordability constraints. However, we remain resolute in our pursuit to expand our market share, as we are strategically positioned to capitalize on emerging opportunities in the upcoming year. Our aim is to cultivate a robust and dynamic bank, delivering substantial value to our stakeholders throughout 2024. It is clear that Banking remains a risk-based industry, therefore, we shall remain prudent in our management and pricing of risk to balance our risk and returns. The world may see challenges in 2024, but we are seeing opportunities and are optimistic that our Bank will sail through to record a better performance. We will remain vigilant and focused, while taking nothing for granted on the key value drivers of our business. We will book more loans while strategically securing longer-term, cost-effective deposits, all within sustainable debt finance ratios. Furthermore, we are committed to exploring additional avenues for forging strategic business partnerships in pivotal geographical regions across the country. CHAIRMAN’S STATEMENT - Cont’d
26 We will continue to build on our relations with the Government, Development Partners, and other stakeholders for the development of our bottom line. In furtherance of our vision, we shall focus on driving down interest expenses to create affordable mortgage finance products for our esteemed customers. Furthermore, we are determined to capitalize on opportunities within the financial sector, aiming to transition into a regional commercial bank. While we take pride in our legacy as a mortgage bank, we harbor a bullish outlook for our future. Over the past 24 to 36 months, we have not only revitalized our Bank, but have also honed competencies that can be fully leveraged with a license that broadens our scope and enables us to showcase our true potential. Appreciation Finally, distinguished members, I express, on behalf of the Board, our deep appreciation for the opportunity to serve you and the steadfast support given to the Bank over the years. Words are not enough to thank my colleagues on the Board, the Managing Director/CEO, Executive Team, Management Team and Staff for their outstanding efforts during the year. Also, we thank our Partners and Regulators for their dedication to service in the industry. We have had a solid run of years but with your collective support, the Bank will continue to exceed expectations. The outlook is positive, the conditions are invigorating, and the Business is well positioned to continue to prosper into the future. Please come with me as we succeed together again in 2024. High Chief Samuel Oni Chairman, Board of Directors CHAIRMAN’S STATEMENT Cont’d Chairman’s Statement
Mobolaji Adewumi Managing Director/CEO, Abbey Mortgage Bank PLC. CEO Statement
29 Dear Esteemed Shareholders, I am pleased to present to you the Annual Report for 2023, highlighting the performance and achievements of Abbey Mortgage Bank Plc over the past financial year. As the Managing Director/ CEO, it is my privilege to lead our dedicated team and steer our organization towards continued growth and success. In 2023, the global stage confronted unparalleled hurdles as instability surged to new heights. Persistent conflicts raged on, while fresh crises emerged, exacerbating geopolitical tensions worldwide. Amidst this tumultuous backdrop, Nigerians embraced the pivotal opportunity to partake in general elections, marking a significant turning point with the election of a new President. However, the year commenced on a tumultuous note, as the nation grappled with naira and fuel scarcities, plunging the country into a state of panic, and disrupting economic activities. The heightened political tension stemming from the election, compounded by legal challenges to its outcome, further added to the turmoil. Throughout 2023 we saw rising food prices, volatile markets, currency fluctuations, and escalating inflation rates while the economic environment remained uncertain. Government policies though aggressive and decisive, were not showing immediate intended results owing to the inherent policy lag. Despite these unsettling circumstances, Abbey Mortgage Bank delivered another strong performance in 2023, building on the successes recorded in the prior year. We have persisted in our remarkable journey of transformation, propelling our Bank to the forefront of Mortgage Banking in Africa. This achievement fills me with immense pride as I reflect on the unwavering dedication and outstanding achievements of our employees nationwide, continually reminding them of our promise to make dreams on home ownership achievable. As we pause to reflect on the past year’s performance, I am excited to provide context and insight into our trajectory for 2024 and beyond. Review Of Our 2023 Financial Performance The Bank’s performance in 2023 stands as a testament to resilience and excellence amidst the economic challenges plaguing our nation. Remarkably, the Bank notched its third consecutive year of profitability, setting yet another milestone in creating value for its stakeholders. In FY 2023, the company achieved gross earnings of N7.81bn, marking a stellar 34% surge from N5.84bn in 2022. Despite the headwinds of rising inflation, net operating income continued its upward trajectory, growing by 3.55% from N3.18bn in 2022 to N3.29bn. Operating expenses were prudently managed, reducing marginally from N2.35bn in 2022 to N2.34bn in 2023. This fiscal discipline, coupled with prudent financial management, culminated in a 2023 pre-tax profit of N951m, reflecting a noteworthy 15% increase from the 2022 position of N827m. Our customer deposits surged by an impressive 44.92%, from N27.6bn in 2022 to N40.0bn in 2023. This remarkable growth in deposits can be attributed to our proactive marketing outreach, competitive interest rates, strategic identification of untapped markets, innovative product offerings, bolstered customer confidence, and the esteemed reputation of our bank. Total Assets experienced a robust growth of 44.11%, culminating at N57.5bn compared to MANAGING DIRECTOR/ CEO’S STATEMENT
30 N39.9bn in 2022. Notably, our loans and advances witnessed a staggering surge of 174%, from N5.1bn in 2022 to N14.1bn. Similarly, investments and bank placements grew by an impressive 25%, surging from N32bn in 2022 to N40bn in 2023. The expansion of our loan book reflects the immediate impact of our rigorous delinquent asset clean-up exercise and underscores our longterm commitment to prudent risk management. Bolstered by our stellar earnings performance, shareholders’ funds experienced a noteworthy growth of 11.31%, increasing from N7.69bn in 2022 to N8.56bn. Beyond the numbers, the bank also recorded significant improvements in many key nonfinancial components in 2023. Our client acquisition drive led to a significant increase in customer accounts while significant milestones were achieved in POS acquisition and cards activation. Our customers conduct over 85% of their banking transactions via our digital channels in line with one of our key strategic pillar to be a Tech Led Bank. We have also seen an increasing number of transactions processed on our electronic channels following the launch of our improved mobile application, internet banking and corporate website. Distinguished shareholders, the results before us highlight our commitment to creating value for our stakeholders, and we are pleased to have delivered a third year of profit, after six consecutive years of losses. Abbey Mortgage Bank has turned a corner, and we are ready to soar. Assessment Of Our Strategic Activities 2023 was a pivotal year for our Bank, and I would quickly detail some of the milestone activities that have shaped the past year and set the context for the future. Significant Growth in Deposit Liability: We achieved a remarkable 44% year-on-year growth in deposit liabilities, surpassing the N40 billion mark. This notable expansion can be attributed to our effective marketing campaigns, which attracted a larger customer base, competitive interest rates, our strategic expansion into new markets, and the heightened trust and confidence in the stability and services of our bank among depositors. In particular, we introduced two customized products tailored to the needs of financial institutions previously underserved by traditional banking, as well as interest-savvy customers with a high-risk appetite. These innovative products were developed through strategic partnerships in the Trusteeship business, ensuring maximum confidence in the safety of funds. We are pleased to report that these initiatives have successfully generated over N5 billion in deposits, underscoring the effectiveness of our efforts in meeting the diverse needs of our clientele. We also ventured into the MSME value chain in the Construction and Real Estate Sector unlocking developmental funds to assist cut down the housing deficit in Nigeria. This partnership has seen over N3bn unlocked in On-lending facilities. CEO’s Statement Creation of New Quality Risk Assets: Additional risk assets of N9bn were achieved which elevated the bank’s loan portfolio to N15bn. This is attributed to effective risk management practices, thorough credit assessments and stringent lending criteria. The bank is now holding a higher proportion of high-quality loans which has led to profitability while minimizing risk of default and non-performing assets. This has further strengthened the bank’s reputation, attracted more investors and improved financial stability. Enhanced Employee Engagement and Welfare: At Abbey, our employees are the cornerstone of our operations. Our unwavering commitment to motivating and retaining key talents has been our beacon of strength. We empathize deeply with our staff, acknowledging the challenges they face in today’s Nigeria, especially amidst soaring MANAGING DIRECTOR/CEO’S STATEMENT Cont’d
31 www.abbeymortgagebank.com Investment Grade Rating: We concluded another rating of our institution inviting Agusto & Co and DataPro to have an independent assessment rating of our institution and to provide an unbiased assessment of how we stand when compared to our peers. The Rating took into consideration all relevant qualitative and quantitative factors to arrive at the assigned risk indicator. Data Pro rated us A- and Agusto & Co rated us Bbb-. Overall, the ratings shows that we have strong revenue growth, stable and experienced management, good liquidity, and good capitalization. Listing on FMDQ: Collaborating closely with our esteemed financial advisers, we successfully secured a ground-breaking N15 billion commercial paper program with FMDQ. As we adhere steadfastly to our rigorous liquidity management practices, we eagerly anticipate the listing of Series 1 and 2 Issuance in the market. With utmost confidence in our outstanding and unwavering performance, we foresee overwhelming subscription rates for the commercial papers, a testament to our continued excellence and reliability. Improve Earnings Capability: We improved our earnings capacity through a dynamic approach to Deposit Mobilization and Cost Optimization, harnessing the power of efficient cost controls and leveraging our Treasury & Arbitrage businesses. With unwavering focus, the Bank rigorously scrutinized expenses, optimizing them to the fullest extent and introducing the innovative price assurance function across all expenditures. These strategic measures bore fruit, evident in the tempered operating expenses despite inflationary pressures, and reflected in the sustained upward trajectory of our bottom line. Moving forward, we remain steadfast in our commitment to further enhancing these initiatives for continued growth and success. Digitization: The Bank propelled its digitalization initiatives forward with vigor, successfully rolling out our Corporate Internet Banking platform to elevate service delivery for our corporate clientele. Version 2 of our Mobile App has also been developed, currently undergoing pilot testing and poised for imminent launch. These advancements are poised to revolutionize both corporate and retail acquisition by delivering a seamless and userfriendly experience, while furnishing essential transaction banking capabilities to both corporate and non-retail customers. Furthermore, substantial investments have been made in our infrastructure to bolster support for our digital applications. This strategic investment has empowered us to overhaul a significant portion of our information technology services, achieving unprecedented efficiency in inflation rates. To address these concerns, we have successfully implemented two bank-wide salary increases and introduced innovative programs such as the Spice Lite loan program, staff mortgage subsidy program, and staff car loans. Additionally, we have offered various palliatives to alleviate the burden of living costs throughout the year. Increased Brand Awareness/ Business Realignment: The bank has gained notable recognition. Throughout 2023, Abbey received notable recognition and awards – further validating the improved market perception of the Abbey Brand, reinforcing that we have come a long way and still have much more to achieve. Some of these accolades include: Ambience across all the Bank’s branches has improved with the branch renovation project has been completed. 12th West African Brand Excellence Awards 2023- Best Mortgage Bank Brand Global Economics Award 2023 - Best Mortgage Bank - Nigeria, Best Customer Centric Bank – Nigeria International Business Magazine Awards – Most innovative Mortgage Bank EOM Business Network/Silverbird Television Award for Excellence – 100 Most Distinguished CEOs to look out for in 2023 Africa Finance Award 2023 - West Africa Finance Mortgage Bank of the Year, Mortgage Finance & Investment CEO of the year MANAGING DIRECTOR/CEO’S STATEMENT - Cont’d
32 CEO’s Statement Our People The Bank’s Values in our people will continue to guide our decisions to move forward in 2024 which will help us to outline meaningful ways to make a difference. With this strong foundation, an outstanding team, and an ambitious strategy, I am confident that we are very well positioned for continued growth and success to the future. Our people represent our most important asset and it is part of our plan to put structures in place to improve the their lives, empower and support them to thrive. To remain committed to our promise, the Bank continuously reviews salaries of all the staff to match up with economic reality. It is our culture to reward our long serving staff to appreciate their commitments and trust, and to pay bonuses to high performing staff. We are not only committed to making life better for our clients only but also our staff who remain the heart of our organization. We have revamped our training program to enhance employee productivity and ensure a better experience for our customers, while also maintaining fairness to the Bank. Our objective is to create a more agile organization with an improved workplace culture that motivates our workforce to execute and deliver our strategic priorities. Community Involvement & Support The journey towards building a future-ready organization continues. The essential part of this journey is a strong commitment to the Looking Ahead The upcoming year presents another opportunity for us to showcase our commitment to achieving outstanding performance and creating value. We aim to reinforce our strategic direction and build upon our current achievements by implementing more strategic measures that will enable us to achieve our desired outcomes and establish a reputable brand for the mortgage industry. The following are the strategic areas of focus for 2024: 1. Conversion to a Regional Bank: We have commenced the process of converting Abbey into a regional bank to drive our business expansion aspirations. The acquisition of a commercial license will increase service offerings to our customers and facilitate improved value creation for our stakeholders. We will keep all stakeholders informed of the progress as it develops. 2. Optimize Earnings Capability: We will continue to optimize our earning capability by building on existing performance through transaction processing. During the cash crunch of early 2023, Abbey Mortgage Bank emerged as the go-to institution for transaction reliability, thanks to the reliability and speed facilitated by our digital endeavors. These efforts align closely with the Bank’s strategic vision to position itself as a leading Mortgage Bank, offering traditional products in an innovative and regulatory-compliant manner. society in which we operate. As an organization, we actively participate in activities that will contribute to the development and sustainability of our environment. In 2023, we promoted the rich cultural heritage of our diverse workforce on independent day, this further endeared different ethnic groups to one another. In our business sustainability plans, we created a Real Estate product WIRE (Women in Real Estate) to support women in this line of business achieve their goal and show our commitment to the environment. The product has subsidized rates and requirements to enhance completion of their projects. Similarly, as an organization, we continuously enlighten staff on the importance of environmental protection, through various team bonding sessions and environmental activities. MANAGING DIRECTOR/CEO’S STATEMENT Cont’d
33 www.abbeymortgagebank.com Intensifying Deposit Mobilization. Increasing profitability through innovative products and initiatives. Accelerating digital transformation and enhancing cost optimization and efficiency. Streamlined and optimized business processes 3. Institutionalizing HighPerformance Culture across the Organization: Moving forward, we are committed to filling key personnel positions with top talents from the industry, while also prioritizing the retention and retraining of our current employees. We will implement a range of incentives to inspire and bring out the best in our existing workforce. We firmly believe that our employees possess the skills and capabilities to rival those found on Wall Street. Instilling this confidence and providing avenues for intellectual enrichment will remain a central focus for our institution in the years ahead. 4. Provision of Tech-driven Banking Services and Operation: We firmly believe that the landscape of banking has evolved, and relevance in the coming years will be reserved for those who embrace this evolution. To this end, we have established a dedicated team tasked with enriching our e-business portfolio. This team will spearhead efforts to provide mortgage banking as a service to diverse populations, ensuring our offerings remain innovative and in tune with the changing needs of our customers. 5. Increased Strategic Partnerships: We are committed to unlocking strategic partnerships poised to generate immense value for our shareholders. By leveraging these relationships, we aim to provide financing solutions to developers and home seekers, fostering a mutually beneficial environment at the core of our services in 2024. We have identified numerous niches, including financial institutions, MSME in the building value chain and developmental organizations, which stand to benefit from partnerships with a forwardthinking institution like Abbey Mortgage Bank plc. We are already eagerly anticipating the possibilities that these relationships hold for us in 2024. Conclusion In closing, I am proud to reflect on the accomplishments detailed in this report, which underscore our dedication to delivering value to our shareholders, customers and communities. Looking ahead, we remain steadfast in our commitment to innovation, sustainability, and excellence in all aspects of our operations. I extend my sincere gratitude to our regulators, auditors, directors, employees, customers, partners and shareholders for their continued support and trust in our organization. Together, we will navigate the challenges and opportunities ahead, staying true to our vision and values as we strive for continued growth and success. Mobolaji Adewumi Managing Director/CEO, Abbey Mortgage Bank Plc. critical assessments on areas of improvement and implementing sustainable and innovative measures to make efficient use of our resources. This includes. MANAGING DIRECTOR/CEO’S STATEMENT - Cont’d
Report of the Directors Statement of Directors’ Responsibilities Certification pursuant to section 60(2) of the ISA 2007 Statement of Corporate Responsibility for Financial Statements Corporate Governance Report Board Evaluation Report Enterprise Risk Management Policy Report of the Audit Committee Independet Auditor’s Report Governance .03
35 REPORT OF THE DIRECTORS 1. Result 2. Principal activities and business review 3. Legal form Annual Report & Account 2023 The Directors present their report together with the audited financial statements of Abbey Mortgage Bank Plc (“the Bank”) for the year ended 31 December 2023. The Bank applied the International Financial Reporting Standards (“IFRS”) issued by the International Accounting Standards Board in preparing these Financial Statements and the comparative financial information. Highlights of the Bank’s operating results for the year under review are as follows: The principal activity of the Bank continues to be the provision of mortgage and banking services to the general public. The Bank, which was incorporated in Nigeria as a private limited liability company on 26 August 1991, obtained its license to operate as a Mortgage Bank on 20 January 1992, commenced business on 11 March 1992 and later converted to a public limited liability company in September 2007. On 21 October 2008, the Bank became officially listed on the Nigerian Stock Exchange. Following the approval of the Central Bank of Nigeria, the Bank changed its name from Abbey Building Society Plc to Abbey Mortgage Bank Plc on 16 January 2014. 2023 2022 ₦’000 ₦’000 Profit before taxation 951,343 827,268 Taxation (80,059) (61,109) Profit after taxation 871,284 766,159 Other comprehensive income - - Profit for the year 871,284 766,159 Less: appropriations: Transfer (to)/from regulatory risk reserve (73,502) 609,939 Net effect of operations on accumulated losses 797,782 1,376,098
36 4. Director’s interest in shares and contracts 5. Changes in Directorate 6. Record of directors’ attendance 7. Election/Re-election of Directors Indirect holding Report of the Directors The interests of the Directors in the issued share capital of the Bank as recorded in the Register of Directors’ Shareholding as at 31 December 2023 are as follows: Nonso Okpala resigned as a Board member and Obinna Ufudo was appointed to replace him during the year under review. Mazi Emmanuel Kanu O. Ivi and Air Vice Marshal Olufemi Soewu (Rtd) also retired from the Board on 31st December 2023. In accordance with Section 284 (2) of the Companies and Allied Matters Act 2020, the Record of Directors’ attendance at Directors’ meetings during the financial year under review is available for inspection at the Annual General Meeting. It is also disclosed in the Corporate Governance Section of the Annual Report. “Since the last Annual General Meeting Mr. Obinna Ufudo and Mrs. Adenike Kuti were appointed as Directors to replace Directors who had retired. They will be presented to this meeting for a re-election. In accordance with Article 106 of the Bank’s Article’s of Association, Prof. Marius Umego retires by rotation and being eligible, offers himself for re-election” Mobolaji Adewumi and Dipo Adeoye have indirect holding through VFD Group. None of the Directors notified the Bank of any disclosable interest in contracts with which the Bank was involved as at 31 December 2023 (2022: None) Mazi Emmanuel Kanu O. Ivi and Air Vice Marshal Olufemi Soewu (Rtd) retired from the Board effective 31st December 2023. S/N NAMES OF DIRECTORS As at 31 December 2023 (Shares) Percentage Holding (%) As at 31 December 2022 (Shares) Percentage Holding (%) 1 Mazi Emmanuel Kanu O. Ivi 118,642,341 1.17 118,642,341 1.17 2 Mr. Mobolaji Adewumi NIL NIL 3 Mr. Oladipupo Adeoye NIL NIL 4 Air Vice Marshal Olufemi Soewu (Rtd) 50,717,076 0.5 50,717,076 0.5 5 High Chief Samuel Oni NIL NIL 6 Prof. Marius Umego NIL NIL 7 Brig-Gen. John Obasa (Rtd) NIL NIL 8 Mrs Christabel Onyejekwe 50,000 0.004 NIL 9 Ms Chika Ochonogor NIL NIL 10 Ms Jewel Okwechime 134,064,146 1.32 134,064,146 1.32 11 Mr Obinna Ufudo 6,949,246 0.068 NIL REPORT OF THE DIRECTORS - Cont’d
37 8. Substantial interest in shares 9. History of capitalization Nigerian citizens and associations held all the ordinary shares of the Bank as at 31 December 2023. No individual shareholder held more than 5% of the issued and paid up share capital of the Bank as at 31 December 2023 except the following: The authorised, issued and fully paid up share capital are as follows: As at 31 December 2022 Shareholder No. of shares held Percentage of shareholding % VFD Group Plc 4,020,840,792 39.6 Madonna Ashib Comm. Enterprises Ltd 1,679,264,202 16.54 Forte Properties & Investment Ltd 1,605,388,734 15.81 DATE AUTHORISED ISSUED AND FULLY PAID CONSIDERATION INCREASE (₦) CUMMULATIVE (₦) INCREASE (₦) CUMMULATIVE (₦) 1991 NIL 5,000,000 NIL 5,000,000 CASH 1992 10,000,000 15,000,000 10,000,000 15,000,000 CASH 1992 15,000,000 30,000,000 NIL 15,000,000 1994 20,000,000 50,000,000 15,000,000 30,000,000 CASH 1996 NIL 50,000,000 20,000,000 50,000,000 CASH 1997 50,000,000 100,000,000 NIL 50,000,000 1999 NIL 100,000,000 20,000,000 70,000,000 CASH 1999 NIL 100,000,000 8,000,000 78,000,000 BONUS 2000 100,000,000 200,000,000 22,000,000 100,000,000 BONUS 2001 NIL 200,000,000 85,000,000 185,000,000 CASH 2001 NIL 200,000,000 15,000,000 200,000,000 BONUS 2002 300,000,000 500,000,000 40,000,000 240,000,000 BONUS 2003 NIL 500,000,000 25,000,000 265,000,000 BONUS 2004 300,000,000 800,000,000 50,000,000 315,000,000 CASH 2004 NIL 800,000,000 20,000,000 335,000,000 BONUS 2005 200,000,000 1,000,000,000 25,000,000 360,000,000 BONUS 2006 500,000,000 1,500,000,000 140,000,000 500,000,000 CASH 2006 NIL 1,500,000,000 18,000,000 518,000,000 BONUS 2007 NIL 1,500,000,000 501,935,000 1,019,935,000 CASH 2008 2,000,000,000 3,500,000,000 1,080,065,000 2,100,000,000 CASH 2020 2,500,000,000 6,000,000,000 1,130,769,231 3,230,769,231 CASH 2021 NIL 6,000,000,000 1,846,153,846 5,076,923,077 CASH 2022 NIL 6,000,000,000 NIL 5,076,923,077 NIL 2023 NIL 6,000,000,000 NIL 5,076,923,077 NIL As at 31 December 2023 Shareholder No. of shares held Percentage of shareholding % VFD Group Plc 3,835,181,810 37.77 Madonna Ashib Comm. Enterprises Ltd 1,679,264,202 16.54 Forte Properties & Investment Ltd 1,381,689,511 13.61 Annual Report & Account 2023 REPORT OF THE DIRECTORS - Cont’d
38 Range Number of Shareholders Shares Held Percentage of shareholding % 1 - 100,000 1157 24,616,211 0.24% 100,001 - 500,000 144 33,804,041 0.33% 500,001 - 1,000,000 20 17,936,581 0.18% 1,000,001 - 50,000,000 35 292,556,095 2.88% 50,000,001 - 500,000,000 18 2,888,767,702 28.45% 500,000,001 - Above 3 6,896,165,524 67.92% 1,377 10,153,846,154 100% Range Number of Shareholders Shares Held Percentage of shareholding % 1 - 100,000 955 23,690,141 0.23% 100,001 - 500,000 129 31,098,347 0.31% 500,001 - 1,000,000 21 18,348,098 0.18% 1,000,001 - 50,000,000 36 246,114,782 2.42% 50,000,001 - 500,000,000 9 623,662,261 6.14% 500,000,001 - Above 13 9,210,932,525 90.71% 1,163 10,153,846,154 100% 10. Analysis of shareholders 11. Donations 10.1 Analysis of shareholders as at 31 December 2023 Donations made during the year amounted to ₦1,550,000 (2022: ₦1,090,000). No donation was made to any political organization. The beneficiaries are: 10.2 Analysis of shareholders as at 31 December 2022 2023 2022 ₦’000 ₦’000 Nigerian Redcross Society - 1,000 Radiance High School 50 30 Debra's Palace Initiative (Boy Child Conservation) 1,000 - Full Circle Geriatric Care Services 500 - Tendertouch School, Lagos - 20 Loral Nursery & Primary School, Lagos - 20 Eucharistic Heart of Jesus School, Lagos - 20 Total 1,550 1090 Report of the Directors REPORT OF THE DIRECTORS - Cont’d
39 12. Property and equipment 14. Employment and employees 13. Dividend 15. Acquisition of own shares 16. Events after reporting date Movements in property and equipment during the year are shown in Note 22 to the financial statements. Employment of disabled persons It is the policy of the Bank that there should be no discrimination in considering applications for employment including those from physically challenged persons. All employees, whether or not disabled, are given equal opportunities to develop. As at 31 December 2023 no physically challenged person was employed by the Bank (2022: Nil). Employee’s involvement and training The Bank is committed to keeping employees as fully informed as possible regarding its performance and progress and seeking their views whenever practicable on matters which particularly affect them as employees. The Bank places high premium on the development of its manpower. The Bank’s expanding skill base has been extended by a range of training programmes provided for its employees whose opportunities for career development with the Bank have been enhanced. Health, safety at work and welfare of employees Health and safety regulations are in force within the Bank’s premises and employees are aware of the existing regulations. The Bank provides subsidy to all levels of employees for medical treatment, transportation, housing, etc. No dividends were declared and paid in 2022. The Board is recommending a dividend of 4 kobo per share for the year ended 31st December 2023. The Bank did not purchase its own shares during the year (2022: Nil). 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 2023 which had not been adequately provided for or disclosed. See note 39 for other disclosures relating to events after reporting date. Annual Report & Account 2023 REPORT OF THE DIRECTORS - Cont’d
40 17. Audit committee 18. Auditor Pursuant to Section 404 (3) of the Companies and Allied Matters Act 2020, the Bank has an Audit Committee comprising two Directors and three Shareholders: The composition of the Committee during the year under review is was as follows: In accordance with Section 401(2) of the Companies and Allied Matters Act 2020 Messrs. PricewaterhouseCoopers (Chartered Accountants) have expressed their willingness to continue in office as Auditors of the Bank. A resolution will be proposed at the Annual General Meeting authorizing the Directors to determine their remuneration. By order of the Board of Directors GEOFF O. AMAGHEREONU ESQ FRC/2013/PRO/NBA/002/00000002815 Company Secretary/Legal Adviser 23 Karimu Kotun Street, Victoria Island, Lagos. Date: 7th March 2024 1 Mr. Adekunle Alli - Chairman Shareholders' representative 2 Prince (Engr.) MOT. O. Tobun - Member Shareholders' representative 3 Mr. Gbadebo Ajeigbe - Member Shareholders' representative 4 AVM Olufemi Soewu (Rtd) - Member Director 5 High Chief Samuel Oni - Member Director Report of the Directors REPORT OF THE DIRECTORS - Cont’d
42 STATEMENT OF DIRECTORS’ RESPONSIBILITIES IN RELATION TO THE PREPARATION OF THE FINANCIAL STATEMENTS Directors’ responsibility In accordance with the provisions of the Companies and Allied Matters Act 2020, the Banks and Other Financial Institutions Act 2020 and the Financial Reporting Council of Nigeria Act No. 6, 2011, the Directors are responsible for the preparation of annual financial statements, which give a true and fair view of the financial position of the Bank at the end of the financial year and of the financial results for the year then ended. The responsibilities include ensuring that: i. The Bank keeps proper accounting records that disclose, with reasonable accuracy, the financial position of the Bank and complies with the International Financial Reporting Standards, the requirements of the provisions of the Companies and Allied Matters Act 2020, the Banks and Other Financial Institution Act 2020, the Financial Reporting Council of Nigeria Act No. 6, 2011 and relevent Central Bank of Nigeria Circulars & Guidelines for the Operations of Primary Mortgage Banks in Nigeria ii. Appropriate and adequate internal controls are established to safeguard its assets and to prevent and detect fraud and other irregularities iii. The Bank prepares its financial statements using suitable accounting policies supported by reasonable and prudent judgments and estimates that are consistently applied; and iv. It is appropriate for the financial statements to be prepared on a going concern basis. The Directors accept responsibility for the annual financial statements, which have been prepared using appropriate accounting policies supported by reasonable and prudent judgments and estimates in conformity with the International Financial Reporting Standards, the requirements of the provisions of the Companies and Allied Matters Act 2020, the Banks and Other Financial Institution Act 2020, the Financial Reporting Council of Nigeria Act No. 6, 2011, and relevent Central Bank of Nigeria Circulars & Guidelines for the Operations of Primary Mortgage Banks in Nigeria. The Directors are of the opinion that the financial statements give a true and fair view of the state of the financial position of the Bank and of its financial results. The Directors further accept responsibility for the maintenance of accounting records that may be relied upon in the preparation of financial statements, as well as adequate systems of internal control. Nothing has come to the attention of the Directors to indicate that the Bank will not remain as a going concern for at least twelve months from the date of this statement. By order of the Board of Directors HIGH CHIEF SAMUEL ONI FRC/2024/PRO/DIR/003/868224 Chairman Date: 7th March 2024 MOBOLAJI ADEWUMI FRC/2021/PRO/DIR/003/00000022431 Managing Director/CEO Date: 7th March 2024
43 We the undersigned hereby certify the following with regard to the audited financial statements for the year ended 31 December 2023 a. We have reviewed the report; b. To the best of our knowledge, the report does not contain: i. Any untrue statement of a material fact, or ii. Omit to state a material fact, which would make the statements, misleading in the light of the circumstances under which such financial statements were made; c. To the best of our knowledge, the financial statements and other financial information included in the report fairly present in all material respects the financial condition and results of operation of the Bank as of, and for the years presented in the report. d. We: i. Are responsible for establishing and maintaining internal controls. ii. Have designed such internal controls to ensure that material information relating to the Bank is made known to officers within the Bank particularly during the period in which the periodic reports are being prepared; CERTIFICATION PURSUANT TO SECTION 60(2) OF THE INVESTMENTS AND SECURITIES ACT NO. 29 OF 2007 iii. Have evaluated the effectiveness of the Bank’s internal controls as of date within 90 days prior to the report; iv. Have presented in the report of the Audit Committee our conclusions about the effectiveness of the Bank’s internal controls based on our evaluation as of that date; e. We have disclosed to the auditors of the Bank and Audit Committee: i. All significant deficiencies in the design or operation of internal controls which would adversely affect the Bank’s ability to record, process, summarise and report financial data and have identified for the Bank’s auditors any material weakness in internal controls, and ii. Any fraud, whether or not material, that involves management or other employees who have significant role in the Bank’s internal controls; f. We have identified in the report whether or not there were significant changes in internal controls or other factors that could significantly affect internal controls subsequent to the date of our evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. MOBOLAJI ADEWUMI FRC/2021/PRO/DIR/003/00000022431 Managing Director/CEO Date: 7th March 2024 For The Year Ended 31 December 2023 OLUWATOMI OLURINOLA FRC/2021/PRO/ICAN/001/00000025175 Financial Controller Date: 7th March 2024 Annual Report & Account 2023
44 STATEMENT OF CORPORATE RESPONSIBILITY FOR THE FINANCIAL STATEMENTS In line with the provision of S. 405 of CAMA 2020, we have reviewed the audited financial statements of the Bank for the year ended 31 December 2023 and based on our knowledge confirm as follows: a. The audited financial statements do not contain any untrue statement of material fact or omit to state a material fact which would make the statements misleading. b. The audited financial statements and all other financial information included in the statements fairly present, in all material respects, the financial condition and results of operation of the bank as of and for the period ended 31 December 2023. c. The bank’s internal controls have been designed to ensure that all material information relating to the bank is received and provided to the Auditors in the course of the audit d. The banks internal controls were evaluated within 90 days of the financial reporting date and are effective as of 31 December 2023. e. That we have disclosed to the bank’s Auditors and the Audit Committee the following information: i. There are no significant deficiencies in the design and operation of the bank’s internal controls which could adversely affect the bank’s ability to record, process, summarize and report financial data and have discussed with the auditors any weaknesses in internal controls observed in the cause of the Audit. ii. There is no fraud involving management or other employees which could have any significant role in the bank’s internal control. f. There are no significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of this audit, including any corrective actions with regard to any observed deficiencies and material weaknesses. MOBOLAJI ADEWUMI FRC/2021/PRO/DIR/003/00000022431 Managing Director/CEO Date: 7th March 2024 OLUWATOMI OLURINOLA FRC/2021/PRO/ICAN/001/00000025175 Financial Controller Date: 7th March 2024 Annual Report & Account 2023
45 CORPORATE GOVERNANCE REPORT INTRODUCTION Abbey Mortgage Bank Plc recognizes the fact that effective governance system is essential to retaining public trust and confidence in the way and manner we do our business. Our governance policies are structured to ensure maximum compliance with the provisions of the various laws and codes on the subject. These include the Central Bank of Nigeria Code of Corporate Governance of May 2014, the SEC Code of Corporate Governance dated 1 April, 2011, Nigerian Code of Corporate Governance, 2018, the Post Listing requirements of Nigerian Exchange Group (NGX) together with the amendments thereto, our internal Code of Corporate Governance and international best practices. Abbey’s Code of Corporate Governance is targeted at achieving the highest standards of transparency, accountability and good corporate behaviour in line with international best practices. The governance structures and processes are primed for the satisfaction of the various stakeholders including employees, shareholders, creditors, host communities and regulatory authorities. Abbey’s corporate ethos include accountability, transparency, integrity, fairness, discipline, communication, social and environmental responsibility, service excellence, responsible lending and stakeholder-rights’ recognition. Directors and employees are expected to act honestly, in good faith and in the best interest of the Bank in all transactions. The governance structure of the Bank is driven principally by the Board of Directors, whose members are equipped with the requisite academic qualifications and relevant industry experience and tools to discharge their roles in the Bank. The governance policies adopted by the Board are designed to ensure long-term www.abbeymortgagebank.com shareholder value. It is the primary responsibility of the Board to deliver sustainable shareholders’ wealth through its oversight functions. MEETINGS OF SHAREHOLDERS The general meeting of the Bank remains the highest decision-making organ and the primary avenue for interaction between the shareholders, Management and the Board. Annual General Meetings are conducted in an open manner allowing for free discussions on all issues on the agenda and in accordance with the provisions of the Companies and Allied Matters Act 2020, and the Articles of Association of the Bank. Venues for such meetings are always easily accessible. AUDIT COMMITTEE The Statutory Audit Committee is established in line with Section 404 (5) of the Companies and Allied Matters Act 2020. The Committee during the year comprised five members – Three members representing the shareholders and elected at the Annual General Meeting and two Non-Executive Directors. The Committee meets at least four times a year but could also meet at any other time should the need arise to enable it discharge its statutory duties as provided under the Act. The membership of the Committee during the year under review was as follows: Shareholders’ Representatives Mr. Adekunle Alli Prince (Engr.) MOT O. Tobun Mr. Gbadebo Ajeigbe Directors’ Representatives AVM Olufemi Soewu (Rtd) High Chief Samuel Oni CORPORATE GOVERNANCE REPORT - Cont’d
46 Corporate Governance Report CORPORATE GOVERNANCE REPORT - Cont’d BOARD OF DIRECTORS During the year under review, the Board was made up of a Non-Executive Chairman, six (6) Non-Executive Directors, two (2) Executive Directors and two (2) Independent Non-Executive Directors. Appointment to the Board is made by the shareholders at the Annual General Meeting upon recommendation by the Board of Directors. The Board is accountable and responsible for the affairs of the Bank by ensuring that its operations at all times are carried out within the legal and regulatory framework. The Board’s responsibilities and duties include, but are not limited to, defining the Bank’s business strategic goals, formulating effective risk management policies, leadership, enterprise, integrity and judgment in directing the Bank so as to achieve continuing prosperity and to act in its best interest in a manner based on transparency, accountability, good corporate governance and equity. The Board meets at least once every quarter but may hold other sessions to address urgent matters requiring its attention. Its oversight functions are performed through the following Committees: Board Credit & Risk Management Committee Board Audit & Compliance Committee Board Strategy & Financial Analysis Committee Board Governance & Remuneration Committee Board Credit & Risk Management Committee Board Strategy & Financial Analysis Committee AVM. Olufemi Soewu (Rtd) Chairman Mr. Obinna Ufudo Chairman High Chief Samuel Oni Member Mr. Mobolaji Adewumi Member Mr. Oladipupo Adeoye Member Mr. Obinna Ufudo Member Mrs. Christabel Onyejekwe Member Ms. Jewel Okwechime Member Mr. Mobolaji Adewumi Member Mr. Oladipupo Adeoye Member
47 Annual Report & Account 2023 FREQUENCY OF BOARD AND BOARD COMMITTEE MEETING Provided below are details of Board and Board Committee meetings held in 2023 showing the frequency of the meetings and attendance of members. BOARD MEETINGS KEY: P = Present AWA = Absent with apology R = Retired Board Governance & Remuneration Committee Mrs. Christabel Onyejekwe Chairman Prof. Marius Umego Member Brig-Gen John Obasa (rtd.) Member Ms. Chika Ochonogor Member Ms. Jewel Okwechime Member Prof. Marius Umego Member Brig-Gen John Obasa (rtd.) Member Ms. Chika Ochonogor Member AVM. Olufemi Soewu (Rtd) Member Board Audit & Compliance Committee High Chief Samuel Oni Chairman CORPORATE GOVERNANCE REPORT - Cont’d S/N MEMBERS 7-MAR-23 27-APR-23 25-JUL-23 27-OCT-23 14-DEC-23 1 Mazi Emmanuel Kanu Ivi P P P P P 2 Mr. Mobolaji Adewumi P P P P P 3 Mr. Oladipupo Adeoye P P P P P 4 AVM. Olufemi Soewu (rtd) P P P P P 5 High Chief Samuel Oni P P P P P 6 Mr. Nonso Okpala P P R R R 7 Prof. Marius Umego P P P P P 8 Brig-Gen John Obasa (rtd) P P P P P 9 Mrs. Christabel Onyejekwe P P P P P 10 Ms. Jewel Okwechime P P P P P 11 Ms. Chika Ochonogor P AWA P P P 12 Mr. Obinna Ufudo* P P **Mr Obinna Ufudo joined the board on 25th July 2023
48 GOVERNANCE AND REMUNERATION COMMITTEE S/N MEMBERS 10-Feb-23 24-May-23 11-Jul-23 24-Jul-23 11-Oct-23 05-Dec-23 1 Mrs. Christabel Onyejekwe P P P P P P 2 Prof. Marius Umego P P P P P P 3 Ms. Jewel Okwechime P P P P P P 4 Ms. Chika Ochonogor P P P P P P 5 Brig-Gen John Obasa (rtd) P P P P P P AUDIT AND COMPLIANCE COMMITTEE S/N MEMBERS 20-FEB-23 19-JUL-23 12-OCT-23 1-DEC-23 1 High Chief Samuel Oni P P P P 2 AVM. Olufemi Soewu P P P P 3 Prof. Marius Umego P P P P 4 Ms. Chika Ochonogor P P P P 5 Brig-Gen John Obasa (rtd) P P P P STATUTORY AUDIT COMMITTEE S/N MEMBERS 15-MAR-23 8-AUG-23 7-NOV-23 15-DEC-23 1 Mr. Adekunle Alli P P P P 2 Eng. M.O.T. Tobun P P P P 3 Mr. Gbadebo Ajeigbe P P P P 4 AVM. Olufemi Soewu P P P P 5 High Chief Samuel Oni P P P P STRATEGY AND FINANCIAL ANALYSIS COMMITTEE S/N MEMBERS 20-APR-23 20-JUL-23 24-OCT-23 12-DEC-23 1 Mr. Nonso Okpala P R R R 2 Ms. Jewel Okwechime P P P P 3 Mrs. Christabel Onyejekwe P P AWA P 4 Mr. Mobolaji Adewumi P P P P 5 Mr. Dipo Adeoye P P P P **Mr Nonso Okpala resigned on 15th June 2023 and Mr Obinna Ufudo joined the board on 25th July 2023 CREDIT AND RISK MANAGEMENT COMMITTEE S/N MEMBERS 22-FEB-23 31-MAR-23 13-JUN-23 13-JUL-23 20-OCT-23 7-DEC-23 1 AVM. Olufemi Soewu (rtd) P P P P P P 2 High Chief Samuel Oni P P P P P P 3 Mr. Nonso Okpala* P P AWA R R R 4 Mr. Obinna Ufudo* P P 5 Mr. Mobolaji Adewumi P P P P P P 6 Mr. Dipo Adeoye P P P P P P **Mr Nonso Okpala resigned on 15th June 2023 and Mr Obinna Ufudo joined the board on 25th July 2023 Corporate Governance Report CORPORATE GOVERNANCE REPORT - Cont’d
Annual Report & Account 2023 BIOGRAPHICAL NOTES ON PERSONS FOR ELECTION/RE-ELECTION AS DIRECTORS CORPORATE GOVERNANCE REPORT - Cont’d 49 Obinna C. Ufudo Obinna C. Ufudo is a multi-sector management professional with extensive Board level experience. His 30 years post graduate work experience spans across banking, organizational set-up, financial strategy, professional management and corporate turnaround. He holds a Bsc. degree in finance from Enugu State University of Technology, MBA from the University of Navara, Spain and Msc. in International Securities Investment & Banking from the University of Reading, UK. He was the President/CEO of the Transnational Corporation of Nigeria (Transcorp). He is the Chairman of Atiat Limited as well as Chairman of Loan Book Limited
50 www.abbeymortgagebank.com BIOGRAPHICAL NOTES ON PERSONS FOR ELECTION/RE-ELECTION AS DIRECTORS CORPORATE GOVERNANCE REPORT - Cont’d Mrs. Adenike Kuti Mrs Adenike Kuti is a Chartered Accountant and Corporate Finance Professional. Her experience cuts across business development, mergers & acquisitions, and investment banking. She obtained her first degree in accounting from the University of Lagos, and further obtained a master’s degree in Finance and Investment with First Class Honors from the Nottingham University Business School. She also holds an MBA from the University of Oxford. She has at various times worked for Leapfrog Investments Limited, Africa Finance Corporation, KPMG and Vetiva Capital Limited. As an Associate Director of Leapfrog Investments, she structured, executed, and managed its investment portfolio of 350m USD in Ghana, Kenya and Nigeria. She is the founder of Oakheirs Limited which played a pivotal role in the merger of CAP Plc and Portland Paints Plc. She also sits on the Board of E-finance Limited as a NonExecutive Director.