By Adedapo Adesanya
Abbey Mortgage Bank Plc is planning to meet its free float requirement of 20 per cent at the Nigerian Exchange (NGX) Limited next year.
The Managing Director of the bank, Mr Mobolaji Adewumi, stated this on Thursday during the company’s Facts Behind the Figures presentation at the bourse, where it trades its stocks.
According to Mr Adewumi, the firm, in 2022, had assured the NGX that would meet the free float requirement by 2025, adding that the lender was on course to meet the target evidenced by a year-on-year rise in its target.
The NGX requires companies to allow at least 20 per cent of their issued share capital to be in the hands of the investing public, while the directors and others can hold on to the remaining 80 per cent.
At the moment, the company falls short of this requirement by 6.85 per cent after it released about 602 million units of shares to the public last year.
“We remain committed to ensuring that the full plan is met before the deadline of 2025. One thing that is clear in our shareholding structure is that the free float percentage moved from 7.22 per cent to 13.15 per cent by the end of 2023.
“I’m sure by the time we come back here, the figure will be much higher than that and by 2025, we will have full compliance,” he said.
Mr Adewumi also noted that it is working towards reducing its Non-Performing Loans (NPLs) in the mortgage industry, which is a source of worries for investors.
“The NPLs are quite high. In 2020, when VFD Group invested in Abbey, NPL was around 75 per cent and if you look across most of the mortgage banks, you will see high NPLs.
“The regulatory minimum for mortgage banks is 20 per cent, but when you start seeing figures like 25-30 per cent, then it becomes a worry,” the bank chief executive said.
He said that over the last three years, Abbey Mortgage Bank had worked towards crashing its NPL, affirming its seriousness in the industry.
“We are already on eight per cent, which is far below what you will get from most mortgage banks,” he stated.
He also assured investors and other stakeholders that the bank was prepared to meet any minimum capital requirements set by the Central Bank of Nigeria (CBN), building on the N3 billion it cashed in during its last capital raise.
Last year, the Governor of the CBN, Mr Olayemi Cardoso, revealed that there was a high possibility of recapitalisation in the banking industry as part of President Bola Tinubu’s goal of making Nigeria a $1 trillion economy.