Emmanuel OchayiIn a move aimed at paving the way for future dividends, shareholders of Abbey Mortgage Bank Plc have resoundingly endorsed the board of directors’ proposal to reduce the company’s issued share capital by N3.541 billion.
This landmark decision was made at an extraordinary general meeting (EGM) held in Lagos, where shareholders gave their resounding approval as part of a special resolution.
Mazi Emmanuel Kanu, Chairman of Abbey Mortgage Bank, addressed the shareholders at the EGM, highlighting the rationale behind this strategic move.
He explained that a careful review of the bank’s financial statements for the year ended December 31, 2022, revealed a deficit of N3.541 billion due to accumulated permanent losses from legacy transactions.
Kanu emphasized that this balance sheet restructuring would not impact the company’s issued share capital or regulatory capital. Instead, it would lead to a reduction in the credit balance in the company’s share premium account.
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Importantly, this decision will leave the shareholder’s funds unchanged and have no adverse effect on the company’s creditors.
The reduction, totaling N3,540,633,102, will be made from the company’s share premium capital account of N5,117,137,249.90, adhering to the provisions of sections 131 and 132 of the Companies and Allied Matters Act 2020.
The reserve created through this reduction will be used to eliminate the negative retained earnings as of the 2022 financial year-end.
Abbey Mortgage Bank Plc’s audited financial results for the full year ended December 31, 2022, also came under the spotlight during the EGM.
The bank showcased impressive performance across major indices, with interest income surging to N2.03 billion, marking a 24.53% growth compared to the previous year.
This remarkable financial performance occurred in the midst of rising inflation, which reached 22.04% in March 2023, according to data from the Nigerian Bureau of Statistics.
Despite the challenging economic environment, Abbey Mortgage Bank recorded a substantial profit before tax growth of 25.14%, closing the year at N827.26 million, up from N661.19 million in 2021. Profit after tax (PAT) also witnessed impressive growth, reaching N766.16 million in 2022, compared to N622.19 million the previous year.
With the approved capital reduction and robust financial results, Abbey Mortgage Bank Plc looks set to unlock new opportunities for its shareholders and further strengthen its position in the Nigerian banking sector.
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