Infinity Trust Mortgage Bank To Raise N50 Billion Capital For Expansion

… seeks govt single digit loan scheme for industry

Infinity Trust Mortgage Bank has said that as part of its growth trajectory drive, it’s poised to raise the sum of N50 Billion for expansion of its services in the domestic economy.

The bank said its ambitious plan to revolutionize digital commercial banking, focuses on MSMEs and unbanked individuals, saying it’s targeting 39 million MSMEs with limited access to finance; addressing the 0.3% commercial banking credit gap; leveraging technology for efficient and low-interest financing.

Infinity Trust Mortgage Bank acting Chief Executive Officer (CEO), Mrs. Ngozi Chukwu who made this disclosure on the Lagos floor of the Nigerian Exchange Limited (NGX), on Thursday during the bank’s Fact Behind The Figure presentation noted that, the bank aims at strategic focus on financial inclusion, data-driven partnerships, industry expertise, product innovation, and cost efficiency.

Further on the utilization of the fund, Mrs. Chukwu said, “we want to bridge this gap, because 0.3% you we agree with me is way too small for the sector that drives economic growth. Over 75% of SMEs rely on internal capital to grow, to grow, which is considered largely inadequate and of course, inefficient. We’ll leverage on technology and digital tools to reach the target customers in an efficient manner that will lead to lower interest rates, higher returns through volume of transactions.

“So there are six main points that we will anchor our equations on. And this includes to drive financial inclusion, data and technology partnerships, deep industry knowledge, product innovation and customization and cost efficiency. Now, to explain further, we’ll provide financial services to underserved and underbanked individuals to align with the CBN strategic goals of increasing financial inclusion by 80%. We also will leverage on data collection. So we are not only just going to be rolling out products, we are going to do our research, using data and technology to understand the needs of our customers, and when we do, when we identify the customer needs, we will develop relevant digital delivery channels for these customers. We believe a lot in relationships, so we are going to be building relationship with strategic partners such as cooperatives and development agencies across the underserved sectors to provide customized lending products for them. For deep industry knowledge, we are going to be working with people who know the industry, people who understand the market needs, people who are experts in what they do. They are going to leverage on their knowledge to be able to provide excellence service to our customers, product innovation and customization. So we do not intend to just throw products at our customers. We are going to research and understand their needs, and then we are going to have products that are made to meet the needs of these customers. Cost efficiency. We utilize technology. We are going to utilize technology driven models to drive cost efficient processes that will help us increase savings and possibly impact cost of customer products, so our customers will not have to bear the heavy burden of high product cost, because we use technology to drive down cost, hence to be able to afford our product.

“So these different fields are what we are going to go into to be able to create value with the money that we are going to raise, digital banking, transportation and logistics, asset management, healthcare and pharmaceutical real estate, green finance, agriculture, foreign exchange, women and youth empowerment, real sector financing. Summary of our key metrics projection. So this is essentially a five year projection of what our share performance would be like, our dividend per share by the end of 2024 we believe should not be less than 42 kobo.

Speaking further on the bank business growth in mortgage industry, Mrs. Chukwu said, the bank’s commitment is geared towards creating shelter and then to reduce the housing deficit, which everybody has talked about, “we have financed several estates. There’s the Abuja model city. This is an estate that houses about 351 families. It’s a mixed income estate and is valued at about 20 billion naira. This was completed as a joint venture with the Federal Housing Authority. We did yet another project, and this is in some city estate which are located somewhere in Dalajima. This estate houses about 2200 families. Is a mixed income housing estate, and it’s valued at about 50 billion naira, 85% completed and sold.

“We financed yet another project in Abuja, and this one is the Mona gardens estate Abuja. It houses about 37 families. It is luxury housing estate, and it’s valued at about 5 billion naira. It’s fully completed and fully sold out. We do not only cater to the high in building, we also financed low and medium income housing, and this one is located in winter, just in Paris, houses about 900 families and about 9 million naira. So we are not only in Abuja, we also are financing something in Lagos. In fact, we have financed a couple of projects. They were basically partnerships. But this particular one, we are solely financing it, and it is called the Skyview estate Ikeja, currently is under construction, about 40% completed, but when completed, it should house about 40 families.

“We also did a comparison, the regulatory ratio. So how did Infinity Trust market fair as regards the regulatory ratios and industry average for capital adequacy ratio in 2020, by May 2024, the industrial average was 13.7% the CBN regulation, the baseline is 10% infinity had 35% liquidity ratio. Industry average was 48.7% CBN requirements is minimum of 20% infinity had 50% for the non performing role, industrial average was 19.9%.

“CBN regulation says it shouldn’t be more than 30%, Infinity Trust Mortgage was at 3.2%. Now this speaks to the Quality of artistic assets. Also speaks to our strong risk management practices. Return On Assets, industrial average was 3.58% infinity was 6.3% now this should give comfort to our investors around return on equity. Industrial Average was 6.59% infinity was 51% way higher Industrial Average.

“Mortgage industry contribution
to GDP. This does not tell a good story, because, as you can see on the table, we are comparing ourselves with other clients. We are this nali poor, 0.3% is not even up to 1% that is what we contribute as a mortgage industry to GDP. This is, this is totally not accepted. This tip of trace is what I said earlier, that that there is room for growth. There’s a lot of opportunity yet to be harnessed, and there are just two things we need to do.
If we’re able to supply increase. And how do we do this? If we fund, we are able to give funding to developers to be able to produce mass housing, if we are able to do this and then, on the other hand, stimulate demand by making available affordable mortgage packages for subscribers. This will change. This will change if we can do this now, there’s a reason for that poor story, and that’s what I’m going to be sharing.

Challenges:

What are the challenges? “Why are we not thriving as a mortgage industry? In Nigeria, there are couple of reasons which I’m going to share, like in South Africa, we saw they contributed 1% to their GDP. They have a single digit interest rate, they have access to long term funding. That is not the case with us. So the lack of availability of long term cheap funds and that single digit has been a major challenge. Interest rate today, NPR is almost 27%, an NPR is what determines every other thing, the rate, both lending and
and NPR is what determines every other thing. So if CBN NPR is 27%, what margin do you put on your funds. When you are lending, what is your cost of funds? So of course, the interest rate will be very high, and it is very high currently. And you know, the effect of high interest rate is that it reduces affordability. A lot of people cannot afford to take mortgage that’s at the high rate, and then the people who struggle to even take it, they starts to default, and of course, that hampered our growth, too. As an industry, rising cost inflation has overtaken everything”, she added.

The Bank’s Chairman, Mrs. Ene Okwa Iyana in her comments while highlighting the bank’s unwavering commitment to excellence, resilience, and growth, noted that, the bank has not missed a dividend payment since its listing in 2013 and has a track record of paying dividends.

“The bank’s mission is to provide innovative, customer-centered solutions, fostering sustainable growth and creating long-term value.

“The bank reported a 150% dividend growth in 2023 and a 50% increase in loans and advances. “The bank plans to raise N50 billion through private placement to expand into digital banking and MSME financing. Challenges include high interest rates, rising costs, and government policy issues.

Speaking earlier, the NGX CEO, Mr. Jude Chiameka said, to make raising of fund seamless in the capital market, the exchange recently launched the ngx digital investment platform, simplifying primary markets issuances and capital raising, particularly for young Nigerians.

According to him, the platform supports infrastructure funding through targeted financial instruments such as infrastructure bonds and infrastructure funds, bridging Nigeria’s funding gap and driving sustainable economic development.

“NGX is reviewing listing rules to lower barriers to entry and attract more companies, aiming to increase market participation, liquidity, and alignment with international standards. NGX’s advocacy efforts with the Nigerian government on tax reforms and foreign exchange allocation enhance investor confidence and market stability. Engagement with International Community and Market Performance.