Shareholders of Abbey Mortgage Bank Plc have endorsed a reduction of the company’s issued share premium by N3.541 billion proposed by the board of directors.
The approval was given as part of a special resolution at an extraordinary general meeting of the company held in Lagos.
Special resolution
At the EGM, the shareholders considered and passed the following resolution as a special resolution:
- “That subject to the confirmation of the court, the company’s issued share capital (including for this purpose its share premium account) be reduced by N3.540,633,102 which has been lost or otherwise unrepresented by available assets and that the credit arising from the reduction be used to eliminate the retained loss in the company’s audited financial statements as at December 31, 2022.
- That the directors of the company be authorized to do all such things and acts and to approve, sign execute all documents which in their opinion may be necessary, expedient, or appropriate to effectuate, implement, and carry out the resolution including without limitation to seek confirmation from the Federal High Court.”
Addressing shareholders at the EGM, the Chairman of the company, Mazi Emmanuel Kanu noted that a review of Abbey Mortgage Plc’s financial statement for the year ended 31st December 2022 established a deficit of N3.541 billion as accumulated permanent losses from legacy transactions.
Rationale
Kanu explained that the balance sheet restructuring proposed would not affect the company’s issued share capital or regulatory capital but would result in a reduction of the credit balance in the company’s share premium account.
He noted that the shareholder’s funds would remain unchanged, adding that it would not impact the company’s creditors but rather pave the way for shareholders to receive dividends out of the company’s future profits.
Mechanics
Kanu noted that in terms of mechanics and structure, the company’s board of directors is proposing a reduction of N3,540,633,102 from the company’s share premium capital account of N5,117,137, 249.90 under the provisions of sections 131and 132 of the Companies and Allied Matters Act 2020.
- “The reserve arising from the reduction would be deployed to eliminate the negative retained earnings as of the 2022 financial year-end,” he said.
2022 financials
Abbey Mortgage Bank Plc’s audited financial results for the full year ended December 31, 2022, showed impressive performance across major indices.
The full-year financials, filed by the Bank at Nigerian Exchange Limited (NGX), showed that interest income rose significantly to N2.03 billion from N1.63 billion recorded in the 2021 financial year, representing 24.53% growth.
This is on the back of increasing inflation, which the economy continues to struggle with.
The headline inflation rate rose to 22.04% in March, a 0.13% increase from the 21.91% rate recorded in February, according to the latest report published by the Nigerian Bureau of Statistics (NBS) on Friday.
The report said the increase was buoyed by the jump in prices of food, housing, fuel, and gas, among others. The figure shows a consistent increase in the inflation rate for the last two years.
On a year-on-year basis, the headline inflation rate was 6.13% points higher compared to the rate recorded in March 2022 which was 15.92%.
The financial results obtained by Nairametrics showed that the bank reported a 21.89% growth in total operating income from N233.60 million in 2021 to N284.75 million in 2022.
Despite the highly challenging global economic and business environment, Abbey recorded a profit before tax growth of 25.14% to close the year under review at N827.26 million, from N661.19 million recorded in 2021.
Profit after tax (PAT) grew by 23.14% to N766.16 million in 2022, compared to N622.19 million recorded the year before.