Abbey Mortgage Bank Plc says it has reduced its non-performing loan (NPL) ratio from about 80% to zero following a debt recovery exercise, as it transitions into regional commercial banking.
The bank’s Managing Director and Chief Executive Officer, Mobolaji Adewumi, disclosed this on Wednesday at a media chat in Lagos, saying the current management inherited substantial legacy debts when it assumed office in 2020.
According to Adewumi, some of the outstanding loans dated back to 2007 and 2008, requiring negotiations with borrowers, settlements and the recovery of assets pledged as collateral.
- “When we assumed office, the bank’s non-performing loan ratio was about 80%. We had to take a step back and assess what needed to be done to reposition the institution,” he said.
He added that the bank introduced stricter lending procedures to prevent a recurrence of the challenges associated with its previous loan portfolio, helping it return to profitability within three years of the management changes.
Abbey Bank raises N64 billion for commercial banking transition
Adewumi said the decision to move beyond mortgage banking followed an assessment of financing opportunities across the housing value chain, including property developers, building material suppliers, importers and other related businesses.
- He explained that the bank’s previous mortgage banking licence limited its ability to finance some of these businesses, prompting it to seek a broader licence to support its expansion.
- Discussions with the Central Bank of Nigeria (CBN) on the transition began in 2023, while approval in principle was received in October 2024.
- The bank subsequently raised N64 billion, exceeding its initial target of N40 billion, with the funds cleared by the CBN. It received its regional commercial banking licence in June 2026.
Adewumi said the new licence would also help address the high cost of funds that has constrained mortgage lending by broadening the bank’s funding options, including through retail deposits.
Bank plans eight locations, adopts digital first strategy
As it enters the commercial banking market, Abbey Bank plans to combine digital banking with a physical presence, with eight locations planned as part of its expansion.
Adewumi said the bank had recruited professionals across treasury, trade finance, corporate banking, retail banking, electronic banking and risk management to support its new operations.
Executive Director of Business Development, Dipo Adeoye, said the bank would need to establish a distinct competitive position in a market dominated by larger financial institutions.
He said Abbey Bank intended to build on its mortgage financing experience while expanding its digital services, physical presence and lending to businesses across the housing value chain.
Abbey Mortgage Bank says risk controls will remain central
The Executive Director of Finance, Risk and Operations, John Okonkwo, said the bank’s improved risk management framework had been central to its efforts to maintain a healthy loan portfolio.
- “At the moment, our non-performing loan (NPL) ratio is zero,” Okonkwo said, adding that the bank would retain the risk management principles applied to its mortgage business as it expands into commercial banking.
He also disclosed that the bank had introduced an investor relations framework to enable minority shareholders to raise concerns and obtain relevant information. The board has three independent non-executive directors, he said.
How Abbey secured commercial banking licence
Earlier in June this year, Nairametrics reported that Abbey Mortgage Bank Plc, had secured regulatory approval from the Central Bank of Nigeria (CBN) to convert into a commercial bank.
- The approval was expected to unlock a major strategic milestone for the company, allowing the bank to expand beyond mortgage financing into comprehensive commercial banking services.
- Before that approval, Abbey’s transition to commercial banking had been in motion for months, supported by strategic decisions and strong financial performance.
At the Annual General Meeting (AGM) held on May 26, 2026, shareholders approved a N164.5 billion private placement and authorised the board to raise an additional N100 billion through various equity and debt instruments, subject to regulatory approvals.