Shareholders of Abbey Mortgage Bank Plc have endorsed a reduction of the company’s issued share capital 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 (EGM) of the company held in Lagos, recently.
“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 authorised to do all such things and acts and to approve, sign and 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,” the resolution stated.
Addressing shareholders at the EGM, chairman of the company, Emmanuel Kanu, noted that a review of Abbey Mortgage Plc’s financial statement for the year ended December 31, 2022 established a deficit of N3.541 billion as accumulated permanent losses from legacy transactions.
Kanu explained that the balance sheet restructuring proposed will 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.
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 131 and 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.
It will be recalled that 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 percent growth.
The financial results showed that the bank reported a 21.89 percent 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. percent to close the year under review at N827.26 million, from N661.19 million recorded in 2021.
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