Aso Savings And Loans Posts Impressive Annual Results

Nov. 10, 2011 - PRLog -- ASO Savings and Loans Plc, one of the leading mortgage banks in the country has posted impressive annual results for the year 2010/2011, giving a boost to the nation's financial market.

The annual results released recently reflected a robust improvement upon 2009/2010 which was largely characterized by substantial loan loss provisioning.

In the bank’s financial year under review, it achieved growth in virtually all indicators, but most reassuringly in an emphatic return to profitability after a substantial loss the previous year. The bank posted profit before taxation (PBT) of N1.9bn and profit after taxation (PAT) of N1.2bn which were over 160% and 137% higher respectively, than in 2009/2010 financial reports.

The bank’s report also showed rising gross earnings, which at over N11.0bn, translates to 9.9% improvement year-on-year (y-o-y) and represents modest but marked growth compared to previous years.

The Operating expense growth was also moderate at 8.2% y-o-y according to the report, but impressively well below estimated 2010 country annual inflation rate of 13.7%, while cost to-income ratio stood at 83.0%.

At 40%, return on shareholders’ funds is substantial and a rough proxy measure of the bank’s significant viability when compared with its estimated total cost-of-funds in the early-to-mid teens.

The bank also posted a corresponding improvement in the size and quality of its balance sheet which credibly supports the impressive trends in earnings and profitability. Total assets, especially placements (30.6%), grew substantially, but although gross loans and advances declined marginally (-1.4%) to N38.5bn from N39.1bn in 2009/10; an over-compensating reduction (16.5%) in non-performing loans (2010/11-N5.5bn vs. 2009/10-N6.5bn) caused a growth in net loans and advances.

Mortgage loans constitute 66% of total loans, solidifying  the bank’s credentials as first and foremost a mortgage banking institution.

Deposits and current accounts surged 44.1% y-o-y; and with N3.0bn in shareholders’ funds, ASO is relatively handily placed to achieve the revised minimum capitalization for mortgage banks of N5bn, widely speculated to be announced shortly by the Central Bank of Nigeria.

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