LivingTrust Mortgage Bank Plc Reports 30% Profit Growth in H1 2025 Despite Rising Interest Expenses

LivingTrust Mortgage Bank Plc has posted a strong performance for the half year ended June 30, 2025, with profit after tax rising 30.1% year-on-year to ₦551.28 million, up from ₦423.65 million reported in the same period of 2024.

This growth was supported by higher gross earnings and improved fee-based income, although rising interest expenses continue to exert pressure on net interest margins.

Key Financial Highlights (January – June 2025 vs January – June 2024)

Earnings Growth Driven by Non-Interest Income

Despite a 42.7% decline in net interest income, from ₦809.65 million in H1 2024 to ₦463.62 million in H1 2025, LivingTrust Mortgage Bank was able to grow its bottom line, thanks to significant growth in non-interest income components.

• Fee and commission income more than doubled to ₦86.88 million, compared to ₦40.27 million in the prior period.

• Other operating income, which includes Treasury bill interest, rose sharply to ₦542.98 million, from ₦284.96 million — a 90.5% increase.

• Notably, Treasury bill interest income surged over tenfold to ₦342.79 million, from just ₦31.69 million in H1 2024.

Interest Expenses Erode Net Interest Margin

Interest and similar expenses ballooned to ₦1.58 billion, compared to ₦585.66 million in the same period last year — a 170.6% increase. This rise significantly eroded the bank’s net interest margin, which fell to ₦463.62 million.

The increase suggests higher funding costs, possibly driven by more expensive deposit liabilities or rising market rates. While gross interest income rose 46.8% to ₦2.05 billion, it was not enough to offset the surge in interest expense.

Cost Management and Operating Efficiency

Operating expenses rose to ₦869.20 million, up from ₦617.93 million in H1 2024, reflecting inflationary pressures and increased personnel costs.

• Personnel expenses rose 30.3% to ₦334.57 million

• Other operating expenses grew 56.1% to ₦475.20 million

• Amortization and depreciation expenses held relatively steady.

Despite the increase, the cost-to-income ratio remains within acceptable thresholds due to strong revenue growth.

Asset Quality and Impairment Charges

The bank recorded a minimal impairment charge of ₦4.53 million, a significant reduction from the ₦125 million recorded in H1 2024. This signals improved asset quality and a possible reduction in non-performing loans or provisioning risks.

Quarterly Momentum: Q2 Outperforms Year-Ago Quarter

In the second quarter (April–June 2025), the bank posted a profit after tax of ₦319.16 million, compared to ₦193.17 million in Q2 2024 — representing a 65.2% quarterly growth. This confirms operational resilience and sustained earnings momentum.

Earnings per Share Strengthens

Earnings per share (EPS) rose from 8.47 kobo in H1 2024 to 11.03 kobo in H1 2025 — aligning with the 30% growth in net profit and reinforcing the bank’s value delivery to shareholders.

Outlook

LivingTrust Mortgage Bank’s H1 2025 results demonstrate robust earnings growth supported by non-interest revenue streams, despite margin pressure from rising interest costs. The bank’s ability to control impairments and expand fee-based income provides a buffer against macroeconomic challenges.

However, sustained increases in funding costs could weigh on net interest margins unless rebalanced through asset repricing or strategic capital raising.

The bank’s performance in H2 2025 will largely depend on its cost efficiency, asset quality management, and the ability to maintain non-interest income momentum in a volatile interest rate environment.