Abbey Bank targets November commercial banking take-off

Abbey Bank Plc has announced plans to commence commercial banking operations in November 2026 following approval by the Central Bank of Nigeria (CBN), marking a major shift in its business strategy after more than three decades in mortgage financing.

The bank, formerly known as Abbey Mortgage Bank Plc, said its transition to a regional commercial bank would enable it to expand beyond mortgage and construction finance into retail banking, small and medium-sized enterprises (SMEs), trade finance and corporate banking.

The Managing Director and Chief Executive Officer, Mobolaji Adewumi, disclosed that the bank had raised its capital base to more than ₦70 billion, exceeding the ₦50 billion minimum requirement for a regional commercial banking licence.

According to him, the CBN granted the bank its commercial banking licence in June 2026 after a capital-raising exercise that attracted existing shareholders and new investors.

Adewumi said the transition would enable the bank to serve a wider range of customers and businesses while strengthening its participation in Nigeria’s housing and infrastructure development value chains.

He explained that the bank’s decision to pursue a commercial banking licence was informed by the limitations of mortgage banking, which restricted its ability to finance several businesses involved in property development and construction.

He noted that developers, building materials suppliers, construction companies and prospective homeowners all required financial support beyond what a mortgage bank could provide.

“We need to be able to support the entire value chain instead of allowing people to take the money and go to commercial banks. That was where the decision to convert to a commercial bank came from,” Adewumi said.

He added that the bank intended to build on its experience in mortgage financing while expanding into other segments of the financial services industry.

The bank’s transition comes amid growing competition in Nigeria’s banking sector, with Adewumi expressing confidence that its understanding of the housing and construction ecosystem would provide a competitive advantage.

He identified construction finance, infrastructure projects and businesses operating across the property development value chain as immediate priorities, noting that the bank would gradually expand into other sectors.

Adewumi also disclosed that Abbey had invested in technology, strengthened its workforce and upgraded its banking infrastructure ahead of the commencement of commercial operations.

He said the bank was enhancing its mobile banking and corporate internet banking platforms while integrating artificial intelligence into its technology systems to improve service delivery.

According to him, the institution has spent the past three to four years strengthening its workforce by recruiting professionals with commercial banking experience in preparation for the transition.

He expressed confidence that the bank would commence operations with the capacity to compete effectively, adding that improved customer service and faster decision-making would be central to its strategy.

Adewumi said the bank would also pursue a national banking licence in the medium to long term, subject to meeting the applicable regulatory requirements.

He explained that its current regional licence permits operations in Lagos, the South-West, South-South and North-West, while expansion into the South-East, North-East and North-Central regions would require a broader licence.

The bank’s expansion plans are backed by improved financial performance, with its pre-tax profit rising to ₦3.12 billion in 2025 from ₦1.22 billion in 2024.

The management said the performance provided a stronger financial foundation for the institution as it prepared to enter the commercial banking market.

On housing finance, Adewumi said the bank planned to introduce and expand products that would enable customers to develop their properties in stages rather than requiring them to obtain financing only when purchasing completed houses.

He explained that the proposed approach would allow customers who already owned land to access financing for different stages of construction, including roofing and other building works.

According to him, the bank also intends to support affordable housing initiatives by working with developers and exploring financing models that can accommodate low-income earners.

He cited examples of property development schemes in which land is sold in smaller plots and payments are spread over time, saying such models could help more Nigerians become property owners.

The bank also identified SMEs and women-owned businesses as key target markets under its expanded commercial banking operations.

Its management said it planned to deploy digital banking services, payment collection solutions, point-of-sale services and credit products to support SMEs.

The bank further disclosed plans to expand financing opportunities for women entrepreneurs beyond the construction sector, building on its existing WIRE product, which was designed to support women operating in the construction finance space.

On risk management, the management said it would prioritise regulatory compliance, prudent lending, adequate capital buffers and effective risk-monitoring procedures to safeguard the institution’s financial stability.

An executive director of the bank said its capital position would support the level of risk permitted under its current licence, while additional capital would be raised as the institution expands its operations.

He added that the bank could explore other funding sources, including commercial papers and bonds, as part of its long-term capital strategy.

The management maintained that its transition to commercial banking would create opportunities to serve a broader customer base while building on its experience in mortgage financing and real estate development.