Managing Director, TrustBond, Mortgage Bank Plc, Mr. Adeniyi Akinlusi has said the bank is poised towards effective mortgaging with over N20 billion to drive home-ownership across the country.
Akinlusi stated this at the 7th Annual General Meeting of the company in Lagos, recently, adding that the bank recorded a total asset of N9.7billion at the year-end of 2015, representing a 7 per cent increase over the previous year’s figure.
He said the principal objective was to address the long term funding constraints hindering the growth of the primary mortgage market while reducing the funding cost of residential mortgages and enhancing access to housing by Nigerians, especially the low to the middle income.
On the achievements of the company, especially from their transition from a real estate development company to a mortgage firm, as directed by the new CBN regulations prohibiting mortgage banks from real estate development, he said though it affected their earnings initially they, however, quickly came out of it.
He explained that customers’ deposits in 2015 amounted to N2. 1 billion, representing 11.3 per cent growth over the 2014 financial year, despite the regulatory and economic challenges in the sector.
On the challenges of the mortgage sector, Akinlusi said they include but not limited to lack of long term funds and effective foreclosure laws. He called on the government to initiate robust policies to drive the sector, noting that in a recessed economy with job losses and contracting economy subscribers may not be faithful with their monthly mortgage payments.
The TrustBond Managing Director called for effective foreclosures that will enable the effective prosecution of defaulters. He asked State Government’s to encourage the process by encouraging their own foreclosure laws to bring sanity to the sector, he said this will encourage more people in the sector and create more houses for the public.
Earlier, the chairman of the company, Mr. Etigwe Uwa said 2015 was very challenging from the crude oil price of $112 per barrel in June 2014 to $35 per barrel in 2015, far below the nation’s budget benchmark.
He explained that the “CBN through the Monetary Policy Committee (MPC) reduced the Monetary Policy Rate (MPR) from 13 per cent to 11 per cent the lowest since 2009 as well as Cash Reserve Ratio (CRR) from 25 per cent to 20 per cent to stimulate the economy which unfortunately didn’t add-up as the effects are still around us today.”
He commended the NMRC “for the issuance of N140 billion medium-term note programme that improved the tenor of mortgages to a maximum of 20 years as against 10 years and sometimes less loan tenor that was prevalent in the sub-sector.”
He said the programme has enhanced mortgage affordability, as according to him, longer loan tenor foster lower monthly repayment. He said this singular window afforded the company the opportunity to strategically double its capacity to refinance mortgages with NMRC.
NMRC is a fledging secondary mortgage company in Nigeria, an initiative of the Mortgage Banking Association of Nigeria (MBAN), Federal Ministry of Finance, CBN and World Bank to drive home ownership.
On the future of the bank, Uwa pointed that access to long-term funding is germane for a successful mortgage operations.
He said: “To this end, we are sowing the strategic seeds for the growth of our core operations which is banking and mortgages activities by securing access to long-term funding from NMRC through our bold decision to double our equity stake in NMRC as an equity investment.”
He pledged the company’s preparedness to continuously complement the required funding from NMRC with National Housing Fund from Federal Mortgage Bank of Nigeria (FMBN) and other sources.
The TrustBond chairman further stated that the banks has developed a liquidity management framework based on statistical model underpinned by conservative assumptions with regard to cash inflows and the liquidity of liabilities.
He said: “The Mortgage Bank’s liquidity has consistently been above the minimum liquidity ratio and the requirements of its stress tests. Our shareholders are in good hands as a result of high corporate governance.