Connect with us

Finance

Non-performing Mortgage Loans Rise to N94bn

Published

on

Naira - Investors King
  • Non-performing Mortgage Loans Rise to N94bn

Mortgage lenders are buckling under the weight of unpaid loans as job losses and inflation near a record high hinder the ability of customers to pay off their debts, Bloomberg has reported.

At least 55 per cent of the mortgage industry’s N94bn loans are classified as non-performing, according to the Nigeria Deposit Insurance Corporation.

The President, Mortgage Banking Association of Nigeria, Adeniyi Akinlusi, was quoted as saying, “They are just struggling to survive; a lot of them aren’t making money.”

While the association said it was not aware of any mortgage lenders on the verge of collapsing, increased pressure on the nation’s 36 home-loan providers presents another challenge to the Federal Government as the country reels under recession.

Rising costs for everything from building materials to school fees have meant the industry has been stagnant since June, according to Akinlusi.

That compares with a ratio of 10 per cent for the N18.5tn of loans granted by commercial banks and 45 per cent for microfinance banks, which have N195bn of outstanding loans.

“The real estate market mirrors the larger economy,” the Chief Executive Officer of Lagos-based real estate broker, Fine and Country West Africa, Udo Okonjo, said.

“Over the last year-and-a-half, the recession affected key sectors such as oil and gas, financial and manufacturing. There were a lot of layoffs.”

The country’s official unemployment rate jumped to the highest level in at least seven years in the third quarter of last year.

While inflation in February slowed from a record a month earlier, at 17.8 per cent, it is still almost double the CBN’s target.

Total assets in the mortgage industry surged to more than N386bn at the end of June, compared with N102bn a year earlier.

Regulators require mortgage lenders to have at least half their total assets in home loans.

Biggest mortgage banks include Union Homes Savings and Loans Plc, FBN Mortgages Limited, and Abbey Mortgage Bank Plc, which in October reported that net income in the third quarter plunged 37 per cent as non-performing loans jumped.

There are efforts to return the industry to growth as the Federal Government pledges to boost housing through the creation of a fund of as much as N1tn, which will offer up to 20-year loans to developers at interest rates of 9.9 per cent.

The Federal Mortgage Bank is also giving mortgage providers loans of up to 20 years, which will relieve operators of the burden of having to seek long-term funding, according to Akinlusi.

According to him, the regulator is expected to draft rules this year that will enable mortgage companies to provide loans to workers in the informal sector, including farmers, who do not earn enough to make an initial down-payment for the debt.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

Continue Reading
Comments

Finance

Nigerian Ports Authority Secures $700m Loan from Citibank for Lagos Ports Rehabilitation

Published

on

Nigerian ports authority

The Nigerian Ports Authority (NPA) has successfully secured a $700 million loan from Citibank to facilitate the rehabilitation of the Lagos ports.

The finance was facilitated by the UK Export Finance to revitalize the Apapa and Tincan Island Ports, two pivotal gateways for maritime trade in Nigeria.

The announcement was made during a signing ceremony held in Lagos, marking a pivotal moment in Nigeria’s efforts to modernize its port infrastructure.

Mohammed Bello-Koko, the Managing Director of the NPA, expressed optimism regarding the prompt commencement of the reconstruction efforts following the finalization of the funding agreement.

The rehabilitation project is expected to address longstanding challenges faced by the Apapa and Tincan Island Ports, including congestion, inadequate infrastructure, and operational inefficiencies. By modernizing these key maritime hubs, Nigeria aims to bolster its trade capabilities, enhance port efficiency, and stimulate economic growth.

Speaking at the ceremony, Bello-Koko highlighted the strategic significance of the Citibank Facility, citing its favorable terms and affordable interest rates as key advantages for the NPA.

Bello-Koko outlined the NPA’s broader strategy to upgrade port facilities beyond Lagos, with discussions underway to secure additional funding for the enhancement of Eastern Ports such as Calabar, Warri, Onne, and Rivers Ports, as well as the reconstruction of Escravos Breakwater.

The collaboration between the NPA and Citibank underscores the importance of public-private partnerships in driving infrastructural development.

Ireti Samuel-Ogbu, Managing Director of Citibank Nigeria Limited, reaffirmed the bank’s commitment to supporting the NPA and the Federal Government in bridging the infrastructural gap.

Samuel-Ogbu commended the NPA’s strategic initiative and underscored Citibank’s dedication to facilitating the project’s success.

 

Continue Reading

Banking Sector

UBA Announces Final Dividend of N2.30 per Share for FY 2023, Totaling N95.8 Billion

Published

on

UBA House Marina

UBA (United Bank for Africa) shareholders are set to receive dividends as the bank announces a final dividend of N2.30 per share for the fiscal year 2023.

This translated to a total payout of N95.8 billion, more than the N37.6 billion paid out in 2022.

Despite the robust increase in dividend payments, UBA’s dividend payout to profit after tax (PAT) ratio experienced a decline of 6.3 percentage points, dropping from 22.1% in 2022 to 15.8% in 2023.

Shareholders will receive the dividends based on their shareholdings as of the close of business on Friday, May 10, 2024. The payment is scheduled for May 24, 2024.

UBA urges shareholders who have not completed the e-dividend registration process to obtain the E-Dividend Mandate Form to ensure a smooth disbursement process.

The bank’s unclaimed dividends increased to N14.9 billion in 2023, an 18% increase from the previous year.

The bank reported a profit after tax of N607.7 billion, representing a 257% increase from the N170.3 billion recorded in 2022. This increase in profitability includes a net FX revaluation gain of N26.6 billion.

However, it’s worth noting that the Central Bank of Nigeria (CBN) directive prohibits banks from utilizing FX revaluation gains for dividends payment or operational expenses.

Shareholders are advised to complete the e-dividend registration process or contact the registrar, Africa Prudential Plc, for assistance regarding outstanding dividend warrants or share certificates.

Continue Reading

Finance

President Tinubu Launches National Single Window Project

Published

on

Bola Tinubu

President Bola Tinubu inaugurated the National Single Window Project to streamline trade processes and combat bureaucratic bottlenecks.

The initiative promises to unlock significant economic benefits and bolster Nigeria’s position as a global trade leader.

Addressing stakeholders at the Council Chamber of the State House in Abuja, President Tinubu outlined the transformative potential of the Single Window Project.

He explained that Nigeria stands to gain approximately $2.7 billion annually by implementing the initiative, while also saving an estimated $4 billion lost to inefficiencies and corruption plaguing the trade sector.

The National Single Window Project, codenamed a digital trade compliance initiative, will serve as a cross-government website facilitating trade by providing a unified portal for Nigerian and international trade actors.

This centralized platform will offer access to a full range of resources and standardized services from various Nigerian agencies, promising to expedite cargo movement and optimize inter-African trade.

President Tinubu’s directive to dismantle obstacles hindering trade efficiency reflects a commitment to fostering a transparent, secure, and business-friendly environment.

He underscored the urgency of eliminating red tape, bureaucracy, delays, and corruption at Nigerian ports, asserting that the economy cannot afford to sustain such losses.

The President’s call to emulate success stories from countries like Singapore, Korea, Kenya, and Saudi Arabia highlights the transformative potential of the Single Window system.

By joining the ranks of nations that have significantly improved trade efficiency through similar initiatives, Nigeria aims to unlock new avenues for economic growth and prosperity.

Tinubu stated that the National Single Window Project transcends Nigeria’s borders, presenting opportunities for regional integration and inter-African trade optimization. By linking Nigeria’s system with those of other African nations, the initiative seeks to expedite cargo movement and enhance trade facilitation across the continent.

Managing Director of the Nigerian Ports Authority, Bello Koko, provided insights into the practical implications of the Single Window initiative.

He affirmed that imports would be cleared at all seaports within 24 hours, a significant improvement compared to neighboring countries where clearance often takes up to 72 hours.

Koko outlined how the initiative would streamline paperwork, enhance information sharing among government agencies, and foster greater efficiency in trade transactions.

With representatives from key government agencies and bodies forming the project secretariat, the National Single Window Project reflects a collaborative effort to drive comprehensive reform in Nigeria’s trade sector.

Continue Reading
Advertisement




Advertisement
Advertisement
Advertisement

Trending