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Sterling Bank Takes Giant Strides in Housing Sector

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  • Sterling Bank Takes Giant Strides in Housing Sector

Majority of Nigerians live in blighted and unplanned areas that are unfit, and some are unfit for human habitation, and most of these communities are in cities. Some housing experts argue that the deficit in the 2012 report of the World Bank was as a result of these unplanned communities like Lekki, which, though have beautiful homes, but was not documented as livable because of the unplanned environment.

Recently, stakeholders met in Abuja at a housing show where awards were presented to firms and individuals that contribute to the development of the nation’s housing sector. Sterling Bank Plc., was one of the institutions that stood out with an award, distinguishing it as the Housing Friendly Commercial Bank of the Year.

Minister of Power, Works and Housing, Mr. Babatunde Fashola, who was at the event with other senior government officials, remarked that Nigeria has been contending with a huge deficit in the housing sector over the years. He decried the current situation which effectively enables only one per cent of the Nigerian population access mortgage facilities, saying it is extremely low relative to a country like the United Kingdom with 77 per cent.

Fashola expressed concern that the deficit was apparent both on the supply and demand sides, stating that it was not just that the housing situation was grossly inadequate to satisfy the needs of the population, access to a mortgage was also inadequate.

The minister noted that financial institutions have allocated barely one percent of their loan portfolios to housing and about 11 percent to construction in the last 30 years.

However, stakeholders saw the award as due recognition to Sterling Bank Plc., a financial institution that has played a significant role in the housing sector by adopting an innovative model that takes adequate care of the demand and supply sides.

All things considered, Sterling Bank won the award as a result of its remarkable impact on housing delivery in the country. Specifically, the Commercial and Institutional Banking Group within Sterling Bank has established a firm footing in the housing sector by wholly and partly financing some landmark real estates in the country.

Some of the housing estates include; the part-financing of Crown Court Mabushi in Abuja for Crown Realities Plc. The project comprises 72 units of 3-bedroom flats, 18 units of 4-bedroom semi–detached houses and 16 units of detached 4-bedroom houses.

Prior to this, Sterling Bank had part-financed the prestigious Crown Estate in Lekki, located on a 41.7 hectares gated private estate along the Lagos-Epe Expressway in 2000.

Other residential projects part–financed by Sterling Bank in collaboration with developers include, Diamond Estate, Amuwo Odofin, Lagos; 360 low-cost housing units for Diya Fatimilehin & Co., Friends’ Colony Estate, Lekki Lagos; a 210 semi–detached and detached housing units for Aircom Nigeria Limited, Common Wealth Court, Lekki; 36 apartments of Defacto Properties Limited and Bourdillon Court Estate, Lekki, Lagos comprising 192 housing units (flats and Terrace houses) for Aircom Nigeria Limited.

Others are Cromwell Court’s 180 units of apartments; Milverton Estate’s 240 units of apartments, Northern Foreshore Estate’s 566 mixed housing units; Napier Garden’s 220 mixed housing units, all for Aircom Nigeria Limited in Lekki, Lagos and Tarino Towers’ 29 units of apartments for FMT Parkview Limited located in Ikoyi, Lagos.

Sterling Bank also part-financed Visage Apartment’s Victoria Island Lagos, 40 units of apartments for Sat Leasing Limited on Victoria Island, Lagos; Primewaterview Gardens’, phases I & II 539 units of apartments for Primewaterview Ltd in Lekki Lagos; Eko Court, Parkview Estate’s,12 units of apartments for Samtl Properties Ltd in Ikoyi, Lagos; Happy Haven’s Banana Island’s 16 units of apartments for Samtl Properties Ltd in Ikoyi, Lagos; Doby Haven’s 20 units of apartments for Eco Building Ltd in Lekki, Lagos and Pearly Gate Estate’s 40 mixed housing units for Edward Properties Konsult.

The bank has also wholly financed another residential estate for Crown Court in Durumi, Abuja which was inaugurated recently by the Minister of the FCT, Mr. Mohammed Bello.

Managing Director and Chief Executive, Crown Realities Plc, Mr. Darl Uzu, commended Sterling Bank for stepping in to provide critical financing for development projects in the country, particularly in a period of recession. Uzu said the financial institution has proven to be a dependable partner in times of need for Crown Realities Plc.

“At the height of the recession when funds are scarce and investors’ confidence was at its lowest, Sterling Bank stood by us and extended credit to finance our operations,” he said, adding that Crown Realities will not disappoint the bank and will do everything possible to further strengthen the confidence reposed in the company. “We’ll always do our part every time.”

Executive Director, Commercial and Institutional Banking of Sterling Bank, Mr. Lanre Adesanya described the bank’s partnership with Crown Realities as a huge success. He said the real estate development company was tested and found to be well-managed, prudent and cost efficient.

Adesanya noted that Sterling Bank has also made significant commitments in the real estate segment especially in Lagos. According to him, the bank has done quite well in retail real estate financing and is ready to provide credit to real estate developers who emulate Crown Realities’ prudent project selection and management model.

“We are happy to be part of the success of Crown Court Durumi, another landmark project which further strengthens our partnership with Crown Realities Plc. It means that Sterling Bank will always do more with a trusted party who never disappoints, and that’s what Crown Realities has proven to be – a trusted party,” Adesanya said.

He said the partnership is a success story for Sterling Bank, adding that the bank is willing to do more for whosoever is willing to do what Crown Realities has done.

Group Head, Non-Interest Banking Group of Sterling Bank, Mr. Basheer Oshodi noted that apart from Housing Friendly Award, Sterling Bank also won a similar award tagged “The European-Islamic Bank of the year Africa in 2016” in London which was organised by a UK based magazine, The European. He said the awards were won in recognition of the giant strides also being taken by the Non-Interest Banking Group in Nigeria’s housing sector.

Oshodi said the model of engagement created by the NIB group enhanced the ability of many Nigerians to own houses under a flexible mode of payment, adding that the NIB group has done so much in making affordable housing available to Nigerians.

According to him, customers who express interest in the home ownership model are made to contribute between 20 and 30 per cent equity over the construction period of 18 months after which the facility is booked for future ownership. He added that rentals in the scheme are less than what would have been paid in a conventional banking arrangement.

“We have developed an innovative method of home ownership for Sterling Bank customers. The model gives an opportunity to the buyer to own a house without the stress of bulk payment. Where the house is already built, a prospective home owner simply makes equity contribution and is booked for future ownership. Even if there is no house on the ground and the customer signifies an intention to access a mortgage, the next step will be to start contributing equity,” Oshodi said.

There is no doubt that Sterling Bank is making significant contribution to the growth and development of Nigeria’s beleaguered housing sector. Although it may represent a drop in the ocean, but the giant strides of Sterling Bank in the housing sector would certainly play a role in ameliorating the situation. It is hoped that other corporate bodies would emulate Sterling Bank’s laudable effort and help to reduce the housing deficit so that every Nigerian will have access to decent homes.

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.

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Crude Oil

Oil Prices Steady Ahead of Crucial OPEC+ Meeting on Output Cuts

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Oil prices stabilized in Asian trading on Monday as markets turned their attention to an upcoming OPEC+ meeting, where producers are expected to discuss maintaining voluntary output cuts for the remainder of the year.

This critical meeting, scheduled for June 2, will be held online following a brief postponement, OPEC announced last Friday.

The Brent crude oil, against which Nigerian crude oil is priced, stood at $82.36 a barrel, while the U.S. West Texas Intermediate (WTI) crude oil rose by 28 cents to $78 per barrel.

The stabilization in prices comes after a week of declines with Brent ending last week about 2% lower and WTI losing nearly 3%.

This downturn was influenced by minutes from the Federal Reserve’s recent meeting, revealing that some officials are open to further tightening interest rates if deemed necessary to control persistent inflation.

Market activity is expected to be relatively subdued on Monday due to public holidays in the United States and the United Kingdom.

However, anticipation is building around the OPEC+ meeting, where producers will deliberate on extending the current voluntary output cuts of 2.2 million barrels per day into the second half of the year. Sources within OPEC+ suggest that an extension is likely.

Sugandha Sachdeva, founder of Delhi-based research firm SS WealthStreet, expressed confidence in the potential extension, stating, “Oil futures are expected to maintain today’s gains due to expectations of the cuts being extended.”

She also highlighted the influence of upcoming U.S. Producer Price Index (PPI) data on market movements, which will shape the Federal Reserve’s approach to potential rate adjustments.

Combined with an additional 3.66 million barrels per day of production cuts valid through the end of the year, these measures account for nearly 6% of global oil demand.

OPEC remains optimistic about continued growth in oil demand, forecasting an increase of 2.25 million barrels per day for the year, while the International Energy Agency (IEA) anticipates slower growth of 1.2 million barrels per day.

Analysts at ANZ noted that they will be closely monitoring gasoline usage as the Northern Hemisphere enters summer, a peak season for driving holidays.

They commented, “While U.S. holiday trips are expected to hit a post-COVID high, improved fuel efficiency and EVs could see oil demand remain soft,” but added that this could be offset by rising air travel.

This week’s market dynamics will also be influenced by the U.S. personal consumption expenditures (PCE) index, due to be released on May 31.

The PCE index is regarded as the Federal Reserve’s preferred measure of inflation, and its findings could provide further indications of the central bank’s interest rate policies.

In a related development, Goldman Sachs has revised its forecast for 2030 oil demand upwards to 108.5 million barrels per day from the previous 106 million barrels per day.

The investment bank also projects peak oil demand to occur by 2034 at 110 million barrels per day, followed by a prolonged plateau until 2040.

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Nigeria’s Oil Sector Sees $16.6bn Investment Boost, Plans $20bn Expansion

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Steel sector

Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, announced on Monday that approximately $16.6 billion in investments have been committed over the past year.

This significant influx of capital marks a period of rejuvenation for the oil sector following years of stagnation caused by policy inconsistencies and the delayed passage of the Petroleum Industry Act.

Lokpobiri shared these updates during a briefing in Abuja, where he highlighted the achievements in the oil sector since President Bola Tinubu assumed office on May 29, 2023.

The minister emphasized that the government’s efforts to create a more investment-friendly environment have paid off, attracting substantial foreign and domestic investments.

Rekindling Investor Confidence

“One of our main objectives has been to create an environment where investments can thrive,” Lokpobiri stated. “Today, I am pleased to announce that our efforts have rekindled investor confidence in the sector.”

He pointed to notable investments, including $5 billion and $10 billion commitments in deepwater offshore assets, and a $1.6 billion investment in oil and gas asset acquisition.

The surge in investments is attributed to a series of roadshows in the United States and Europe, which successfully showcased Nigeria’s potential and the government’s commitment to sectoral reforms.

This renewed global interest is also evident in the ongoing bid rounds for new assets.

Production Increase and Strategic Initiatives

A significant achievement since President Tinubu took office is the increase in crude oil production.

“When we took office, production was at approximately 1.1 million barrels per day, including condensates,” Lokpobiri reported. “Today, I am proud to report that we have increased our production to approximately 1.7 million barrels per day, inclusive of condensates.”

To achieve this increase, the government has undertaken several strategic initiatives.

These include revamping redundant oil assets, continuous engagement with international oil companies, and resolving industry disputes.

Efforts to protect critical assets and reduce oil theft have also been intensified, with collaborations between private security firms and government agencies leading to a sharp decline in crude oil theft.

Upcoming $20bn Expansion Deal

In addition to the recent investments, Lokpobiri revealed that the Federal Government is on the verge of finalizing a $20 billion deal aimed at further boosting oil and gas production.

During a meeting with Olivier Le Peuch, CEO of Schlumberger Limited, Lokpobiri disclosed that negotiations with major investors are nearing completion. “Investments of over $20 billion are coming. One company alone will invest $10 billion,” he noted.

This deal, once consummated, will represent one of the largest single investments in Nigeria’s oil sector in recent history, promising to significantly enhance the country’s production capacity and economic growth.

Ongoing and Future Projects

Lokpobiri also highlighted the commencement of production from Oil Mining Leases (OMLs) 13 and 85, managed by Sterling Exploration and First E&P respectively.

These projects are expected to produce an average of 20,000 and 40,000 barrels per day, further bolstering Nigeria’s output.

This period of renewed investment and increased production is a testament to the government’s commitment to optimizing the nation’s oil and gas assets.

President Tinubu’s administration aims to sustain this momentum, ensuring continued growth and stability in the sector.

Government Transparency and Accountability

In line with President Tinubu’s directive for transparency, all ministers have been tasked with presenting their performance reports to the public.

The Minister of Information and National Orientation, Mohammed Idris, announced that the first-anniversary celebrations will include sectoral media briefings by the 47 federal ministers, starting on Thursday.

These briefings are designed to keep Nigerians informed about the government’s achievements and ongoing initiatives.

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Energy

Oil Prices Stable Amid Federal Reserve’s Talk of Interest Rate Tightening

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In a landscape where global oil markets often sway with the slightest economic shifts, stability can be a rare commodity.

However, amidst discussions from the U.S. Federal Reserve regarding potential interest rate adjustments, oil prices have remained surprisingly steady.

Brent crude oil, against which Nigerian oil is priced, gained 10 cents, or 0.1% rise to $82.00 a barrel, while U.S. West Texas Intermediate (WTI) crude oil edged up 7 cents to $77.64 a barrel.

The Federal Reserve’s release of minutes from its recent policy meeting unveiled deliberations on the possibility of raising interest rates to combat persistent inflationary pressures.

The minutes stated, “Various participants mentioned a willingness to tighten policy further should risks to inflation materialize in a way that such an action became appropriate.”

Such discussions surrounding interest rates can have a profound impact on oil demand. Higher interest rates typically result in increased borrowing costs, potentially constraining funds that could otherwise stimulate economic growth and, consequently, oil consumption—particularly in the United States, the world’s largest oil-consuming nation.

Additionally, the Energy Information Administration’s report indicating a 1.8 million barrel rise in U.S. crude stocks last week, as opposed to an anticipated draw of 2.5 million barrels, added a layer of complexity to the market dynamics.

This unexpected increase in inventory weighed on market sentiment, despite ongoing efforts to balance supply and demand.

Furthermore, global physical crude markets have been grappling with subdued refinery demand and abundant supply, exacerbating the pressure on oil prices.

Analysts from Citi highlighted recent market softness, attributing it to weaker data encompassing rising oil inventories, tepid demand, and refinery margin weakness, compounded by the looming risk of production cuts.

Russia’s announcement that it surpassed its OPEC+ production quota in April due to “technical reasons” added another dimension to the market narrative.

The Russian Energy Ministry revealed plans to present a compensation strategy to the Organization of the Petroleum Exporting Countries (OPEC) Secretariat shortly.

Against this backdrop, anticipation mounts ahead of the OPEC+ meeting scheduled for June 1, where crucial decisions regarding production cut levels will be deliberated.

Despite uncertainties surrounding the meeting’s outcome, industry experts foresee challenges in significantly tightening the market in the near term, potentially leading to a rollover of existing voluntary cuts.

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