Connect with us

Markets

CBN Sets N6bn Minimum Capital Requirement for Mortgage Guarantee Companies

Published

on

banks
  • CBN Sets N6bn Minimum Capital Requirement for Mortgage Guarantee Companies

The Central Bank of Nigeria (CBN) has set the minimum capital requirement of N6 billion for the operation of Mortgage Guarantee Companies (MGC) in the country.

In an exposure draft posted on its website, it pointed out that the licencing of MGC would deepen the mortgage banking sub-sector, through increased market access to mortgage finance and sharing of credit risk with mortgage lending institutions by issuing guarantees to reduce or replace equity contribution that would otherwise disqualify mortgagors from accessing mortgage as required by the uniform underwriting standards.

According to the central bank, the proposed regulation was aimed at ensuring that MGCs when licenced operate in a safe and sound manner on internationally acceptable principle, standards and good practice in mortgage guarantee.

The regulation, among other things, stipulates the basic requirements for the MGC’s principal line of business of guaranteeing mortgages for lenders based on the security of residential mortgage assets and sets the capital requirements including minimum paid-up capital as well as permissible investments and liquidity requirements.

Essentially, the regulation bars the MGCs from acceptance of demand, savings and time deposits or any other type of deposits as well as from financing real estate construction or management of pension funds/schemes.

It is also prevented from granting consumer, commercial or mortgage loans among other restrictions.

On the other hand, the MGC is expected to engage in full or partial guaranteeing of residential mortgage loans; invest in government securities and other approved investments and assume ownership of residential property in the event a lender is unable to dispose of a fore-closed property-provided that such holding shall not exceed 20 percent of its shareholders’ fund unimpaired by losses without the Bank’s prior written approval.

The MGC is further allowed to issue bonds and notes to fund its operations among other activities.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Crude Oil

Crude Oil Hits $71.34 After Saudi Largest Oil Facilities Were Attacked

Published

on

oil

Brent Crude Oil Rises to $71.34 Following Missile Attack on Saudi Largest Oil Facilities

Brent crude, against which Nigerian oil is priced, jumped to $71.34 a barrel on Monday during the Asian trading session following a report that Saudi Arabia’s largest oil facilities were attacked by missiles and drones fired on Sunday by Houthi military in Yemen.

On Monday, the Saudi energy ministry said one of the world’s largest offshore oil loading facilities at Ras Tanura was attacked and a ballistic missile targeted Saudi Aramco facilities.

One of the petroleum tank areas at the Ras Tanura Port in the Eastern Region, one of the largest oil ports in the world, was attacked this morning by a drone, coming from the sea,” the ministry said in a statement released by the official Saudi Press Agency.

It also stated that shrapnel from a ballistic missile dropped near Aramco’s residential compound in Eastern Dhahran.

Such acts of sabotage do not only target the Kingdom of Saudi Arabia, but also the security and stability of energy supplies to the world, and therefore, the global economy,” a ministry spokesman said in a statement on state media.

Oil price surged because the market interpreted the occurrence as supply sabotage given Saudi is the largest OPEC producer. A decline in supply is positive for the oil industry.

However, Brent crude oil pulled back to $69.49 per barrel at 12:34 pm Nigerian time because of the $1.9 trillion stimulus packed passed in the U.S.

Market experts are projecting that the stimulus will boost the United States economy and support U.S crude oil producers in the near-term, this they expect to boost crude oil production from share and disrupt OPEC strategy.

Continue Reading

Crude Oil

A Loud Blast Heard in Dhahran, Saudi Arabia’s Largest Crude Oil Production Site

Published

on

Loud Blast Heard in Dhahran, Saudi Arabia’s Largest Crude Oil Production Site

Two residents from the eastern city of Dhahran, Saudi Arabia, on Sunday said they heard a loud blast, but they are yet to know the cause, according to a Reuters report.

Saudi’s Eastern province is home to the kingdom’s largest crude oil production and export facilities of Saudi Aramco.

A blast in any of the facilities in that region could hurt global oil supplies and bolster oil prices above $70 per barrel in the first half of the year.

One of the residents said the explosion took place around 8:30 pm Saudi time while the other resident claimed the time was around 8:00 pm.

However, Saudi authorities are yet to confirm or respond to the story.

 

Continue Reading

Crude Oil

Brent Crude Oil Approaches $70 Per Barrel on Friday

Published

on

Crude oil

Nigerian Oil Approaches $70 Per Barrel Following OPEC+ Production Cuts Extension

Brent crude oil, against which Nigerian oil is priced, rose to $69 on Friday at 3:55 pm Nigerian time.

Oil price jumped after OPEC and allies, known as OPEC plus, agreed to role-over crude oil production cuts to further reduce global oil supplies and artificially sustain oil price in a move experts said could stoke inflationary pressure.

Brent crude oil rose from $63.86 per barrel on Wednesday to $69 per barrel on Friday as energy investors became more optimistic about the oil outlook.

While certain experts are worried that U.S crude oil production will eventually hurt OPEC strategy once the economy fully opens, few experts are saying production in the world’s largest economy won’t hit pre-pandemic highs.

According to Vicki Hollub, the CEO of Occidental, U.S oil production may not return to pre-pandemic levels given a shift in corporates’ value.

“I do believe that most companies have committed to value growth, rather than production growth,” she said during a CNBC Evolve conversation with Brian Sullivan. “And so I do believe that that’s going to be part of the reason that oil production in the United States does not get back to 13 million barrels a day.”

Hollub believes corporate organisations will focus on optimizing present operations and facilities, rather than seeking growth at all costs. She, however, noted that oil prices rebounded faster than expected, largely due to China, India and United States’ growing consumption.

The recovery looks more V-shaped than we had originally thought it would be,” she said. Occidental previous projection had oil production recovering to pre-pandemic levels by the middle of 2022. The CEO Now believes demand will return by the end of this year or the first few months of 2022.

I do believe we’re headed for a much healthier supply and demand environment” she said.

Continue Reading

Trending