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Mortgage Market Active in May –Report

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Mortgage - Investors King
  • Mortgage Market Active in May –Report

A strong performance in April was followed by an equally active May for the UK mortgage market, which showed no signs of being affected by the slowdown facing the property sector.

There were 65,801 residential mortgages approved during May 2019, up 1.2 per cent compared to the same month in 2018, according to the data from the latest Mortgage Monitor from chartered surveyors e.surv.

This growth comes at a time when activity in the property market has tailed off in many areas, with many local markets showing little signs of growth and it is existing home owners who have driven the mortgage market forward so far in 2019.

According to Propertywire.com, the report found that this is because mortgage lenders have continued to offer competitive deals, despite many having to contend with higher funding costs. May’s lending total did drop back slightly from last month’s figure, falling by 0.7 per cent month on month.

The proportion of loans given to first time buyers and others with small deposits also declined when compared to April’ with a fall of 0.7 per cent. However, this figure is still well ahead of the 26 per cent recorded in March and demonstrates the strong performance of the first time buyer market, even when others are holding off on making purchases.

“While few people are moving when they don’t have to, first time buyers are still desperate to get onto the ladder. Existing home owners, they are being tempted into the market by near record low interest rates. Those looking to switch could save hundreds of pounds a month by moving to a cheaper deal from a rival lender,” said Richard Sexton, director at e.surv.

The proportion of mortgage approvals to borrowers with a small deposit dropped back slightly in May. Large deposit borrowers felt the benefit somewhat, but it was the mid-market which saw the greatest increase in activity. Over the course of the month, 27.7 per cent of all loans went to smaller deposit borrowers, down compared to last month.

Meanwhile the number of loans to their larger deposit counterparts grew modestly from 24.3 per cent to 24.5 per cent. This meant it was mid-market borrowers who increased their share of the market most substantially, growing from 47.2 per cent to 47.8 per cent month on month. This returns activity to the exact level recorded in March.

On an absolute basis, the number of small deposit borrowers dropped from 18,748 to 18,227.

“The strength of the remortgage market means that many mid-market borrowers, who often benefit most from switching, are flocking to lenders in search of a cheaper deal, supported by advice from mortgage professionals,” Sexton pointed out.

Yorkshire had the most favourable market conditions for small deposit borrowers in May and has held its place at the top of the chart throughout 2019 so far. In Yorkshire 34.9 per cent of all loans went to this part of the market, higher than all rival regions. In the North West, the nearest challenger, this figure was 33.7 per cent The only other region to record over 30 per cent was the Midlands, which registered a total of 31.3 per cent this month.

At the other end of the scale, London was once again the most difficult market for these borrowers, with just 17.5 per cent of loans in the capital made to these customers. London was once again dominated by those with large amounts of equity, with 32.8 per cent of all loans going to them. This is ahead of South East, which recorded 27.9 per cent, and Eastern England, which was 25.9 per cent. By contrast, the proportion of large deposit borrowers in Yorkshire was 19.1 per cent and in the North West 19.3 per cent.

“Few people are likely to move to the other end of the country purely in search of a cheap house, but those in, or close to Yorkshire stand a much better chance of getting onto the property ladder with a small deposit,”Sexton said.

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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Finance

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

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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.

 

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Banking Sector

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

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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.

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President Tinubu Launches National Single Window Project

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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.

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