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Mortgage Market Active in May –Report

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  • 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.

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.

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Union Bank Secures US$40 Million Facility from IFC Global Trade Finance

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Union Bank Secures US$40 Million Facility from IFC Global Trade Finance

Union Bank of Nigeria Plc said it has secured a US$40,000,000 finance guarantee facility from the IFC, a member of the World Bank Group.

In a note to the Nigerian Stock Exchange, the lender said the facility would help boost access to finance for local businesses and enable increased international trade for Nigeria.

It explained that the facility “will support Union Bank to establish working partnerships with nearly 300 major international banks within the GTFP network, thereby broadening access to finance and reducing cash collateral requirements for Nigerian businesses.

“The facility will enable the continued flow of trade credit into the Nigerian market at a time when imports are critical, and the country’s exports can generate much-needed foreign exchange.

Under the IFC’s Global Trade Finance Program (GTFP) terms of the agreement, GTFP offers benefiting banks partial or full guarantees covering payment risk on Union Bank’s trade-related transactions.

Accordingly, these guarantees are transaction-specific and may vary depending on underlying instruments like letters of credit, trade-related promissory notes, guarantees, bonds, and advance payment guarantees.”

Emeka Emuwa, Chief Executive Officer of Union Bank, said, “Union Bank is pleased to join the IFC’s Global Trade Finance Program. This is a significant achievement as we continue to expand our trade financing offerings to our
customers. Even in these peculiar times, we remain focused on contributing to economic growth by developing tailored solutions that help our customers harness the teeming opportunities that still exist in the Nigerian market.

Eme Essien Lore, IFC’s Country Manager for Nigeria, said, “Keeping trade moving is essential to growth and job creation, especially during the challenging economic times we are living through today. We welcome Union Bank to IFC’s Global Trade Finance Program and value a partnership that will make a positive impact on Nigeria’s economy.

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Apapa Customs Command Generate N367.6bn in Nine Months

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Nigeria Customs Service

Customs Command Apapa Realises N367.6bn Between January and September

The Nigeria Customs Service, Apapa Command, said it generated N367.6 billion in the nine-month ended September 2020.

Mohammed Abba-Kura, the Customs Area Controller, disclosed this while speaking with newsmen in Lagos.

He said a total of 328 containers of goods worth N19.5 billion were seized during the period. This, he said represents an increase of 37 containers when compared to the same period of 2019.

Speaking further, Abba-Kura said the N367.6 billion realised in the first nine months of the year, represented a 17 percent or N54.1 billion increase from N313.5 billion it collected during the same period of 2019.

The Apapa Command generated N14.3 billion as revenue in the third quarter from customers’ duty and other charges.

He said “The difference recorded was made possible as a result of resilience of officers in ensuring that importers and agents are made to do proper declarations, adhere strictly to import/export guidelines in tandem with extant laws.”

Commenting on the seizures, Abba-Kura said, “These items were seized mainly because of various forms of infractions which range from false declarations, non-adherence to import/export guidelines and failure to comply with other extant regulations as enshrined in the Customs and Excise Management Act.

“In the area of export trade, the period under review recorded exportation of goods worth N26,273,706,822 exported from the country.”

“These exported goods include mineral resources, steel bars, agricultural products among others with a total tonnage of 378,447 million tonnes free on board value of $85.8m. Similarly, the volume of export from January to September 2020 stood at N78.6bn with FOB $257,003,965.”

He added that the compliance level rose to about 60 percent during the period, highlighting the reason for the surge in the number of seizures made.

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Nigeria’s Foreign Reserves Dip Further to $35.69 Billion

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Global debt

Nigeria’s External Reserves Decline by $50.84 Million to $35.69 Billion

Nigeria’s foreign reserves declined by $50.84 million in eleven days to $35.69 billion, according to the latest data from the Central Bank of Nigeria (CBN).

In the data released on the apex bank website, the nation’s foreign reserves stood at $35.75 billion as of October 2, 2020 but depreciated to $35.69 billion on October 13, 2020.

The foreign reserves plunged from $44.25 billion posted on August 19, 2019 to $41.85 billion as of September 30, 2019 before sustaining the downward trend to $36.30 billion on June 19, 2020 despite the Central Bank of Nigeria devaluing the Naira twice to prevent huge capital flight that trailed COVID-19 outbreak.

Weak oil prices amid low demand for the commodity compounded Nigeria’s woes as the central bank continues to struggle to sustain foreign exchange intervention and ease dollar scarcity in a nation that depends on imports for most of its consumption.

However, the plunge in revenue generation alongside low foreign direct investment due to the weak economic outlook and low investment sentiment, negatively impacted the attractiveness of Nigerian assets.

The apex bank, in its monthly report released for May, said “Nigeria’s international reserves decreased marginally from $36.43bn at end-April to $36.19bn at end-May 2020.

“The net decrease in reserves was due to the sales of foreign exchange at the Secondary Market Intervention Sales and Investor and Exporter windows as well as payments to external creditors.

“Thus, the level of import cover for goods and services, decreased from 4.0 months in April to 3.9 months in May 2020, but remained above the IMF threshold of 3.0 months.

“A comparative analysis of reserves per capita in May 2020 showed that Nigeria’s reserves per capita was $176.58, compared to $889.73 for South Africa, $491.10 for Angola, $218.94 for Egypt and $24.10 for Ghana.

It explained that “Sequel to the COVID-19 pandemic, the viability of the external sector in 2020 is expected to deteriorate, given the present worsening current account balance and depletion of external reserves driven, largely, by decelerating export receipts, particularly oil.

“Specifically, the degree of external reserves accumulation is expected to decelerate, as outflows are expected to outweigh inflows.

“As a result, external reserves are expected to lie between $29.9bn and $34.3bn at end-December 2020 (predicated on current declining oil price between $20 and $40).”

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