• Monday, May 20, 2024
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NMRC beats economic headwinds, grows gross earning 15% to N7.086bn

Poor home seekers sidelined as governments falter on social housing

Despite challenging operating environment, the Nigerian Mortgage Refinance Company (NMRC) has recorded a good financial performance, growing its balance sheet by 63 percent and full year gross earnings rising 15 percent to N7.086 billion in 2018, up from N6.160 billion in 2017.

NMRC is Nigeria’s secondary mortgage institution, a private sector-led mortgage institution set up with the primary purpose of raising funds from the capital market and using same to refinance loans presented by primary mortgage banks (PMBs) in order to increase liquidity in the mortgage system.

At the third Annual General Meeting of the company on Wednesday in Lagos, Charles Adeyemi Candide-Johnson, the chairman of the company, also announced to its directors and shareholders that the company’s refinanced loan portfolio grew by over 100 percent thereby positioning the company for sustained growth and profitability.

Though the company recorded a loss in its profit before tax which decreased marginally by 0.5 percent from N1.945billlion in 2017 to N1.935 billion in 2018, the chairman blamed it on the adoption of the International Financial Reporting Standard Number 9 (IFRS9) by the company.

Read Also: https://businessday.ng/real-estate/article/driving-new-initiatives-for-increased-liquidity-in-mortgage-market/

Its earnings per share also declined to N0.93 in 2018, down from N1.04 in 2017. But its total assets increased by 63 percent to N69.29 billion as at December 31, 2018, up from N42.54 billion as at December 31, 2017.

As a mortgage refinance company, NMRC performed its function creditably in the year under review. Its mortgage refinance loans increased by 106 percent to N17.02 billion in 2018, up from N8.23 billion in 2017.

The downsides in the performance of the company in the review year could be easily traced to the reversals in growth expectations in both local and global economy. “2018 started with the expectation of synchronized pickup in global growth, but ended with synchronized global downturn,” Kehinde Ogundimu, the company’s MD/CEO, noted in his statement at the meeting.

The CEO noted further that within that year, the Nigerian economy continued its slow recovery on the back of higher agricultural output, relatively higher oil price, stable domestic oil production  and Nigeria’s exemption from production cuts by the members of the Organisation of Petroleum Exporting Countries (OPEC).

He pointed out, however, that “population growth outpaced economic growth in 2018, resulting in increased unemployment and poverty level” both of which are anti-economic and mortgage growth.

In the past five years of its operation, NMRC has, to some extent, lived up its mandate and public expectations. Besides refinancing about 12 mortgage institutions to the tune of N18 billion as announced in December 2018, the company has also done a bit of mortgage market development.

Ogundimu announced at the meeting that in collaboration with the Central Bank of Nigeria (CBN), Mortgage Bankers Association of Nigeria (MBAN) and other stakeholders, they have developed the Uniform Underwriting Standards for Nigerians in Diaspora. With this, he explained, these Diaspora Nigerians now have access to mortgage to buy homes in Nigeria.

NMRC has also made interventions in the market which have supported and encouraged commercial banks such as Access Bank, StanBic IBTC, Sterling Bank, Sun Trust Bank, to ramp up their activities in the mortgage space.

These banks listed among NMRC’s member mortgage lending partners now have dedicated mortgage desks and innovative mortgage products that target potential homeowners. As NMRC partner-banks, they have their mortgage loan portfolios totaling several billions refinanced by the institution.

Primary mortgage banks are also enjoying a boost in their liquidity positions because of NMRC’s refinancing of their mortgage portfolios. Examples include TrustBond Mortgage Bank, Imperial Homes, Abbey Mortgage Bank Plc, Homebase Mortgage Bank, Infinity Trust Bank among others that are listed as partner mortgage lending institutions.