Operators recognize regulators’ role in mortgage banks N5bn recapitalization

Mortgage banks operators under the aegis of Mortgage Banking Association of Nigeria (MBAN) have recognised the banking subsector’s regulators for their contributions to growing N100 million primary mortgage banks (PMBs) to N5 billion through recapitalisation.

It was a historic event when primary mortgage banks (PMBs) in Nigeria, in a recapitalization process that came with consolidation of the banking subsector, from a N100 million capital base to N5 billion and, in some cases, N2.5 billion. That process saw the subsector come down from over 100 to about 42 PMBs.

Among the honoured regulators and operators were past directors of the Central Banks of Nigeria (CBN), the Nigeria Deposit Insurance Corporation (NDIC), Nigeria Mortgage Refinance Company (NMRC), and past managing directors of mortgage banks.

Speaking at a send forth/ get together event organised by MBAN, Adeoye Mapaderum, chairman, Board of Trustees of MBAN, said that mortgage banks in Nigeria were brought back on track through recapilisation under the supervision of the CBN.

According to him, recapitalisation of the mortgage banks changed the industry for good and enabled the banks to give returns on investment to shareholders.

“We are honouring gentlemen and women, who have impacted positively on the growth and development of mortgage banks. Operators and regulators are not meant to be enemies rather they are meant to collaborate to move the industry forward, which had happened in the mortgage industry,” Mapaderum said.

He said that the CBN and the NDIC have been wonderful and supportive to the mortgage banks.

“The regulation oversights of both institutions have enabled professionalism in the industry, and we hope the relationship will become better in future. The CBN inspected the industry based on issues, which enabled the industry to continue to get better,” Mapaderum added.

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Giving the acceptance speech on behalf of the awardees, Femi Fabamwo, said that it was very rare to see operators recognise people for making some contributions to the growth of the industry.

While appreciating the thoughtfulness of the mortgage bank operators in recognising their contributions, he said, the beginning was a very huge task, but they were able to make some inputs.

From the onset, he said, the regulators were out to reform the mortgage industry because it was obvious that it would be very difficult for mortgage banks with N100 million capital bases to survive.

“It was clear then that the industry was heading for the rocks. That was why we started by ensuring that operators separated finance from real estate. We insisted that if the mortgage banks were to continue doing real estate, they must get a subsidiary.

To achieve that, we went for the national license. It was like an impossible task at the beginning. Then, we saw the need to find a refinancing outfit so that when they create mortgages, they will be able to refinance them. This enabled the banks to be able to pull back and continue to be in business,” Fabamwo explained.

Delivering a vote of thanks, Femi Johnson, a past president, who noted that many of the people being celebrated by the association led the mortgage banking industry through recapitalisation, said the Directors being celebrated accepted, welcomed and listened to the issues affecting the mortgage bank operators during their time.

According to him, they gave the operators their commitments, and also made it possible for the Federal Government through the CBN to invest in the industry even if it was just 2 percent.

“As a regulator, the CBN was not supposed to invest in a company of interest but they did just to make sure that this sub-sector survived. It has been a long 18 years, and today, we see giants and people who have been super supportive both on the regulatory and operator sides,” Johnson said.

Johnson however said that MBAN brought the former directors and bank CEOs to thank them for letting the industry survive.

“Many people on the regulatory side did not need to support the operators because they do not have an investment in the mortgage sub-sector but they did the right thing, and today, their names are written in gold,” Johnson noted.