FEBRUARY 9, 2015
Uncertainty, as 32 mortgage banks scale recapitalisation hurdle
•15 downscales to MFBs, Finance Houses By YINKA KOLAWOLE
T
he dust is yet to settle on the recapitalisation exercise in the mortgage sector even as the Central Bank of Nigeria (CBN) confirmed that 32 primary mortgage banks (PMBs) have met the required criteria and licensed to operate in the country, out of 89 that were in existence before the exercise. 15 PMBs were also said to have converted to either microfinance banks or finance companies. CBN’s Director, Corporate Communication Department, Mr. Ibrahim Mu’azu, confirmed to Vanguard that a total of 32 PMBs, made up of 10 National and 22 State PMBs, are currently licensed by CBN, adding that the number is likely to rise. “Currently, there are 32 PMBs licensed by the CBN, of which 10 are National and 22 are State. The number may likely increase with time,” he said. It will be recalled that under a new guideline, CBN requested the then 89 primary mortgage institutions (PMIs) in the country to recapitalise to N5 billion and N2.5 billion to operate as National and State PMBs, respectively, with a 13-month deadline from November, 2011 to December, 2012. While the National PMBs are allowed to operate in any or all parts of the federation, the State PMBs are restricted to operate in one state. This caused a lot of ripples in the industry, prompting the apex bank to extend the deadline for compliance to April 30, 2013. But in another circular issued on March 20, 2013, CBN extended C M Y K
the deadline to December 2013, to afford all affected PMBs sufficient time to exercise the options for capital raising, business combination or downscaling. It later extended the recapitalisation deadline to ensure conclusion of on-going transactions to June 30, 2014. The apex bank also issued revised guidelines streamlining areas of
operations for PMBs. The new guidelines restrict the operations of PMBs to the provision of mortgage finance and excluded other related activities such as the provision of estate management duties. They are authorised to among other services to engage in the business of mortgage finance, real estate construction finance, acceptance of savings and
time/term deposits and acceptance of mortgage-focused demand deposits. Other approved services include drawing from mortgage funds, including National Housing Fund, NHF, facility for on-lending, financial advisory services for mortgage customers and other services approved by the CBN. Previously, mortgage firms were allowed to grant loans or advances for the purchase or building, improvement or extension of a dwelling/commercial house, acceptance of savings and deposits, management of pension funds/ schemes, performing estate management duties as well as offering of project consultancy services for estate development and engaging in estate development through loan syndication. Although CBN did not make available the list of the newly licensed PMBs, Vanguard however, gathered from reliable sources that the following attained National PMB Continues on page 22
ROUNDTABLE - From left :Yomi Abiola-Olawaiye, Business Development Manager, Centrespread; Bisi Adeyemi, MD, DCSL Corporate Services Ltd; Governor Babatunde Fashola of Lagos State and Prince Yemi Adefulu, President, Nigerian-British Chamber of Commerce during a business roundtable held in Lagos. Photo Lamidi Bamidele C M Y K