The Nigerian Mortgage Refinance Company (NMRC) has demonstrated resilience in Nigeria’s weak economic and business environment with an impressive and profitable outing in its financial year ended December 31, 2017.
Besides a 31.4 percent rise in net interest income to N3.97 billion in 2017 from N3.02 billion in 2016, the company, within the period under review, grew its profit before tax (PBT) to N1.9 billion, up from N1.2 billion in 2016, representing 58.3 percent increase.
Kehinde Ogundimu, acting chief executive, who gave these hints Tuesday at the company’s 4th Annual General Meeting in Lagos, also revealed that their balance sheet increased to N42.54 billion, up from N40.79 billion in 2016.
“Our cost-to-income ratio, capital adequacy ratio, and other regulatory and performance metrics were significantly better in 2017 than 2016”, Ogundimu told shareholders who commended the performance, and also approved all the resolutions presented at the AGM, including the resolution for the up-scaling of the company’s debt issuance programme from N140 billion to N440 billion to enable the company deliver on its mandate of making housing finance more affordable and accessible.
Notwithstanding the slow, fragile and vulnerable recovery of the economy, the company is optimistic of a better outing in 2018, believing that the economy will pick up on the back of pro-growth policies and structural changes being implemented by the government.
The company is not unmindful of the uncertainty surrounding the 2019 general election and its attendant risk to economic growth. But, according to Charles Okeahalam, the comnpany’s chairman, “we believe that our company is well positioned to adapt and benefit from the improvements in the economy in 2018 and beyond”.
Inaugurated in January 2014 with the mandate to not only increase access to housing, but also make it affordable to a good number of low income and home-seeking Nigerians, NMRC which is Nigeria’s only secondary mortgage institution, has left strong footprints in the country’s fledgling mortgage market.
The company is a private sector-led company with the public purpose of developing the primary and secondary mortgage markets by raising long-term funds from the capital markets, encouraging and promoting home ownership in Nigeria.
Recently, it completed its N11billion 13.80 percent Series 2 Bond Issuance under its N440 billion Medium Term Note Programme. The net proceeds from this issuance will be used to refinance eligible mortgage loans originated by the participating mortgage lending banks.
Before now, the company had raised its inaugural N8 billion 14.9 percent Series 1 Bond issue in July 2015 – which was fully deployed towards refinancing legacy mortgage loan portfolios of the participating member-mortgage lending banks.
Through partnerships, the company has been able to address some of the challenges limiting the growth of the mortgage market in the country. Ogundimu revealed that their collaboration with the Central Bank of Nigeria (CBN), the Mortgage Bankers Association of Nigeria (MBAN) and other stakeholders, led to the development and deployment of the Uniform Underwriting Standards for the self-employment or the informal sector of the economy.
To address the dearth of short term funds for mortgage origination by member-banks, NMRC also partnered with other stakeholders to setup the Mortgage Warehouse Funding Limited (MWFL) which, Ogundimu explained, was a special purpose entity that would provide affordable funds to member-banks for the origination of mortgages that NMRC would refinance.