Real Estate developers who are able to push their developments 70-89 percent towards completion can now have rest of mind as TrustBond Mortgage Bank has come up with completion finance services which it offers such developers.
TrustBond is one of Nigeria’s leading primary mortgage banks operating with national licence. It is a major shareholder in the Nigerian Mortgage Refinance Company (NMRC) which gives it a firm footing.
Adeniyi Akinlusi, the bank’s CEO, explained to BusinessDay recently that they adopted the completion finance services as an escape from speculative financing for real estate development, adding, “we finance developments that have off-takers and have attained up to 70-80 percent completion. At this stage, we can fund both the development and customers who want mortgages to buy the houses”.
Like other financial institutions, the primary mortgage banks are also struggling with non-performing loans which have put depositor’s funds at risk. The hash economic environment in which businesses operate in Nigeria is also affecting the entire mortgage system.
But TrusBond was able to record a relatively impressive performance in their financials in the year that end4ed December 31,2016. Akinlusi recalled that the delay in the signing and implementation of the budget, the widening disparity between the official and parallel exchange market rates, and rising inflation signaled the start of a difficult year.
“By the second quarter of the year, the economy slid into a recession while GDP contracted by about 1.6 percent by year end in contrast to 2.7 percent growth in 2015; the continuous depreciation of the naira and increasing inflation eroded the gains of business growth significantly; these hash operating conditions impacted negatively on the operating cost of businesses”, he said.
However, the bank was able to surmount these headwinds, growing customer deposits by 10 percent to N2,319 billion, up from N2,108 billion recorded in 2015. This feat becomes all the more significant considering the lure of Federal Government’s Treasury Bill offer which has reduced deposit-interest profile of not only mortgage banks, but all deposit banks.
The CEO also informed that the total assets of the bank rose significantly to N12,416 billion, representing 19 percent increase over the previous year’s figure of N10,022 billion, while its gross earnings rose 24 percent to N1,412.76 billion, up from N1,141.69 billion recorded in 2015.
The bank’s Profit After Tax and other comprehensive income for 2016 stands at N143.6 million, showing an increase of 446 percent over N26.28 million recorded in 2015.
“All these were possible because we were able to improve our performance despite the challenges in the year for companies and the economy because of the commitment of the staff and the board who supported us all the way ”, Akinlusi explained, adding, “our loans and advances were increased; we were also able to increase the core businesses of the company, especially the financial services”.