By Our Correspondent
Lagos (INVESTADVOCATE) – Lagos Building and Investment Company (LBIC) has opted for State Mortgage License following the Central Bank of Nigeria’s (CBNs) guideline that categorised Primary Mortgage Institutions (PMIs) into National and State Mortgage Firms.
A Source at the Alausa Head office of the Mortgage Company who pleaded anonymity because he was not authorised to speak with the Press disclosed this recently to InvestAdvocate in Lagos Nigeria.
“We have raised N2.5 billion as stipulated by the new CBNs guideline to operate as a State Primary Mortgage Institution, we are now very liquid†the Source said.
The new Nigeria’s Central Banks guidelines, states that National PMIs are to operate nationwide with minimum paid-up capital of N5 billion, while the state PMIs are to operate in only one state of the Federation with minimum capital of N2.5 billion; LBIC falls under the category.
The decision to extend the deadline again was as a result of reports that only about 25 PMIs have met the new capital requirement barely one month to the expiration of the deadline.
Under the new guidelines, PMIs have been mandated to perform duties such as mortgage finance, real estate construction finance acceptance of savings and time/term deposits, acceptance of mortgage-focused demand deposits.
Abimbola Olayinka, President, Mortgage Banking Association of Nigeria (MBAN), in early February 2013 said at a press conference in Lagos Nigeria that merger talks were going on in the sector as 45 PMIs might not make the deadline.
Olayinka said 25 PMIs out of over 70 of them may survive the April recapitalisation deadline set by the CBN on the Mortgage Sector; hence the pressure on the CBN to once again extend the deadline to December 31 2013.
The CBN had in a Circular dated March 20 2013 and signed by Olufemi Fabamwo, its Director, Other Financial Institutions Supervision Department announced the extension.
The Circular reads thus: “Further to the CBN Circulars Ref: FPR/DIR/CIR/GEN/01/021 of February 15, 2012 and OFI/DIR/CIR/GEN/01/08 of December 14, 2012 titled “Circular to Primary Mortgage Banks on the Revised Guidelines for Primary Mortgage Banksâ€ÂÂ, this is to convey the decision of the Management of the Central Bank of Nigeria to extend the deadline for compliance with the Revised Guidelines for Primary Mortgage Banks (PMBs) from April 30, 2013, to December 31, 2013.
“All PMBs are once again strongly advised to conduct due diligence and seek professional advice in exercising any of the options and to conclude the processes before the new deadline in order to allow sufficient time for capital verification and necessary regulatory approvals.
All directors, particularly the Managing Directors/CEOs of all PMBs are again reminded that prior approval of the CBN is required before the disposal of assets of the bank, as they will be held jointly and severally liable for any asset stripping,†the Circular said.
LBIC had between 17th October and 28th November year 2007 sought to raise N1.8 billion and offered by way of Private Placement (PP) 1.5 billion Ordinary Shares of N1.00 each at N1.20 Kobo per share to select investors.
