The Acting Managing Director of Infinity Trust Mortgage (ITMB) Bank Ngozi Chukwu, has called on the government to implement policies that would drive the growth and development of Nigeria’s mortgage industry, which currently contributes less than 1% to the nation’s economy. She was speaking at the Facts Behind the Figures Presentation of the Bank at the Nigerian Exchange on Thursday in Lagos.
She stressed the critical role that a robust mortgage sector plays in the overall economic progress of the country highlighting several challenges facing the sector, including high interest rates, expensive and lengthy registration processes, and the lack of unified foreclosure laws across many states.
“Government policies have long hampered the industry’s growth. Mortgages are costly to register, and the process is slow, making it difficult for customers to manage both high interest rates and the high costs of land title registration,” she said.
‘’It’s a problem we have battled it for too long, government policy. So you give out mortgages, you are not able to register it. Well, you start the process, and it takes you so long, and then it is so expensive. So you are trying to customers are paying high interest rates for their mortgage. Now you are also making them pay very dearly to be able to register their title of land registry.
‘’This is very prohibitive. It doesn’t encourage mortgage. What you will find is that most people rather have a private arrangement with a developer where they pay in peace meal until they finish pay, instead of being subjected to pay high interest rate and also paying high cost of perfection of their title. This has not encouraged the growth of the mortgage gage industry. And then, of course, the absence of unified foreclosure laws a few states in in nine years have passed the foreclosure I know Kaduna, for instance, and I think Lagos state, but a lot of the other states haven’t. ‘’
She also pointed out that the absence of unified foreclosure laws across most states hinders mortgage banks from efficiently managing defaults. “Without these laws, mortgage banks can spend up to 15 years in court before recovering funds from defaulting customers,” Chukwu explained, noting that this significantly discourages industry growth.
Chukwu also addressed the issue of insecurity, which she said negatively impacts business operations. To solve these problems, she urged the government to directly intervene in the mortgage sector by providing long-term funding at reduced interest rates to mortgage banks, which could then pass these savings on to customers. She also suggested that the industry should focus on using locally produced materials to reduce the cost of housing construction.
‘’Insecurity is another problem that we are grappling with right now, and it’s impacting negatively on our business. So what is the solution? Well, I won’t say that we have all the answers, but what we suggest for long term funding, we wish that government would directly intervene. What we have now is an indirect intervention from governments, through the NMRC, DBN and other impact investors, but we wish that they would have direct intervention, maybe set aside, I don’t know, some funds that will be given at very reduced interest rates to the mortgage banks, and so we unleashed it at also very minimal rate. ‘’
She praised the government’s recent initiative allowing contributors to access 25% of their retirement savings for home purchases, describing it as a “very good initiative” that has opened up the market. She also identified the diaspora market as an untapped opportunity for growth, urging mortgage banks to capitalize on the new underwriting standards developed for this segment.
Chukwu concluded by urging the government to streamline the title registration process, improve security, and continue supporting the industry to unlock its full potential.
Facts and Figures
Meanwhile, Infinity Trust Mortgage Bank’s chairman welcomed the guests and reiterated the bank’s unwavering commitment to excellence, resilience, and growth. The bank, which has consistently paid dividends since its listing in 2013, announced a pipeline initiative to raise an additional 50 billion Naira through private placement. This initiative aims to capitalize on new opportunities and expand the bank’s reach, with a mission to provide innovative, customer-centered solutions that foster sustainable growth and create long-
The bank’s gross earnings grew from 1.3 billion Naira in 2020 to 2.9 billion Naira in 2023, with a net operating income of 2.2 billion Naira in 2023 and 1.3 billion Naira at half-year 2024. Its profit after tax also grew from 0.41 billion Naira in 2020 to 1 billion Naira in 2023, with a current profit of 0.71 million Naira. The bank’s loans and advances grew from 7.1 billion Naira in 2020 to 15.4 billion Naira in 2023, with a total asset growth from 13.3 billion Naira to 20.7 billion Naira. Its total also equity grew from 6.4 billion Naira in 2020 to 7.9 billion Naira in 2023, with a current total equity of 7.2 billion Naira.
Plans to raise 50 billion Naira through private placement
Infinity Trust Mortgage Bank reported impressive financial results, including a 150% growth in dividends for 2023 and a 50% increase in loans and advances. The bank also revealed plans to raise 50 billion Naira through private placement to fuel its expansion into digital banking and micro, small, and medium enterprise (MSME) financing. Despite facing challenges such as high interest rates, rising operational costs, and regulatory hurdles, the bank remains committed to financial inclusion and leveraging technology to enhance operational efficiency.
During the session, the advantages of listing on NGX were emphasized, including access to capital, increased visibility, and enhanced liquidity. NGX’s commitment to transparency and its ongoing review of listing rules aim to lower barriers to entry, attract more companies, and align with international standards. Additionally, NGX’s advocacy efforts with the Nigerian government on tax reforms and foreign exchange allocation are seen as pivotal in boosting investor confidence and ensuring market stability.
