AMID ongoing reforms in the mortgage sector, frontline mortgage firm, Messrs Intercontinental Homes Savings and Loans Plc may have began operation changes in line with new Central Bank of Nigeria (CBN) mortgage guidelines, towards sustaining it's performance and shoring up shareholders' fund to the tune of N5 billion.The indication emerged at the third annual general meeting held at the Virginrose Resorts in Lagos, where the chairman of the board Mr. Herbert Wigwe, represented by a member of the board, Mr. Victor Etuokwu disclosed that gradual recovery of the global economy and the various financial sector reforms of the CBN gave rise to an improved performance in 2010 with gross earnings rising by 14.2 per cent from N1.18 billion in 2009 to N1.35 billion in 2010.According to the financial statement of the mortgage firm, profit before tax was N138 million as against a loss of N2.86 billion recorded in 2009, while profit after tax stood at N180 million as against a loss of N2.16 billion recorded in 2009. 'The attendant liquidity squeeze in the economy had an adverse effect on the mortgage and real estate sub sector, which is our main source of income. Furthermore, the sky-rocketing cost of building materials, loan defaults amongst others all contributed .to our 2009 loss position as our company was requested to make huge provisions for it's non- performing assets,' Wigwe said.He commended various step being taken by the regulatory bodies in trying to reform and promote a more robust housing and mortgage system. Wigwe advised that serious attention has to be gives to major challenges facing the effective provision of affordable housing, such as the longstanding issue of ownership under the Land Use Act and the high cost of building materials, if the Millennium Development Goal on housing is to be achieved.The board chairman recalled that efforts made to boost performance of the sector include Federal Mortgage Bank of Nigeria (FMBN) changes to the operations of the National Housing Fund by increasing the maximum loan per contributor from N5 million to N15 million and recognizing other financial institutions such a universal banks, pension fund administrators, insurance companies and micro finance banks as mortgage loan originators.He also noted that 'following of the merger of both Access Bank Plc and Intercontinental Bank Plc by the shareholders of both banks, the conclusion of a seamless systems integration, Intercontinental Homes is now a subsidiary of Access Bank,' and a new board has been constituted in November last year.The managing director, Intercontinental Homes, Mr. Adeniyi Akinlusi told journalists that with a housing deficit of about 16 million, there are opportunities for mortgage banks. 'For Intercontinental Homes like majority of other players in the sector, this is largely a transition year as there are some activities mortgage banks cannot undertake from next year, particularly real estate activity. Mortgage banks have to wind down on retail and consumer banking. Its when mortgage banks focus on mortgage banking that it can focus more on ensuring Nigerians realize their dream of own a home.Intercontinental Homes is now retooling, and refitting to ensure we can play our role effectively. On the issue of recapitalization, we have mortgage banks that can play the national franchise of N5billion and we those who are limited to the state of N2.5billion. For Intercontinental Homes, the direction is clear for us. With a N4.5 billion shareholders' fund, the only logical approach is for us to make it up to N5 billion.He said: 'We working on all of these, which includes make up the funds from profit of our operations from this year or a combination of another mortgage bank. The board and shareholders can also agree on right issue. In terms of operation, we will focus more on mortgage banking.
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