HAGGAI Savings and Loans Limited has announced a profit before tax of N225.9 million for 2010. This was against the profit before tax of N142.9 million recorded in 2009.Speaking on Wednesday at the 10th yearly general meeting of the bank in Lagos, the Chairman, Simeon Morounfolu, who disclosed this said that the shareholders unanimously agreed to a dividend of 20 kobo per share.Reviewing the past year, the chairman observed that the world economy, which started witnessing improvement in the first half of 2010, experienced a deterioration by the third quarter of 2010. .According to him, the International Monetary Fund (IMF) in its World Economic Outlook (WEO) update of January 2011 titled 'Global Recovery Advances but Remains Uneven' stated that the global economic activity increased by an annualised rate of 3.5 per cent in the 3rd quarter of 2010, a slow down from 5 per cent growth rate in the 2nd quarter of the year.Morounfolu said that the World Bank on its own part said growth in both high income and developing countries is expected to slow somewhat in 2011, mainly reflecting the drop already observed in the 2nd half of 2010.His words: 'The National Bureau of Statistics (NBS) in its release, showed that the Real Gross Domestic Product (GDP) in Nigeria grew by 7.86 per cent in Q3 2010, which is higher than the growth rate of 7.3 per cent recorded in the corresponding period of 2009 and higher than the 7.69 recorded in Q2 2010. The growth rate of 7.86 per cent in Q3 2010 is the highest growth rate recorded in recent times. Real GDP increased by 0.56 per cent in Q3 2010 over the level in the corresponding period of 2009.'The Universal Banking Model was repealed in Nigeria and a guideline for a new banking model was introduced. Banks operating in Nigeria are required to apply to CBN for a new operating licence which can either be commercial or merchant banking licence. Commercial Banks can operate at regional, national and international levels with paid up share capital of N10 billion, N25 billion and N100 billion respectively.'The objective of the new model, according to the CentralBank of Nigeria (CBN), is to make banks focus on their core banking business and develop specialisation. Each bank is expected to submit a plan of action on how they intend to transform to the new system. After obtaining the new banking licence, they are expected to discontinue those lines of businesses that are not consistent with the terms of the new banking licences or divest from non-banking subsidiaries in which they are equity ownership.'If the initial pronouncement on sub-sector is anything to go by, it is expected that N5 billion would be the mark for Mortgage banks. The challenge is therefore how operators within the industry can mop-up enough funds from the market to keep in line with this regulatory directive. This task is made even more difficult by the experience of investors in the stock market. With many of them having been faced with a situation where their initial investment has become totally lost, or for the luckier ones, hugely eroded, it is doubtful if anyone will want to invest funds in the sub-sector."
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