Top 10 Reverse Mortgage Lenders 2014

Creditors should help lenders get ready to help borrower with rising interest rate - CML

Bank of England has tried to calm down borrower reluctance by saying that interest rates will increase in a number of " baby-steps " and are likely to be at lower levels than before the credit crunch. For the end of the third trimester of this year, CML figures show that the number of defaulting mortgage payments corresponds to 2.5% of more than 2.5% of the mortgage net amounted to 125,100, or 1.12% loan overdue.

Mortgage defaults are now at their low since the first three months of 2008.

Loans to the Nigeriaian private enterprise up | Nigeria 2016

In a context of weakening economies and low fuel costs, the Nigeria bank industry - populated by heavy weight local actors and the biggest NSE stock market segment - has tried to act as an ever more important facilitator and facilitate economic diversification by increasing loans from the retail and small and mid cap (SME) sectors.

Macro-economic fundamentals, however, include a devaluing euro and changes in the government's tax policies, which affect the capacity of banking institutions to invest money in the wider world. In addition, the Central Bank of Nigeria (CBN) has presented a number of proposals to streamline the sector's credit risks and further mitigate banks' sovereign credit risks, which could lead to significant changes in the competition environment.

Nigeria has 27 banking establishments, a number that has hardly moved since a 2004 period of consolidations, from 89 to 25. There are 21 business and five retail banking houses and one interest-free one. In December 2015, there were 5468 offices in Nigeria and two abroad.

CBN figures show that the balance sheet totals of business lending institutions rose by 2.3% in 2015, to reach N28. 1 percent increase in net worth in 2014 and 14 over the previous year (y-o-y). In 2015, retail and non-interest retail financial institutions recorded significantly higher wealth creation with an increase of 19.6% and 24% respectively. Both of these gains, however, were driven from a significantly lower base, with N251.

In June 2016, publicly traded financials, as well as insurers, had a capitalization of N2.66 trillion (USD 8.4 billion), equivalent to 15 trillion. 4 percent of the NSE population. It is the second biggest sector after capital goods in terms of stock exchanges in the state. In addition, banking stock dealing is largely to blame for the stock market's solvency, accounting for 93% of NSE share turnovers in the last weekend of 2015.

By 2015, the stock markets of commercial and industrial property companies quoted on the NSE had fallen by 23%, in addition to the overall stock markets. However, dividends are still high and although GDP grew at a significantly slower pace in 2015, several large financial institutions such as the Zenith and Guaranty Trust Bank (GTB ank) retained or raised dividends in the 4th quater of 2015, offering continuous cash flows to depositors and compensating for declines in equity valuations that are likely to persist.

In 2015, the finance industry (non-insurance sector) accounted for 2.7% of GDP at 2010 steady rates. The volume of loans increased by 15. 2 percent compared to 2015 on N52. 2 per cent of loans in 2015, a small rise of 23 per cent. 1 percent in 2014. Further important borrowers in 2015 were manufacturers (14.1%), retailers (8.2%), financiers (6.0%) and the state ( 5.7%).

In 2015, the key interest rate of business lenders was slightly higher, at 16.9% from 16. in 2014. Interest on deposits was also slightly higher, up from 3.4% in 2014 to 3.7% in 2015, and remained higher in comparison with 2010-13, when interest was between 1.4% and 2.2%.

The CBN issued its National Strategy on Fiscal Integration in 2012, which aimed to "reduce the proportion of Nigerian adults outside the finance service industry from 46". The latest figures from Enhancing Finance Innovation and Access (EFInA), an NGO dedicated to fostering Nigeria's integration, show that the proportion of vulnerable individuals expelled from the finance system has dropped to 39.5% of the total by 2014.

Considerable possibilities to promote integration and attract more funds into the formal system can be found in methodologies such as wireless networking (see analysis). In 2014, the Pension Reform Act was another step taken by the federal authorities to promote schemes and schemes to enhance people' involvement in the business world, by extending entitlement conditions.

"Retirement funds in Nigeria are a ripe area in the finance service branch and a scarce point of health in the business. It has the growth capacity to expand enormously in the years ahead," said Eguarekhide Longe, Chief Executive Officer of AIICO Pensions, OBG. Similar to many African developing countries, Nigeria's credit interest rate for the credit system of the local economies and the domestic sectors is relatively low, despite the large scale of the country's bankers.

Not only is this due to an untransparent lending climate, but also to the trend for corporate banking to look for guarantee yields on sovereign bonds. The CBN reports that overall lending to the retail banking industry increased by 8.4% in 2015 to N54. 7 percent in 2015, which makes 16.

1 per cent of the balance sheet totals in the bank industry. An important cornerstone of the CBN policy to reverse this tendency has been to improve non-fuel economies' ability to obtain loans. In addition to cutting interest rates by two percent points to 11% in November 2015, the CBN reduced the CRR from 25% to 20%.

Reducing the minimum reserves was part of the declared "moral cleansing policy" of the Federal Central Bank to convince the banking sector to force the extra 5% into the economies in the shape of loans without expressly obliging them to do so. Olubunmi Asaolu, director of FBN Capital's Equities Research, however, said to OBG that the administration may need to do more to create incentives for lending to the banking sector.

"Asaolu said the banking industry needs more incentive, not compulsion. "When there is a large debtor in a crucial industry or one that the governments consider very important, governments may be willing to make available extra funds if the governments get involved and offer sound safeguards. It would transfer part of the exposure from the institution to the CBN and possibly give the institutions sufficient coverage to raise credit.

Provided this succeeds, a move towards home manufacturing and Naira-based service could enable banking institutions to expand their scope, especially for SME. It is the outcome of downside pressures on the naive due to the low price of crude Oil (see Economic chapter), reinforced by the introduction of checks on capitals in end-2015 and early 2016 and the ensuing switch to nominal free floating in June 2016.

In view of the incapacity of importer countries to quickly procure enough currency to carry out transactions due to checks on capitals with commitments as letter of credits issued, bankers were compelled to use their own currency reserve to cover the differential. With no clear vision of when the CBN will deliver more FX cash, several institutes have been slowing down the pace of issuing new L/Cs.

During the last years several European bank have launched bonds. The GTB announced the issuance of a $500 million Euro bond due May 2016 and First Bank and Fidelity both have $500 million and $300 million in outstanding indebtedness due 2018, respectively. FBN Capital's Asaolu said to OBG that "the financial institutions will not have large amounts of their short maturities of Euros in relation to their overall liabilities" and added that the institutions will have sufficient funds and timing to raise the necessary dollar to pay their obligations on schedule.

Another obstacle that the industry has to overcome in its credit effort is the reorganisation of public bank balances, which also consume a small amount of cash. Nigeria's recent move to the Treasury Singles ( "TSA") has diverted resources in tens of millions of government bank balances across the entire bank system to a CBN havete.

According to some estimations, the creation of the TSA has eliminated N1.3 trillion (USD 4.1 billion) or about 10% of overall cash in accounts from the financial system. Given the inefficiency of lending and the malfunctioning of public administration, the most vulnerable sectors are those in the power industry. For example, the general business community, which according to Oni accounts for about 12% of banks' overall credit portfolio, may face issues related to the former regulatory framework and the devaluation of currencies.

Four large financial institutions - Diamond Bank, Ecobank, First Bank and First City Monument Bank - were again concerned about the first three months of 2016. Oni said OBG that "there is so far no evidence that a default is likely for any of the key systemic banks", but low earnings will not be sustainable in the long run.

In order to increase openness, the CBN has been licensing three privately-owned loan offices since 2009: CR Services, headquartered in Nigeria, CRC Cr credits office, established as a joint venture between Nigerian companies and the US Dun and Bradstreet, and Xpert Decision Systems Cr credits office of South Africa. According to the World Bank "DoingBusiness2016", the cover of the lending office of the adults rose to 6.7% in 2015, compared to 5.8% in 2014.

By 2015, this had been 5,6 million persons and 715,363 companies. To get a more comprehensive view of an applicant's loan histories, bankers and institutes must review at least two of the three offices before making a final determination. In 2010, the foundation of the state-owned Asset Management Corporation of Nigeria (AMCON) following the 2008/09 fiscal turmoil boosted the asset value of the banking industry.

Dubbed "Bad debt Bank", it was introduced with an expected life of 10 years and a mandated to absorb non-performing loan obligations from banks' books. By the end of 2015, AMCON had received 57% of N4.02 trillion ($12.7 billion) in loan repayments at a cost of N1.76 trillion ($5.6 billion), representing a 7% rate of yield.

Today, AMCON's asset allocation mainly comprises investments in Crude and Natural Resources (27.2%), General Trading (18.5%), Debt and Equity Investments (17.9%), Production (6.2%) and Finances and Insurances (5.5%). The CBN has taken on an increasing pro-active regulatory function for the bank industry in recent years, making sure that lenders comply with global standards, mitigate exposures and promote FI.

The Scope, Condition and Minimum Standard for Commercial Banks Regulations transposed by the CBN in 2010 require that, in order to obtain a new ISD license, institutions must provide an operational control regime, develop and enforce a riskmanagement regime, comply with IFRS, and comply with minimum regulatory capital adequacy criteria in line with the Bank's geographical outreach.

Regulatory banking institutions restricted to operations in no more than 12 related states are obligated to hold at least N10 billion ($31.6 million) of equity or more. SNBs - which can freely do business throughout the nation - are obligated to have at least N25 billion ($78.9 million) of equity, while N50 billion ($157.85 million) is the regulatory threshold for IRBs.

Bank regulations expressly state that the CBN is authorised to adapt these parametres. As a series of marginal loans triggered a local bank failure in 2008 and 2009, the CBN has drastically tightened implementation and oversight. In addition, more and more bankers are being penalised for breaches of regulations and directives, e.g. in connection with the TSA or in connection with moneylending.

Consequently, major banking institutions have become more prudent to guarantee regulatory oversight and prevent them from coming into conflict with it. In many cases, they have appointed Chief Compliance Officer to executive positions. However, possible changes to the Basel III standard may cause changes to the regulatory framework for lenders.

European supervisors have followed an Basel III interpretative approach according to which government debts in the local currencies of the country where the institution is located - an integral part of the financial asset base of the Nigeria financial industry - do not necessarily involve venture cap. Re-interpreting this regulation, due in the second half of 2016, could have a significant impact on the amount of venture money held by bankers as Nigeria proceeds to fully implement the Basel Accord recommendation.

Eight of the main local financial institutions were classified as SIBs: GTB Bank, GTB Bank, Zenith Bank, United Bank for Africa (UBA), Access Bank, Skye Bank, Ecobank Nigeria und Diamond Bank. Moreover, Tier 2 can only represent 25 per cent of the eligible equity for SMEs - the other 75 per cent is Tier 1 - while for other institutions the threshold is 50 per cent.

The 30% required cash flow is the same for all major financial institutions. Founded in 1894, First is Nigeria's biggest banking institution in financial value and has more than 750 branch offices throughout the country. Headquartered in West Africa, the EIB has two subsidiary companies in Europe, one in London and one in Paris.

In December 2015, the balance sheet totals were shown as N4.2 trillion (USD 13.3 billion), of which N4.3 trillion (USD 13.6 billion) were shown one year earlier. In 2015, the level of the 2010 Annual General Meeting was 13. The NPL rate increased from 3% in 2014 to 3%, while the NPL rate increased from 2.9% in 2014 to 18. 9 percent in 2015. It also has offices in several Western Africa markets, the UK, South Africa and China.

From 2014 to 2015, the balance sheet increased from N3.4 billion ($10.7 million) to N3.8 billion ($12 million), while the balance sheet increased by 1% to 20%. UBA, which has its origins in the British French Banking Group, was founded in February 1961, just after Nigeria gained sovereignty. Today, the Group is present throughout the world. As of December 2015, equity and key figures for solvency were high at 20% and 53%, respectively, compared with 17% and 45% in the previous year.

In the same period, the NPL ratios were 1.7% and the balance sheet was N2.8 trillion (USD 8.8 billion). Access is a premier corporate banking institution with representatives and affiliates in West Africa, Central Africa, China, the UAE and the UK. The balance sheet increased slightly from N2.1 trillion (USD 6.6 billion) in 2014 to N2.6 trillion (USD 8.2 billion) in the following year.

At year-end 2015, cash and cash equivalents were up 2% year-on-year to 38%, while the CAR also grew from 18% to 18%. In contrast to other large Nigeria lenders, Access's NPL ratios also recovered, dropping from 2.2% in 2014 to only 1.7% next year. The Group' s balance sheet grew slightly from N2.4 trillion (USD 7.6 billion) in 2014 to N2.5 trillion (USD 7.9 billion) in the following year.

In the course of the reporting year, the banks' equity base and key figures for solvency increased from 17 to 17. Ecobank, based in Togo, is active in 36 Africa markets, and its presence in Nigeria was reinforced by the takeover of Oceanic Bank in 2011. The balance sheet totals of the Nigeria affiliate amounted to N 1.8 billion (N 5.7 billion) in December 2015, after N 1.78 billion (N 5.6 billion) in the year before.

At the end of 2015, the level of sales in the Carbon Fund was 19%, up from 16% in the year before. Diamond Bank, founded in 1990, is a retailer with 317 offices in Nigeria, Benin, Ivory Coast, Senegal and Togo. In 2015, the firm recorded a balance sheet of N1.8 trillion (USD 5.7 billion), down from N1.9 trillion (USD 6 billion) in 2014.

3 per cent in 2015 from 17 January to 31 December 2015 in 2014, while the NDPs increased by 33. 5 billion ($134,2 million) in 2014 on N56. However, cash and cash equivalents increased from 41 to 52.8% in 2015. Seven percent in 2014. Skye has more than 200 branch offices throughout Nigeria and started operating in 2006. It also has a West African footprint.

In September 2015, his CAR was 17. The balance sheet balance over the year also rose from N1.1 trillion ($3.5 billion) to N1.3 trillion ($4.1 billion), but the doubled NPL rate from 2% to 4% over the same horizon was a cause for anxiety. In July 2016, the CBN superseded the Bank's top managers as the solvency situation and non-performing credit rates had been outside the prescribed threshold for some while.

With no annual results published by the Group for 2015, it is hard to know what the Group' s loss has been, but changes at the top have smoothed the way for a new approach. Given the low outlook for earnings expansion, the banking industry is concentrating on cost-cutting initiatives, with recent waves of redundancies across the industry worsening Nigeria's long-term jobless record and shrinking the size of the Mittelklasse.

It has also experienced a number of recent evolutions in both front and back office technologies. Consistent with the government's effort to introduce domestic e- and passports, the CBN launched the Bank Verification Number (BVN) in early 2014 - a clear numerical identification code allocated to each accountholder in the official bank system.

Before the BVN, there was no possibility to verify and link biographic information to monitor bank operations, loans and other financing operations. Resident registrations were prolonged until 31 October 2015, while foreigners had until 31 January 2016 to sign up at a Nigeria Embassy.

A large part of the Nigeria bank industry is now in agreement. The CBN is also trying to promote noncash payments on the consumers' side of the retail market through the use of mobiles, e-banking and point-of-sale equipment. The CBN's "cashless" nation-wide approach introduced in July 2014 aims to modernize the country's payments system, lower the costs of bank servicing and operations, and enhance the efficiency of monetar y policies by integrating more operations into the official system.

These efforts are supported by the fact that almost all commercial businesses have a web or portable operating system that allows clients to have remote control of bank operations. In addition, finance technologies firms such as the Nigeria-based company Interswitch are creating applications and operating systems for the operation of POS terminal, POS and other online transactionservices. 8 percent to N6.2 trillion ($19.6 billion) in 2015.

6 million in 2015. Also the value of other types of e-commerce rose in 2015: In Nigeria, Islamist financing is described as interest-free financing. Even though about 50% of the Nigerian people are Muslims, interest-free financing has not yet found a firm place in the Nigerian bank system. Whilst some lenders have opened departments devoted to interest-free financing, Jaiz Bank is the only provider of credit exclusively devoted to providing the requested assistance.

During the first three months of 2016, Jaiz heralded its intention to open 10 new offices nationwide by the end of the year, an expansion of more than 50% over the end of 2015. The balance sheet in the non-interest bearing business has increased significantly in recent years, with gains of 33.7% in 2014 and 24% in 2015, when the N55 business recorded a registration.

6 billion ($175.5 million) in asset values against N28. 1 trillion (USD 88.7 billion) for our business operations in this area.

Among other things, the new regulatory frameworks aim to safeguard deposit takers against non-interest bearing defaults, strengthen trust of the general public in the system and enhance competition. An unused prospective chance for lenders exists in the shape of mortgage loans. In its Financial System Strategy 2020, the Federal Reserve stressed that despite Nigeria's 184 million inhabitants, there were less than 600,000 official mortgage loans in Nigeria that covered only 5% of the country's entire residential property portfolio.

High-quality mortgage interest of up to 28% makes mortgage loans unattainable for most Nigerians. Working with the International Finance Corporation, the US Federal Administration recently established the National Refinance Mortgage Co. (NRMC), a subsidiary mortgage corporation that buys mortgage loans from local financial institutions to release funds for mortgage loans.

The NRMC is at a very early stage, but acquired its first explorative mortgage installment in early 2016.