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15 Mortgage Banks Yet To Meet Premium Deposit Insurance Obligations



15 Mortgage Banks Yet To Meet Premium Deposit Insurance Obligations


By Dipo Olowookere

Managing Director/Chief Executive of Nigeria Deposit Insurance Corporation (NDIC), Mr Umaru Ibrahim, has revealed that 15 out of the 42 mortgage banks in the country were yet to meet their premium obligations for deposit insurance.

Mr Ibrahim made this disclosure at a sensitisation workshop held in Lagos for operators of Primary Mortgage Banks (MPBs), where he was represented by the Executive Director of Corporate Services at NDIC, Mrs Omolola Abiola-Edewor.

“Our records indicate that 15 out of 42 PMBs are yet to meet their premium obligation. I therefore wish to appeal to you all to pay your premium promptly,” Mr Ibrahim said.

NDIC insures depositor’s money in commercial banks, mortgage banks and microfinance banks.

Each insured institution is mandated to pay an annual deposit insurance premium to the corporation.

The NDIC on the other hand pay depositors of liquidated insured institutions the stipulated Maximum Insured Deposit (MID), which is presently N500, 000 for depositors of commercial banks and mortgage banks.

According to the NDIC boss, the recent increase in the maximum insured deposit of PMBs was aimed at bridging the dichotomy between them and commercial banks and engenders public confidence in the mortgage bank sub-sector.

He said the need to complement this decision and boost risk management practices in the sub-sector, prompted the Corporation to deploy Differential Premium Assessment System (DPAS) in pricing the deposit premium of PMBs.

“The creation of Nigeria Mortgage Refinancing Company (NMRC) as a wholesale funding window which refinances mortgage portfolios of PMBs and Deposit Money Banks (DMBs) is targeted at providing a robust Liquidity for the sub-sector.

“NMRC and Other Lenders could only continue to play their statutory role in a space where the Operators’ exhibit market discipline as specified in the banks’ Enterprise Risk Management Framework (ERMF).

“On its part, NDIC as a risk minimizer obtained the approval of the Honourable Minister of Finance on the 4th august, 2016 for the deployment of DPAS in computing the deposit insurance premium of PMBs to encourage market discipline.

“DPAS speaks to strong ERMF. The computation trajectory incorporates sound strategic planning and transformative business model. It also implicitly addresses the issue of moral hazard which guarantees caution and avoidance of excessive risk taking in the interest of both operators and subscribers.

“To the operators in particular, the Risk Based Premium System (DPAS) allows the  institution to pay much less premium than would have been the case had the  alternative, flat rate system, been adopted.

“Little wonder that many jurisdictions have opted for DPAS in Deposit Premium Pricing.

“In most jurisdictions that practice explicit Deposit Insurance Scheme, the starting point for deposit insurance system pricing is usually the Flat Rate approach before migration to the DPAS.

“However, the Flat Rate method failed to compensate for effective Risk Management and engenders moral hazard. On the other hand, DPAS incorporates the benefits of effective risk management.

“From the forgoing, DPAS compensates the Mortgage Sector since PMBs’ with better Enterprise Risk Management pay less premium, while, PMBs with weak risk practices pay more. The major benefits of implementing the DPAS are fair pricing of insurance premium and reduction in premium,” he said at the occasion.

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan. Mr Olowookere can be reached via


Brent Soars on Iraq Supply Concerns, Ease in Banking Crisis



Brent Price

By Adedapo Adesanya

The price of Brent crude futures rose by 1.3 per cent or 99 cents to $79.27 per barrel on Thursday as banking crisis fears further eased and no resolution in sight yet for the cut-off of the flow of Iraqi Kurdistan oil to Turkey.

Also, the US West Texas Intermediate crude rose by 1.9 per cent or $1.40 to $74.37 per barrel as producers shut in or reduced output at several oilfields in the semi-autonomous Kurdistan region of northern Iraq following a halt to the northern export pipeline.

About 400,000 barrels per day have been cut off with the pipeline shutdown over an international arbitration ruling in favour of Iraq against Turkey,  and this continues to put upward pressure on oil prices.

Likewise, fears that may linger about the potential broader economic impact in the aftermath of the failure of Silicon Valley Bank (SVB) and Signature Bank, as well as the share crash and rescue bid for giant Credit Suisse, and pressure on other regional banks in the US appear to be easing.

Also supporting prices was a Wednesday report from the US Energy Information Administration (EIA) that crude oil stockpiles in the world’s largest producer fell unexpectedly in the week of March 24 to a two-year low.

Crude inventories dropped by 7.5 million barrels, compared with expectations for a rise of 100,000 barrels.

These factors offset bearish sentiment after a lower-than-expected cut to Russian crude oil production in the first three weeks of March, as numbers showed that there was a 300,000 barrels per day production decline compared with targeted cuts of 500,000 barrels per day, or about 5 per cent of Russian output.

Markets are now waiting for the US spending and inflation data due on Friday and the resulting impact on the value of the US Dollar, which impacts oil prices.

Also driving oil prices Thursday have been statements ahead of a planned meeting of the Organisation of the Petroleum Exporting Countries and its allies (OPEC+) on Monday, where delegates have indicated that the 23-man cartel will likely stick to its current production cut plan.

Despite the low prices prompted in part by the banking crisis fears, analysts noted that OPEC+ would stay the course and not react by reducing output further.

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Nigerian Exchange Witnesses N318.52bn Listings in Q1 2023



Kemi Adetiba Nigerian Exchange

By Aduragbemi Omiyale

The Nigerian Exchange (NGX) Limited witnessed the listing of N318.52 billion worth of securities in the first quarter of 2023, data from the X-Compliance report of the bourse has revealed.

This cut across equities, fixed income, mutual funds and derivatives categories.

The X-Compliance report is a transparency initiative of NGX designed to maintain market integrity and protect investors by providing compliance-related information on all listed companies.

Through the report, NGX ensures that it provides timely information to investors to aid their capital allocation decisions and enable a properly functioning capital market.

According to the report, NGX saw N11.23 billion in Federal Government of Nigeria bond listings which constituted FGN Savings Bonds with maturities ranging between 2024 and 2026.

Lagos State Government issued the only bond by a sub-sovereign entity with its N137.33 billion series 1V, 10-year 13%, Fixed Rate Bonds due 2031 under its N500 billion debt issuance program.

The corporate bond segment recorded N112.42 billion senior unsecured bond listing from Dangote Industries Funding Plc and N31.36 billion in Sukuk Issuances from Taj Bank and Family Homes under their respective Sukuk Issuance programmes.

FTN Cocoa Processors Plc and Neimeth International Pharmaceuticals Plc both did supplementary listings of N850 million and N3.68 billion of shares, respectively.

Africa Plus Partners Nigeria Limited also listed its mutual fund, Africa Infra Plus 1, the first Carbon Plus naira-denominated fund to be listed on the Exchange, at a market value of N21.65 billion.

NGX also continued to drive participation in its derivatives market with the listing of the NGX Pension index Futures Contract and NGX30 Index Futures Contract.

Recall that the Chief Executive Officer of NGX, Mr Temi Popoola, had noted that the Exchange had a renewed focus on listings for the year 2023.

“We will be using listings as a vehicle for meeting strategic aspirations as the new dispensation comes in through increased advocacy and engagements,” he had said.

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Nigeria’s Debt Profile Jumps 17% to N46.25trn in 2022



debt profile

By Adedapo Adesanya

Nigeria’s total public debt stock increased by 17 per cent to N46.25 trillion or $103.11 billion as of December 2022 from N39.56 trillion or $95.77 billion in 2021.

This information was revealed by the Debt Management Office (DMO) on Thursday.

This means that the country’s debt profile precisely increased by 16.9 per cent or N6.69 trillion or $7.34 billion within one year, as the government borrow funds from various quarters for its budget deficits.

The agency said the new figures comprise the domestic and external total debt stocks of the federal government and the sub-national governments (36 state governments and the Federal Capital Territory).

The DMO statement partly read, “As of December 31, 2022, the total public debt stock was N46.25 trillion or $103.11 billion.

“In terms of composition, total domestic debt stock was N27.55 trillion ($61.42 billion) while total external debt stock was N18.70 trillion ($41.69 billion).

“Amongst the reasons for the increase in the total public debt stock were new borrowings by the FGN and sub-national governments, primarily to fund budget deficits and execute projects. The issuance of promissory notes by the FGN to settle some liabilities also contributed to the growth in the debt stock.

“On-going efforts by the government to increase revenues from oil and non-oil sources through initiatives such as the Finance Acts and the Strategic Revenue Mobilization initiative are expected to support debt sustainability.”

“The total public debt to gross domestic product (GDP) ratio for December 31, 2022, was 23.20 per cent and indicates a slight increase from the figure for December 31, 2022, at 22.47 per cent.

“The ratio of 23.20 per cent is within the 40 per cent limit self-imposed by Nigeria, the 55 per cent limit recommended by the World Bank/International Monetary Fund, and the 70 per cent limit recommended by the Economic Community of West African States,” the debt office said.

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