The Federal Mortgage Bank of Nigeria has recorded an operational surplus of N11.58bn in its 2024 management accounts, marking the first time in over 30 years that the institution has achieved such a financial milestone.
This was disclosed on Wednesday by the Managing Director/Chief Executive of FMBN, Shehu Osidi, at a press conference marking the first anniversary of the bank’s current executive management.
Osidi attributed the achievement to strategic financial management, cost efficiency, and revenue growth.
“In the past year, through our strategic focus on revenue growth, prudent financial management, and cost-efficiency measures, we reduced operational expenses while maintaining service excellence. There was improved discipline across the organisation, leading to better utilisation of resources,” he said.
He, however, noted that the operational surplus is subject to adjustments due to impairment considerations.
“Although this figure is expected to come down significantly when impairment is applied, we have set out to tackle all aspects of our operations that lead to high impairment on our results, especially in tackling the high non-performing loans inherited by the current management,” he said.
Osidi emphasised the urgent need for the bank’s recapitalisation, noting that its current capital base of N2.5 bn is grossly inadequate to meet its mandate effectively.
“A grossly inadequate capital of N2.5bn hinders the capacity of the bank to perform optimally. Accordingly, we made it a top priority to pursue the recapitalisation of the bank through the injection of N500bn fresh capital. Out of this, N250bn is to be injected by the Federal Government, while we will raise the balance through debt capital,” he added.
Providing insight into the bank’s financial performance, Osidi disclosed that FMBN’s National Housing Fund contributions grew by N3bn in 2024, reaching a total of N103bn compared to N100bn in 2023.
“This increase in NHF contributions demonstrates renewed trust and participation in the NHF scheme by Nigerian workers,” he noted.
He also highlighted the return of Kano State civil servants to the NHF scheme after 24 years, which is expected to boost collections in 2025.
He further stated that a total sum of N71.5bn in loans was approved in the past year, compared to N39.7bn in 2023. The bank also refunded N14.4bn to 44,333 beneficiaries, an increase from N13.2bn refunded to 40,426 beneficiaries in the previous year.
Osidi revealed that the bank is playing a key role in the Renewed Hope Housing Programme of President Bola Ahmed Tinubu, providing a N100bn off-takers’ guarantee for housing projects nationwide.
“In addition to this, we are also providing direct funding of N19.9bn for the project in Karsana, Abuja, as well as a N27bn facility for the Renewed Housing Project in Ibeju Lekki, Lagos,” he said.
To improve operational efficiency, Osidi announced that the bank has made significant progress in deploying a core banking application, which had been delayed for years.
“Today, I am delighted to announce that the majority of our transactions are now being conducted under the CBA. Accordingly, we will be closing out the implementation of the application by March 31st, 2025, and entering the maintenance phase, which will last for six months from April to September 2025,” he said.
Addressing the challenge of non-performing loans, Osidi noted that the bank has recovered N10.9bn in bad loans through recovery teams, in addition to N3.1bn from normal recovery activities in 2024.
“It is an open secret that this great institution is heavily weighed down by NPLs. This is due mainly to the quality of credit that the bank used to book. Accordingly, when we came on board, we chose to challenge the status quo and do things differently. We introduced stricter loan appraisal processes to improve credit quality, reduce loan defaults, and enhance recovery mechanisms,” he stated.
He also disclosed that the FMBN has made progress in clearing a backlog of six years of unaudited financial statements from 2018 to 2023.
“One of the significant milestones we have achieved is the approval of most of the bank’s backlog of annual accounts. Thanks to our constructive engagements and collaborative efforts, the 2018, 2019, 2020, and 2021 accounts have now been approved by the CBN. This was achieved within nine months of our assumption of office,” he posited.
Osidi emphasised the bank’s strategic partnerships and collaborations to enhance affordable housing delivery, including a potential Memorandum of Understanding with Shelter Afrique Development Bank to finance student hostel accommodation schemes.
“We are also participating actively in key housing finance conferences and summits to showcase the bank’s leadership in affordable housing finance,” he added.
He reaffirmed FMBN’s commitment to financial sustainability, transparency, and service excellence.
“These achievements underscore our commitment to ensuring that FMBN remains a financially viable institution, capable of fulfilling its mandate of driving affordable homeownership in Nigeria,” he concluded.