6 February 2013

Nigeria: Resort Savings to Float N3.5 Billion Hybrid Offer

Resort Savings and Loans (RSL) Plc has concluded plans to raise N3.5 billion from the stock market next month through a combination of Rights and Public offerings, subject to the approval of regulatory authorities.

Managing Director/Chief Executive, RSL, Mr. Abimbola Olayinka, disclosed this at a media interactive session, Monday, in Lagos. He said the move is aimed at repositioning the bank ahead of the April 30, 2013 deadline given by the Central Bank of Nigeria (CBN) for primary mortgage banks (PMBs) in Nigeria to recapitalise to N5 billion for National PMBs and N2.5 billion for State PMBs.

Olayinka said as soon as the necessary approvals are given by the regulatory authorities, the bank hopes to raise N1.7 billion via Rights Issue, and N1.9 billion through public offering. He noted that the bank is presently among the top ten PMBs in the country, but targeting to be among the top five in the nearest future.

He also noted that the bank had made giant strides of recent, with 13 branches and offices nationwide, cutting across several states. "We have been able to grow from one single branch to 13 branches and cash offices nationwide - 5 in Lagos, 2 Abuja, 1 Jalingo, 1 Yola 1 in PH, 1 in Ekiti and 1 in Abeokuta, and all of them are networked and online 24/7."

He announced that the bank has grown its deposit base to N2 billion, from a deposit liability of N480 million in 2009. "In line with its new financial health and vitality, the mortgage bank is now bouncing back to profitability, recording a N107m unaudited profit for the third quarter ending September 2012, after the necessary provision on account has been made.

"Bringing the bank to this healthy state is a task that tried the expertise and managerial skills of the management team following the challenges the bank was confronted with up till 2009 when it recorded a deposit liability of N480m and had many debtors to contend with.

"The bank is also currently collaborating with the Lagos State Government in the development of over 120 hectares of land in different locations, while it is also working with the Federal Road Safety Corps, to develop and provide mortgages for a minimum of 400 officers in Ekiti State," he stated.

Olayinka, who is also the President of Mortgage Banking Association of Nigeria (MBAN), said the liquidity facility company being jointly set up MBAN, World Bank, IFC and Federal Ministry of Finance, to be called Nigerian Mortgage Company, is expected to take off in the last quarter of this year with a capitalisation of N20 billion. He noted that the company which will be floated on the Nigerian Stock Exchange (NSE) will help to deepen the mortgage sector in the nation's economy.

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