Economy

Omoluabi Mortgage Bank Should Recapitalize To N5billion-Bolorunduro

Published

8 years ago

August 15, 2016

The immediate past Chairman of Omoluabi Mortagage Bank Plc, Dr Wale Bolorunduro has charged the new management of the Bank to strive to increase its N2.5b minimum capital base, to 5billion soonest as to meet the Central Bank Future plans .

Bolorunduro gave this charge at the Second Annual General Meeting of the Bank held in Osogbo, on Thursday, August 11, 2016 where he bowed out as the Chairman of the Bank and was succeeded by the former Chairman of Oodua Investments Company, Mr. Adebayo Jimoh

The former Commissioner for Finance, Budget and Economic Planning in Osun State while giving the charge said that the Bank does not have to wait until the regulatory apex Bank, the Central Bank of Nigeria (CBN) gives a directive to that effect, saying this would not make the Bank vulnerable to any shock if the CBN eventually directs so.

He noted that banking is a serious business and the utmost trust that can be trusted in someone’s hand, saying it was in this light, that he nurtured the Living Spring Mortgage bank from a private to controlled publicly quoted company.

Dr Bolurunduro further explained that tt was no longer a private company but now carrying public trust regulated by Securities Exchange Commission and Central Bank of Nigeria.

According to Dr Bolorunduro, “in 2011, balance sheet of the bank stood at 1.0b Naira but the bank came under serious existence challenge, when CBN asked all the mortgage banks to recapitalize to 2.5b minimum capital base. The owner then, Osun state government was already facing its own fiscal challenge as a result of dwindling revenues from federation account and so it couldn’t help much.”

He added that the board members cooperated with him to face the challenge and approach capital market to raise capital of 1.6b Naira, adding that it was excruciatingly demanding because the capital market has not recovered then, from the financial meltdown of 2008 and 2009.Thanking all the stakeholders, especially the Board members, Dr Bolorunduro noted that about 20 other mortgage outfits were facing critical challenges just as he said, “today, Omoluabi Morgage bank is CBN compliance in term of liquidity, capital adequacy and other key litmus parameter. It is now publicly quoted with ownership of the state government diluted to about 40 percent.”

The outgoing Chairman said the challenge for this bank, is how to manage the legacies problem on its ownership.

“It is now publicly quoted, the federal government has mandated all states to divest from private companies as conditions for financial supports and to follow global best practice on fiscal responsibility. So divestment has come to stay.”

He said further that” how do you manage stakeholders, who now include diverse owners, capital market regulators, investors, who want good returns and government, who still thinks the assets of the bank belongs to the state and the public, whose trust you carry as a bank and your obligation as a financial catalyst for socio economic development.