FBN Mortgages’ business focus hinged on competitive, quality services delivery

In a crowded and oligopolistic environment which defines the Nigerian primary mortgage industry, only a few operators stand out and such operators achieve this by creating competitive and quality business models and services that are customer-focused.

One of those few operators is FBN Mortgages Limited, a wholly owned subsidiary of First Bank of Nigeria which prides itself as a leader in the mortgage banking subsector of the financial services sector with a special focus on mortgage lending business tailored towards providing integrated mortgage services.

As a primary mortgage bank (PMB), its business activities include accepting mortgage-focused deposits, funds management and provision of outright purchase mortgage loan, construction finance, equity release and mortgage refinancing.

These business activities are targeted at a mix of high-end to middle class income earners as well as carefully screened and qualified self-employed customers and, according to its officials,  these customer-classes represent about 60 percent–70 percent of the Nigerian population and provide enormous opportunities for the bank.

“Prior to the recent directive to PMBs from the Central Bank of Nigeria (CBN) on divestment from real estate development, FBN Mortgages as a leading mortgage bank, had delivered a number of triple A housing developments in major cities in Nigeria including Lagos, Abuja and Port Harcourt. These were done in the highest quality manner”, Adenrele Oni, the bank’s MD/CEO, disclosed to BusinessDay.

Oni said that  the bank had on offer a good number of products and services grouped into two risk assets and saving, and deposit products, pointing out that, over the years, he reveals, their business focus had been to deliver competitive quality services to customers.

“Our focus is also to help our target market achieve their dreams of owning their homes; our aspiration is to continue to be the preferred mortgage solution provider in Nigeria and to achieve this, we understand the need to provide tailor-made services that continually meet and exceed clients’ needs”, he added.

According to the CEO, it was the vision of the bank to be the preferred mortgage provider in Nigeria through quality service delivery, while its focus was to continuously deliver top-notch, excellent customer service as they build on their service parameters  which include ensuring that their services were customer focused and customers’ needs specific.

Consistent with this vision, the bank has fashioned out a number of products including Children Savings Account (CSA); Home Ownership Mortgage Account (HOMA); Mortgage Plan Savings Account (MPSA), and Mortgage Flexi Savings Account (MOFLESA).

Oni explained that the Children Savings Account (CSA) enables parents/guardians to plan and save for their children’s future from ages 0-18 years for the attainment of medium and long term goals, pointing out that “the account  has interesting features including a base interest rate plus 2.5 percent  per annum payable quarterly;  the  parent or guardian is not expected to withdraw more than twice a quarter, and the account automatically converts to child mortgage plan savings account at age 18”.

Other features of the account include a minimum opening balance of N5, 000; minimum balance on account is N5, 000; minimum monthly deposit is  N10, 000;  there are concessionary waivers on certain charges where a parent wants to access mortgage after two years of consistent minimum deposit with a balance of N500, 000;  only one withdrawal is allowed per quarter otherwise interest will be forfeited,  and there is a welcome gift for the child such as pens, towels, pencil set, lunch bag etc.

On HOMA, Oni also explained that it was an interest earning account with mortgage loan tenor up to 15 years, adding that  the account’s other features included equity contribution reduction for self-employed customers from 30 percent to 25 percent; equity contribution reduction for paid employment customers from 20 percent  to 15 percent; 1 percent  less the prevailing lending rate.

This product comes in three categories each named after the unique parts of an elephant (which is the emblem of the FirstBank Group). These, Oni said, were the elephant’s unique  parts such as HOMA ‘TUSK’ – the premium account in which the customer makes a minimum monthly deposit of N150, 000 for six months.

The second is the HOMA ‘TRUNK’ – the median account which allows the customer  make a minimum monthly deposit of N100, 000 for 9 months, while the third is HOMA ‘TUFT’ – the basic account  in which the customer  makes a minimum monthly deposit of N50, 000 for 12 months. Any withdrawal within the initial deposit period account falls back to the base interest.

Continuing, Oni said that in their Mortgage Plan Savings Account (MPSA), “there is base interest rate plus 3 percent per annum; minimum opening balance of N20, 000;  minimum monthly deposit of N10, 000;  third party cheques  are allowed;  it has easier opportunity to access mortgage loan;  it allows one  reference for account opening rather than two;  the customer is not expected to withdraw within the first six months, and the customer enjoys  an instant gift upon opening the account.

Mortgage Flexi Savings Account (MOFLESA), according to him, is a savings account with the features of a current account, adding that  the  account  operates with a base interest rate plus 1 percent  per annum; minimum opening balance of N50, 000; minimum monthly deposit of N10, 000;  third party cheques  are allowed,  personalized cheques  are allowed;  it has easier access to personal and mortgage loans; there is no Commission on Turnover (COT);  it requires only one reference for account opening,   and promises an instant gift upon opening the account.

Taking a long and critical view of their operation, Oni says in 2015 and beyond, their business activities will be powered by improved IT to achieve set objectives whilst delivering seamless and efficient services both in the short and long term.

“We have deployed the most recent version of the banking solution FINNACLE with a view to positioning FBN Mortgages to rule the market in the delivery of efficient services and effective loan management structure”, he assures both existing and intending customers.

CHUKA UROKO