In the Directors’ statement published in yesterday’s edition of the dailies, the Society said that the profit was 42% above the highest it had ever achieved which was in 2006. Further, the results came in the backdrop of a reduction of the mortgage interest rates from 7.5% to 6.95% and from 5.5% to 4.95% for low income mortgages. These cuts came while the NBS maintained its savings rates to members as high as 4.5% per annum.
The profit figure was also helped by a slide in the operating expense from $610m in 2008 to $450m in 2009. Other income also rose significantly from $16.1m in 2008 to $49.1m in 2009.
“The housing drive at the national level generated a huge mortgage market…We have been pioneers in offering low rates of interest for mortgages to the point where we have been inundated with applications”, the directors said. This, they noted, propelled the government to confer tax-free incentives similar to those offered by the NBS to all other financial institutions. “This we emphasise is a commendable move by the government since no one financial institution can satisfy the growing mortgage market”, the statement said.
The mortgage market is thought to be mainly driven by the government’s low-income housing drive which is underpinned by the distribution of thousands of house lots.
The Directors noted that total mortgages processed for 2009 amounted to $3.92b compared to $3.87b in 2008. The mortgage portfolio rose by $1.8B over the previous year and totalled $20.9b at the end of last year.
Investments declined slightly from $11.2b in 2008 to $11b in 2009.
NBS said that its liquidity of $12.9b was 34% of total assets or 40% of investors’ funds. Combined with reserves the respective ratios were 48% and 57%.
“The Society is currently holding nearly $13b in liquid assets, and continues to disburse loans to the borrowing public in this new competitive environment”, the statement said, adding, “We therefore wish to advise our members to ignore continuous rumours being peddled by mischief makers who seek to bring disrepute to the Society, create panic and alarm by making unsound and uniformed statements against the Society”.
The NBS is building a $700M state-of-the-art headquarters. The sod-turning ceremony was held in January last year.
