Africa’s leading rating agency, Global Credit Ratings (GCR) Co (Pty) Ltd, has affirmed the Nigeria Mortgage Refinance Company (NMRC) Plc’s national scale long-term and short-term ratings of AA+ (NG) and A1+(NG). In addition, GCR affirmed NMRC’s Series 1, Series 2, and Series 3 Bonds national scale long-term issue ratings of AAA (NG) with the rating outlook assessed to be stable. According to GCR, the rating reflects NMRC’s market position as the only mortgage refinance company in Nigeria with minimal risk exposures, strong capitalization, and a robust liquidity profile. The rating firm’s analysis shows that NMRC’s capital adequacy ratio sits well above the 10% regulatory minimum, registering at over 50%, thus providing strong legroom for risk asset growth and loss absorption. NMRC’s earnings were noted to be solid, supported by earnings from sovereign bonds which accounted for about 70% of interest income while mortgage refinanced loans accounted for 26%. It also noted that NMRC’s costs are well controlled, with a cost-to-income ratio of about 35%. The risk position of the company is sound as the loan book accounted for around 25% of total assets at the end of 2021, with no credit losses or impaired loans from inception till date, evidencing the company’s stringent underwriting criteria.
“Moving forward, we expect the projected expansion in the refinancing portfolio to gradually moderate NMRC’s capitalization ratios, albeit with minimal likelihood of sharp capital erosion given the strong buffers and minimal risk exposures,” GCR stated. “We also expect additional bond issuances to augment the funding base, improve earnings and enhance mortgage refinancing,” the rating firm added. In his reaction to the development, the Managing Director/Chief Executive Officer of NMRC, Mr. Kehinde Ogundimu, said GCR’s affirmation of its credit ratings validates investor confidence in the operations of the NMRC. “We are very pleased at the affirmation of our credit ratings by GCR. This reflects our nimble and savvy approach to managing the company’s operations in a tough operating environment. Our goal remains to ensure that we do our job in a way that delivers on our mandate and protects the interests of our investors” he said. Mr. Ogundimu noted that NMRC would continue to uphold global standards of transparency and accountability in the conduct of its business as it strives to provide liquidity, affordability, and stability to Nigeria’s housing market.
About NMRC
NMRC is a CBN-licensed mortgage liquidity facility with the core mandate of developing the primary and secondary mortgage markets. NMRC raises long-term funds from the capital market for mortgage refinancing and promotes affordable housing development and home ownership in Nigeria. NMRC was incorporated on 24th June 2013 and obtained its final license to operate as a non-deposit-taking financial institution from the CBN on 18th February 2015.
