THE Federal Mortgage Bank has been in financial mess for many years, Allegations of corruption, mounting losses and mismanagement have long plagued the state-owned bank.

The bank was set up to provide long-term credit facilities to mortgage institutions in Nigeria, promote the growth of viable primary and secondary mortgage institutions to service the need of housing delivery in all parts of Nigeria, while mobilising both domestic and offshore funds into the housing sector.

The bank’s mandate also includes linking the capital market with the housing industry, establishing and operating a viable secondary mortgage market, as well as collecting and administering the National Housing Fund (NHF) in accordance with the provisions of the NHF Act. But attention has focused more on the bank’s failures than its wins.

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A 2018 report of the Office of the Auditor General of the Federation indicted the bank for non–execution of a N14.2 billion housing estate project for which fund was released.

Mr Ahmed Dangiwa

The Auditor-General stated that contract for the building of Legacy Estate was awarded at a cost of N10 billion but N14. 2 billion was disbursed to the contractor between November 22, 2012 and April 29, 2013, leaving a balance of of N4.2 billion as overpayment.

The nation’s chief auditor had said, “Audit observed that the Bank awarded a contract for the construction of 963 units of residential building called Legacy Estate, with all the facilities and services of a modern urban setting at a contract price of N10,000,000,000.00.

“However, a total of N 14,281,749,370.71 was disbursed to the contractor between 22nd November 2012 and 29th April 2013, thereby resulting in an overpayment of N4,281,749,370.71.”

The Auditor-General said no reason was provided for the additional payment, and there was no evidence of contract variation presented for audit.

“Audit further observed, from physical inspection of the site on 7th July 2017, that the project had been abandoned since 2014, some months after payments were made, with less than 10 percent of work done.”

In the 2022 financial year, the Federal Mortgage Bank accumulated losses totalling N402.061 billion, putting its going concern at risk. The reason for this is that the bank was setting aside more money to cover for expected losses from loans that might not be fully repaid.

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In financial terms, the bank had rising impairment allowance on loans and receivables amounting to N121.186 billion. This development was highlighted in the 2022 Auditor-General’s Report, which noted that the bank had a negative net assets of N111.131 billion.

“The negative net assets reported by FMBN is an indication that during the year under review, the Bank owed more than it owned, a major signal of insolvency and bankruptcy,” the nation’s chief auditor said.

“The sum of N190,287,411,862 was reported as losses during the year under review. This was aggravated by additional regulatory provision resulting from toxic assets provoked by the CBN’s routine supervision.”

“During the year 2022, contributors’ funds in respect of National Housing Fund depleted by N99,541,743,821, and the NHF contribution and total assets of the bank as at December 31, 2022 stood at N602, 211,510,728 and N502,669, 766, 905 respectively. This is a red flag highlighting the fact that the Bank’s assets would not cover payment of NHF contributions if it goes into liquidation for any reason.”

The Auditor-General also indicted the bank in 2022 for an unusual 19 percent decline in the operating income from N21.795 billion to N19.598 billion. The surprising thing about this is that the management of the bank did not provide any explanation for the decline, prompting the Auditor-General to recommend sanctions if the bank did not justify the decline to the National Assembly comittees on public accounts.

The nation’s chief auditor also accused the bank of irregularities in N436.106 million loan granted to a cooperative society. The organisation neither provided any bank guarantee nor valid collateral before securing the loan from Federal Mortgage Bank. Worse still, the cooperative group only had total assets of N7.620 million and net assets of N5.384 million, yet it was able to access N446.106 million from the bank despite a clear lack of financial capacity.

This happened in 2020 while Mr Ahmed Musa Dangiwa was the managing director. Mr Dangiwa was the bank’s managing director from 2015 to April 2022. In 2023, he bacame Nigeria’s Minister of Housing and Urban Development. He was succeeded by Mr Adeniyi Yaboyaju, who served only on acting capacity before handing over to Mr Shehu Usma Osidi, the current MD.

In 2024, the Federal Mortgage Bank posted an operational surplus of N11.5 billion for the 2024 financial year—the first in over 30 years. But its MD, Mr Osidi, acknowledged the challenge of high non-performing loans (NPLs) inherited from the previous administrion – which was ran by Mr Dangiwa.

The bank also reported a total of N13 billion in operational surplus in the first half (H1) of 2025. But Mr Osidi highlighted the usual red flag of provisioning – money set aside to cover an unpaid obligation.

“At the time, I announced a half-year surplus of N4.9 billion, the first in the history of the Bank. However, by the end of the year 2024, that surplus grew to N11.9 billion.

“Following that trend, by the half-year management account for 2025, we have made over N13 billion as surplus. Though these figures may be largely eroded eventually by provisioning, the trajectory shows that we are on the right track to chart a new course for FMBN,” Mr Osidi said.