NBS gears to erect $700M building in city
…moving to reduce mortgage interests
The sod was finally turned yesterday for the construction of the new head office of the New Building Society Limited (NBS). It will be erected directly opposite the St. George’s Cathedral at the corner of North Road and Avenue of the Republic.
At the sod turning ceremony yesterday, it was revealed that the cost of the structure will be approximately $700 million. The land was purchased in 2004 at a cost of some $141 million.
Chairman of NBS, Dr. Nanda Kishore Gopaul, said that the new building is badly needed, since the rapid growth of the society has increased the need for more staff, storage capacity, and space in the banking hall, along with parking facilities.
According to Dr. Gopaul, the constraints in these areas influenced the directors in deciding to build a new chief office building.
The new structure, he said, will better serve the Society’s members in a more spacious environment, and will consist of a four-storey state-of-the-art building that will include the use of sun-glazed glass and elevator.
Construction will take approximately 60 weeks, and will be executed by BK International.
Dr. Gopaul added that NBS has grown over the last decade, amassing total assets of $35.8 billion as of December 31, 2008. As a result of this, he said, NBS is now the third largest financial institution in the country.
He noted that, as of the end of 2008, the mortgage portfolio of the NBS was $19 billion, which now makes the entity the largest mortgage provider in the country.
“We were also able to disburse in excess of $3.8 billion in new advances to home owners, a sum that represents the largest amount of disbursement in any one year. Over the last six years, NBS was able to double its mortgage portfolio throughout the country, and was also able to reduce our mortgage rates further.”
As a consequence of approval from the Ministry of Finance, ordinary mortgage rates will now be reduced from 7.5 percent to 6.95 percent, while low income mortgage rates would be reduced from 5.5 percent to 4.95 percent.
This, Gopaul said, was made possible through the Government increasing the lending ceiling from a maximum of $8 million to $12 million.
Total deposit to date stands at $30.5 billion, and is approximately 85 percent of total liabilities and reserves.
According to the NBS Chairman, reserves have grown, are just under $5 billion, and are among the highest for financial institutions.
Meanwhile, Director of NBS, Ahmad Khan, told the gathering that, over the years, the society has exhibited good corporate citizenship, by giving to communities and organizations for the benefit of the less fortunate.
“The successful completion of this facility will mark a major milestone in the development of our financial sector. More significantly, the dedication of this new chief office is a symbol of our continued commitment to supporting efforts to reduce poverty and promote economic development in Guyana,” he said.
Delivering the feature address at the ceremony, President Bharrat Jagdeo noted that the NBS has played a very important role in the housing sector in Guyana.
He pointed out that the investment has been made at a time when there is tremendous turmoil in the world, as he referred to the global financial crisis.
“There is tremendous conservatism in investment, particularly in the most advanced economies of the world, because although there is a crisis, Guyana is seeing an expansion in the financial sector… and a substantial amount of money is being spent on capital expansion.”
He added that there is a need to recognize the stability in the sector, and that the strong regulations are needed to protect depositors and investors.
He noted that Guyana has also been criticized for being too conservative on the regulatory side.
“So this is testimony, largely to the state of the financial sector in Guyana; and sometimes we don’t recognize these things, and we need to some more. There was a time when many people had their money overseas; many had very little confidence in either financial papers issued here or the banking system. Much of our reserves were held in the developed world, largely because these were safe jurisdictions in which we could invest our money, and the crisis has proven that it is the regional jurisdiction, including Guyana, that is the safest place to have your money in today,” the Head of State said.