About a year after he was convicted and subsequently deported to Ghana for illegally trading away the whopping sum of $2.3 billion, Kweku Adoboli said he has a plan to start what he described as Ghana’s “mortgage-backed bond market”.
The 39-year old former stock trader at UBS Group AG disclosed this during a rare interview with Bloomberg. According to him, part of his plan with the new platform is to help Ghana to avert a housing crisis in the future when the country’s population is expected to increase.
“Our job now is to look for ways to expand banks’ balance sheet, to create a mortgage market that would allow us to increase demand-side funding for housing… What are you going to do in 30 years time when our population doubles?”
Interesting estimates: According to Adoboli, the platform he is setting up has the potential to accumulate about “$100 million in mortgage-backed securities” in just one year after it commences. He said banks could be asked to join as shareholders.
The former UBS Group employee is reportedly confident in the workability of his plan. He told Bloomberg that a feasibility study conducted by him and his unnamed business partners discovered that some 2.5 million Ghanaian households have the capacity to afford a $50,000 home loan.
Packaging mortgages into securities and selling the same to investors could also enable banks to concentrate on the important task lending to the real sector of the Ghanaian economy.
In the meantime, the journey may not be all smooth for the University of Nottingham graduate who admitted to suffering depression after being deported to Ghana by UK authorities.
One of the immediate challenges he could face with the new venture is the issue of acceptability. Much like Nigeria, the mortgage is usually not the first option for most homeowners. Bloomberg rightly noted that many of the homeowners in the West African country prefer to buy their own lands and build their homes slowly over time.
Ghana’s capital markets are also relatively new and may not have the same structural capacities, which Adoboli is used to working within the UK. For Ghanaian banks that have just recently come out of a banking crisis, interest rates have been described as high. All these are challenges that could impede on Adoboli’s plan.
To catch up on Adoboli’s story and how he went from a UK top banker to an unusual entrepreneur in Ghana, check out our archives here.