Ex-UBS dealer Kweku Adoboli is now trying it in Ghana
The trader Kweku Adoboli became famous for giving UBS a billion dollar loss. Now he is aiming for a comeback in Ghana.
Kweku Adoboli, the former UBS Group AG trader, had been fighting a deportation from the UK to his native country after he was convicted of losing $ 2.3 billion to the Swiss bank. Now he's aiming to make a comeback in Ghana with a plan to boost the mortgage-backed bond market there.
The 39-year-old was extradited to the West African country in November 2018 after being detained in 2012. The first nine months he spent mostly indoors as he struggled with depression. The support of family and friends helped him to give up the desire to return to England, where he had lived since he was 12 years old. He finally managed to make peace with a new life in Tema, a port city east of the capital Accra.
Today Adoboli speaks - albeit with a British accent - as if he had never set foot from Ghana when he talked about the gaps in the country's mortgage financing market.
"Our job is now to find ways to expand banks' balance sheets and create a mortgage market that allows us to increase demand-side housing finance," said Adoboli during a Bloomberg interview in a lounge area Five star hotels in Accra. "What will we do in 30 years if our population doubles?"
The former banker, who left Ghana at the age of four, was convicted of covering up failed bets in a market sell-off in July and August 2011. Adoboli served around half of a seven-year prison sentence for the business and was released from prison in 2015. The case had made waves at UBS in Zurich and at the London financial center.
Small market
Adoboli estimates that the platform he plans to develop could include $ 100 million in mortgage-backed securities after the first year of operation. The banks would also be offered to join as shareholders, he said.
It won't be easy. Ghana has low mortgage lending, nascent capital markets, high interest rates and a banking sector that has just left a crisis behind. Most people buy their land with their savings and then slowly build their house, often until they retire without ever taking out a mortgage.
The government estimates that the country, where 30 million people live, lacks two million homes. Given an average economic growth of 7 percent in the past three years, the middle class is increasing. According to World Data Lab, about 9 million Ghanaians earn more than $ 11 a day. That number could increase to 14 million by 2030.
Adoboli is confident that it is possible. A study he and his business partners conducted showed that 2.5 million households can afford a $ 50,000 home loan, he said. However, he did not want to give the names of his business partners.
By bundling existing and new mortgages into securities that are then sold to investors, banks could be relieved to boost lending and expand the market.
Rapid growth
The value of home loans rose by almost 10 percent to 4.5 billion cedi (720 million euros) in the nine months to September. This is less than 1 percent of mortgages in South Africa, a five times larger economy and an active securitization market, data collected by Bloomberg shows
Adoboli is trying to raise $ 6 million from investors. This is intended to finance the company's accreditation, licensing and software for the creation of a mortgage syndication platform. He plans to open the company at a financial conference in Ghana in May.
"The long-term goal is to create a sustainable platform that allows the economy to grow," said Adoboli.