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Origination Overview Presentation June 2010

Origination Overview Presentation June 2010. oobarometer Analysis:. Origination Overview:. Application volumes for May showed a year-on-year increase of 35%.

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Origination Overview Presentation June 2010

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  1. Origination Overview Presentation June 2010

  2. oobarometer Analysis:

  3. Origination Overview: • Application volumes for May showed a year-on-year increase of 35%. • Granted bond conversion ratios are still lower year-on-year but this should trend stronger as banks continue to relax their lending criteria and economic conditions improve. • Bank decline ratios are still marginally higher year-on-year but have shown a month-on-month improvement. • Ratio of applications declined by one bank, granted by another is trending at a lower ratio predominantly due to the stricter credit criteria banks are imposing on 100% bonds.

  4. Origination Overview: (Continued) • Banks are continuing to relax their credit policies and deposit requirements and are now once again offering 100% bonds. • Number of buyers purchasing property with a 100% bond requirement has more than doubled since September 09. • Banks are adopting a cautious approach to approving 100% bonds by applying stricter credit criteria. Only 31% of 100% bond applications are approved and 49% of these approvals are subject to deposits. • Applications with deposits are securing higher approval rates than 100% bond applications. • 91% of ooba applications are granted within 5 days of submission.

  5. Bank Loan to Value Criteria:

  6. Bank Loan to Value Criteria:

  7. Affordable Lending Guide-Lines By Bank:

  8. Banks appetite for lending is gradually recovering and increased competitiveness for homeloan business amongst banks is becoming evident. Bank approval rates are still inhibited by consumers’ high debt to income ratio and impaired credit records. Although average homeloan interest rate concessions are still lower year on year, there is evidence that banks are starting to compete on pricing. Banks are recording a slower growth in the number of non-performing loans. Property market is gearing itself for a gradual recovery during 2010, already evidenced in the consistent house price growth recorded in the house price indices released by the banks and ooba for May 2010. Credit Market Conditions: Credit Market Conditions:

  9. Application Loan to Value Analysis

  10. Bonds Approval Analysis: 100% LTV • Only 31% of 100% bonds submitted are approved.

  11. Bond Approval Analysis: 80% - <90% LTV • 50% of 80% - <90% LTV bonds submitted are approved.

  12. Absa Overview: • Currently declining 45% of applications submitted • 14% of applications declined by Absa are granted by another bank/s • 92% of loans submitted to Absa are granted within 5 days • May’s results reflect that ABSA’s pricing has improved marginally

  13. Nedbank Overview: • Currently declining 57% of applications submitted • 19% of applications declined by Nedbank are granted by another bank/s • 95% of loans submitted to Nedbank are granted within 5 days • May’s results indicate that Nedbank’s pricing has improved marginally

  14. FNB Overview: • Currently declining 57% of applications submitted • 15% of applications declined by FNB are granted by another bank/s • 94% of loans submitted to FNB are granted within 5 days • May’s results reflect that FNB have continued to offer the most competitive rates in the market

  15. General: • Bank’s are focusing on: • Bad Debt Limitation • Cost of Funding • Profitability • Quality of Applications • Reducing NTU’s • Processing Costs efficiencies • Fraud Prevention • Streamling Bond Conveyancing Panels

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