Archive for June, 2009
FNB cuts prime lending rate to 10.5%
14 April 2005
First National Bank (FNB) today announced the reduction of its prime lending rate by 0.5% from 11.0% to 10.5%. The new rate will take effect on Monday 18 April 2005 on all prime rate linked products.
Interest rates for new and existing FNB HomeLoans will also be reduced by 0.5% on Monday 18 April.
“The cut is a vote of confidence in our stability and growth sustainability,” says FNB CEO Michael Jordaan. “It is good news for all South Africans. Rates were last at these levels in February 1981 when prime was 10.75%, exactly 24 years ago. Prior to this, the all-time low was 10% in July 1974.”
“Unlike the volatile boom-and-crash conditions of the mid-70’s and early 80’s, the economy has now entered a golden era of low inflation with sustained growth and new jobs,” adds Jordaan.
The bank noted that consumers remained disciplined when taking credit for purchases and that while credit use had increased during the past 12 months, indebtedness remained at moderate levels.
“Lower inflation means lower annual salary adjustments and an effective increase in the real rate of interest. We are seeing maturity in consumer’s borrowing decisions,” says Jordaan.
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Nedbank Home Loans Announces A Restructuring
18 May 2005
The extensive restructuring and the re-establishment of a dedicated Nedbank Home Loan business unit has resulted in a marked decline in the bank’s loss of home loan market share compared to that of five months ago.
“The dissolution of Nedbank’s dedicated home loan unit some years ago blurred the bank’s focus on cost structures and service support levels around home loans,” says June Tudhope, Nedbank Home Loans managing director, who took over the newly created division last October.
The creation of a stand-alone division to drive the strategy around the entire home loan process, from point of sale to that of registration, testifies to Nedbank’s commitment to home loans. A newly created executive management team of seven and workforce of 939 is also evident of the directors’ pledge for the bank to cater for all people.
In the past, poor service levels, cumbersome and slow internal processing, particularly of valuations and automated credit assessments had allowed other banks with more advanced technology, faster processing, and quicker approval times, to take the lead. Mark Danckwerts, Process divisional general manager, and Eugene Drotskie, Operations divisional general manager, have been tasked to place the bank among the forerunners in this strongly competitive arena.
Nedbank Home Loans’ credit and risk profiling is now being reviewed to align this with the bank’s market profile and Pieter van Heerden, Value Analytics divisional general manager, has been tasked with this responsibility.
To address staff challenges associated with the division’s restructuring, Diana Musara has been appointed Strategy, People, and Projects divisional general manager. Nedbank Home Loans believes that building a motivated team with a sound strategy implemented through effectively managed projects, can only improve service levels and assist with market share growth.
In addition, Nedbank’s complete range of home loan products has also been carefully assessed against those of its competitors with acceptable results. Nedbank Home Loans is now focussing on the affordable housing market, equity release products and the fine-tuning of some existing products. Lindiwe Mbongwe (nee Kubeka), Innovation and Development divisional general manager, has been tasked with addressing these areas of focus.
Greg Salter, Home Loans chief financial officer, will be keeping a close eye on the division’s financial performance and will be providing the management information to enable the team to track progress, and ensure that Home Loans’ strategic imperatives are implemented.
According to Tudhope, lending volumes from the buy-to-let home loan - another market first by Nedbank - slowed in the first quarter, which is an indication of the growing risk involved in this market. Other first quarter trends include a lowering in Nedbank’s average size of loan in the upper and affordable housing markets.
“Although 60 percent of the bank’s home loan business is being sourced through mortgage origination channels we are contemplating reinstating Nedbank’s direct distribution channels to estate agents and developers,” Tudhope continues. “This is in line with the current industry balance of about 30 percent of all home loans being directly sourced from these two channels.”
Given the current momentum of the division, Tudhope’s team is cautiously optimistic of the division “turning the corner” by the third quarter and placing Nedbank Home Loans on an equal market footing with its competitors early next year.
Online Home Loan Application
As published on the Nedbank website
Standard Bank Helps SA Home Loans Take Securitisation Into New Territories
June 14, 2005
South African Home Loans* (SAHL) will soon be launching another exciting innovation for the South Africa securitisation market: the first listed residential mortgage warehousing conduit, the Thekwini Conduit, arranged by Standard Bank.
SAHL was the first South African mortgage originator to tap the public residential mortgage backed securitisation market when it launched Thekwini 1 in November 2001. Subsequently, SAHL has completed four further successful issues, constantly setting new market benchmarks in terms of both pricing and volumes.
The Thekwini Conduit, which has been sized at R15 billion and has been rated by Fitch Ratings, will provide SAHL with access to short-term money market funds, enabling it to diversify its warehousing funding and benefit from more competitive funding rates. SAHL will, however, continue with its long-term Thekwini programmes in parallel to the Thekwini Conduit, expecting to launch Thekwini 6 in the last quarter of this year.
“With the establishment of the Thekwini Conduit, SAHL will secure yet another source of sustainable funding to support the continuing growth we are experiencing in our home loan book. Furthermore, it provides us with an opportunity to respond to investor demand that we’ve identified in the short-term market. We have strong relationships with our investors and pride ourselves as being at the front-runner in bringing ground-breaking products to the market,” says Kevin Penwarden, SAHL’s Chief Executive Officer.
The Thekwini Conduit provides money market funds with an exciting new investment, backed by a diversified asset pool. AJ Rothman, Director of Securitisation at Standard Bank, the arrangers of the Thekwini Conduit said: “This transaction brings a number of new technologies to the South African securitisation market and demonstrates again just how sophisticated this sector of the South African capital market has become. We are unaware of this technology being utilised in any other country other than the United States.”
Some of the new features that the Thekwini Conduit introduces to the market are: a high degree of flexibility as the Thekwini Conduit is able to issue both long and short-term notes giving investors the opportunity to invest in notes rated F1+(zaf), F1(zaf), F2(zaf), A(zaf) or BBB(zaf). Further, the notes may be listed and/or unlisted depending on investor requirements. Innovatively, the Thekwini Conduit will also be the first to issue liquidity notes. This enables SAHL to further reduce its reliance on bank facilities.
SAHL intends issuing the first tranche of notes from the programme at the end of June 2005 through Standard Bank’s money market desk.
* Standard Bank is a shareholder in SA Home Loans.
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SARS Can Delay Your Property Transfer
June 22, 2005
According to an article on the Business Day Website, SARS will be able to delay the transfer of your property if your tax affairs are not in order.
The new regulation, that came into effect last month, will affect all taxpayer, from induviduals through to companies. Lindsay Williams asked Peter Frank, SARS Law Administrator, to explain about the new law and why it has been introduced.
Peter replied that the Deeds Office is going electronic soon and it was logical for them to go electronic as well - as far as transfer duty is concerned. They noticed that a large number of wealthy people bought properties without their tax affairs being in order.
What happens now is that when your transfer duty declaration comes in, SARS will check it against your tax record. If there are any problems, SARS will contact you and help you sort out any problems before the transfer can take place. Once the propblems are sorted out, the transfer will go through.
Read the complete article online at the BusinessDay website.
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Standard Bank ranked No.1 in sub-Saharan Africa
July 11, 2005
Standard Bank has been ranked No. 1 in sub-Saharan Africa in The Banker Top 1 000 World Banks 2005, an annual ranking of the world’s commercial banks.
Standard Bank is now ranked No. 108 in the world, up from 116 in 2004.
The rankings are based on Tier One capital as defined by Basel’s Bank for International Settlements. The definition is more strict than total stockholders’ equity and covers only the core of the bank’s strength; the shareholders’ equity available to cover actual or potential losses.
The object of the survey is to show the banks’ soundness in relation to the Basel requirement of minimum Tier 1 capital on risk-weighted assets of 4% and a minimum ratio of capital to risk-weighted assets of 8%.
The Banker (www.thebanker.com) is the global monthly banking magazine of the Financial Times Group and was first published in 1926.
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Is it worth it to fix your home loan for 20 years?
August 15, 2005
With SA Homeloans Varifix, you now have to option to fix your home loan for a period of 20 years. There are some important things to keep in mind before signing up for such a long term.
The current Varifix rate is set at about 12%, whereas SA Homeloans and most of the larger banks currently offer between 8.5% and 9.1% on variable loans. This means that if you do fix your rate, interest rates must increase by at least 3% before you will start to break even.
Taking the current economic situation into account, chances of interest rate climbing so much in the near future are slim, but nobody can predict what will happen in 10 or 20 years’ time. Keep in mind that inflation is relatively stable right now, so there is no immediate need to increase the current interest rate.
Keep in mind that if you were to simply increase your monthly repayment to the amount you will have to pay for the new Varifix product, you would have to pay almost R600.00 extra per month on a R300 000.00 bond. That would also mean that you could pay off your bond in only 12 years instead of 20. This would save you about 40% in interest charges during the 12 years (just above R140 000.00 on a R300 000.00 bond).
If you are the type of person who really prefers security, then this might be a great option. In the end, it is still up to you to decide what is best for you and what you are comfortable with.
To read more about Varifix, visit SA Homeloans at www.sahomeloans.co.za
If you would like to apply for a much lower variable interest rate, try SecuBond Mortgage Originators who will find you the best rate at the four leading banks.
Nedbank Launches New Products
Before Nedbank goes public with its new brand campaign, it is strategically launching a platform of new and unique product offerings, to differentiate the financial institution, including two new Affinity programmes.
Boniswa Pezisa, Net#work BBDO’s Deputy MD says: “Over the years Nedbank has championed affinity marketing, which has enabled its clients to contribute towards sports, arts and culture and the conservation of endangered wildlife.
“Nedbank has now unveiled a new affinity product - Children’s Affinity. Using the new Children’s Affinity credit card, debit card or cheque book results in Nedbank making a contribution to the Nelson Mandela Children’s Fund. ”
Some of the little people who will actually benefit from this philanthropic action are also the actors in the ‘Oliver Twist’ themed tv commercial.
Creative team Mariana O’Kelly and Gary du Toit say they wanted to move away from the previous inaccessible image of Nedbank to reveal a softer and kinder image to the country’s viewers.
The commercial was shot by Director Leigh Ogilvy from Frieze Films: “The kids immediately seem more empowered, less like victims. They’re not beggars but salesmen encouraging us to go shopping because it benefits them in the end.”
The second product offering is Nedbank’s The Eyethu Ownership Plan - Eyethu means ‘ours’. This enables customers, employees and business partners to own shares in a broad based BEE deal.
“The commercial uses the analogy of worker bees getting a share of the hive to explain what would normally have been a complex concept. The song - ‘come with me down paradise road’ - was used to further enhance the message that this is the broadest BEE deal to date,” says Pezisa.
Source: Bizcommunity
[04 Sep 2005 12:32]
FNB presents: ‘Loans of Our Lives’
Issued by: C-Cubed Communications
First National Bank (FNB) has followed its highly entertaining launch and awareness campaigns for the One Account with a tongue-in-cheek take on one of television’s most successful ’soapies’ - Days of Our Lives.
Developed by FNB’s marketing partner, FCB Johannesburg, the new One Account campaign is called ‘Loans of Our Lives’.
The brief put to FCB Johannesburg’s strategic team was to produce infomercials to explain the benefits of the product, launched 18 months ago, and demonstrate the relevant savings. A customer depositing his or her salary into the One Account and consolidating all his debt into a One Account, enables the customer to shave years off his loan and pay the combined debt off at one low rate.
Explaining the creative treatment, FCB South Africa group executive director, Ashley Bacon, said One Account has always had an ‘irreverent’ personality so there was an opportunity to push the envelope even further than usual.
“Once the ’soap opera big idea’ had been mooted and given the go ahead by the client, the FCB strategists and the account management teams, FCB Johannesburg’s creatives Ulric Charteris and Jean Roux Bezuidenhout developed the scripts,” he said.
“Briefly, information about the One Account is written into typical ’soapie’ scenarios and dialogue - a central character is used to ‘incidentally’ demonstrate the savings as the soap opera ’stars’ talk through their financial woes and are then - in true soap style - given advice. In one scene, the character appears as an artist in the park and his canvas becomes the medium on which the savings are calculated; in another he is a waiter but this time his menu board is used as the vehicle.
For example, a character called Minky says: ‘You have to pull yourself together, Lesley. For once listen to your mother, now I know that I’m not your real mother, and when your real mother was abducted by the Russian mafia after your father joined that religious sect I took you into my home and it wasn’t much of a childhood being raised as a girl till you were eighteen, but we only had sons and your stepfather would have died if I had told him the truth after all those years, but that’s the past’. Lesley responds: ‘Mum, I can’t seem to manage my finances’ to which Minky suggests: ‘Why don’t you just get a One Account?’. She goes on to explain, among other points, that ‘Now, with a One Account, because your income goes straight into your account you’ll save about R300 a month on interest. And if you keep that R300 in your account every month in total you’ll save about R80 000 over the term of your loan’. The central character is present in this scene as a waiter chalking up the savings on his menu board.
“As the information to be communicated is relatively technical in nature, Ulric and Jean had to strike a perfect balance between entertainment and education; to further enhance the ’soap opera’ concept, we cast ‘real-life’ soap stars in each commercial. I think the result is spot-on,” said Bacon.
The two commercials were shot in studio over three days by Red Pepper.
Full article available on Biz-community
To Buy or To Rent, That is the Question
Most financial advisors are agreed that it is wise to get into the property market as soon as possible in order to start paying off your own bond rather than pay rent and pay off someone else’s bond.
However the property boom in South Africa over the last few years, which has pushed house prices sky high, has made buying a home increasingly difficult for many first-time buyers. Angelo Haggiyannes, director of Auto & General Insurance, says that while it has always been relatively common for couples to pool their income and buy a property together, now friends are doing the same in order to be able to enter the property market.
He says, “First time buyers must be aware that buying a home has many hidden costs, insurance being one of them, along with legal fees, registration costs and even moving costs. The owner of a bonded house is legally obliged to get House owners’ Comprehensive Insurance, which covers the property as security for the home loan in the event of fire, flood or any other disaster that damages the structure and fixtures. In addition, whether you are buying or renting your home, household contents insurance is a must today. The risk of burglaries remains high and many uninsured victims of theft find themselves in real financial trouble and unable to get back on their feet after losing their household possessions.”
However, if you can easily afford your bond repayments and if you manage to pay off your bond quickly, your investment will become a true investment - hopefully paying great dividends. For one thing, owning a home, with no monthly bond repayments to cough up for, is the ideal situation for anyone.
The “To Rent” camp believes that renting can provide you with a more cost-effective option, particularly if you are young and need flexibility to travel or move around. Furthermore, buying in the area of your choice may be prohibitively expensive, so renting provides you with the option of living in your ideal choice of neighbourhood, until you can afford to buy in the area or one similar. Says Haggiyannes, “According to an article published on property24.com by Neville Schaefer, CEO of national property manager, Trafalgar, the rental market is continuing to develop worldwide. This provides tenants with greater variety of choice and increasingly competitive rentals.”
Haggiyannes concludes, “Ultimately, the decision to buy or rent is an extremely personal one, and one of the most important financial decisions you can make. Whichever option you decide upon, it is essential to make sure that you know, upfront, what the hidden costs are, what the benefits will be and what could possibly go wrong. If you ensure that you do your homework properly, your decision should be financially sound and ideally suited to both your pocket and your lifestyle.”
Established in 1985, Auto & General Insurance is a leading provider of short-term insurance solutions, with a core focus on innovative administrative efficiency and a service-orientated approach. For more information on Auto & General, or to read the full Bill of Rights, please visit www.autogen.co.za.
Now’s the Time to Stake Your Claim in the Property Market
18 December 2005
The bubble inflated, then burst, then inflated again. Now finally it looks as if property prices are seemingly slowing or even decreasing. According to Robyn Farrell, director of 1 st for Women, “Now could be the right time for South African women to take a page out of celebrity property moguls such as Britney Spears, Angelina Jolie and Catherine Zeta-Jones’s book, and invest in the booming South African property market.”
“An article on the website cyberprop.com reported earlier this year that, on a month-on-month basis, nominal growth in house prices was 0.6% in April this year, compared with 0.8% in March. According to ABSA, the current declining trend in month-on-month growth started in January 2004. While the growth is still continuing, it has definitely slowed. This does not however mean that prices are coming down – at this stage, prices are remaining at the same levels rather than increasing. This is good news for those looking for independence, empowerment and an excellent investment opportunity,” said Farrell.
According to the Absa House Price Index, in a statement released on 3 November 2005 , “Nominal house price growth, declined further in October 2005 to 15,8% year-on-year. Absa said that this was the lowest year-on-year growth since August 2002 when it was 15,9%. The current declining trend in house price growth is expected to continue into 2006, largely driven by higher interest rates during the course of the next twelve months. As a result, nominal house price growth of between 5% and 10% is projected for next year. This implies that nominal house prices may decline on a month-on-month basis at some stage in 2006.”
“Women are an economic force in the country today and it is said that women tend to make excellent property investors because they were often better able to visualise the potential of a house . Moving into your own home only when you’re married is a thing of the past, women should be shifting social norms and traditions and take advantage of this optimistic period in the property market,” says Farrell.
While the time might be ripe for buyers who can afford to purchase a house at the current prices, potential homeowners must bear in mind that there are a number of hidden costs associated with buying a home. These include costs such as transfer fees, bond costs, home loan initiation fees and deeds office registration fees, as well as the expense of moving and connecting water and electricity. In addition, a homeowner is required legally to have homeowners’ insurance, which protects the actual structure, thereby protecting the investment of the financial institution with whom you have your bond. All of these add up to a very expensive exercise that is not for the financially unstable. According to Iona Minton and Dave Welmans in their book, “The Property Game: A Guide to Property Ownership in South Africa ”, there are two main reasons for homeowners’ insurance, namely protecting your house and other structures; and protecting your personal property. They also remind homeowners that, while your monthly insurance premiums aren’t buying a tangible product, you are buying peace of mind.
Farrell concludes, “Buyers must remember that the choice of who to take out homeowners insurance with is always yours. While the financial institution who grants you your bond can give you suggestions on who to use for your insurance needs, you are not obliged to opt for their suggestions. As always with any financial decision, it is terribly important to shop around for the insurance product that best suits your particular budget and needs.”
1 st for Women Insurance offers women “Cover with Care”. For more information on 1 st for Women Insurance Brokers, visit www.firstforwomen.co.za