This weekend I read an article in the Business Times about Absa Home Loans division's decision to only serve and lend to their own clients. They claim that they have a history on their own clients' banking records, and therefor they are more willing to lend money to them.
As you know, about a year ago almost all the banks had problems with bad debt and they all dramatically increased their lending criteria. This however is just one step too far I would say. ABSA had a 33% market share before, and they will surely lose market share because of this decision. Losing market share also means losing money, since they make money by lending it out.
ABSA must have weighed the pros and cons of such a move. Maybe this will reduce the risk somewhat, but they still cannot control the employment or risk profile of their own clients in any way.
I just hope this is temporary for the sake of our clients. At least we can still apply at three other banks if you are not an existing ABSA client.
We will update this site as we get news about changes to their policy.
Posted via email from SA Home Loan News
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