“The current crop of write-offs were bad loans that were made in good times – but we are now in a different market and it needs to be recognised as such.”
“By now, the banks’ rejection rate on bonds could, in my view, be 20% lower without undue risk to them. Home finance could and should now be making a greater contribution to banks’ profits, which will inevitably, it is now accepted, be well down on previous years.”
While the “score card” system of vetting bond applicants has merits, it often fails to recognise the realities of the new economy, said Lawrence.
I hope that Rob Lawrence is correct as home loans are declined way to easily these days. It is hard to get a home loan approved, and a little more approvals will be positive news for both banks and home buyers.
Related posts:
