NCRC Global: U.S. subprime fall-out even in Africa: fewer loans, but mergers continue, Citi grows in India, lays-off in UK NOTE: the impacts of the U.S. subprime implosion continue to spread, including in Africa, where as reflected below, lending is decreasing (but unlike in the U.S. right now, mergers continue). Meanwhile, Citigroup for example has re-affirmed its commitment to consumer finance in emerging markets like India, see below, while it has laid off subprime employees in the UK -- by conference call... Matthew Lee, Esq., Executive Director Inner City Press / Fair Finance Watch NCRC Board member - Global - U.S. Tel: 718-716-3540 - E-mail: MLee@innercitypress.org paste Copyright 2008 Times Media Limited All Rights Reserved Business Day (South Africa) May 09, 2008 Business Day Edition SECTION: ECONOMY, BUSINESS & FINANCE; Pg. 15 LENGTH: 523 words HEADLINE: Finbond originating fewer mortgages BYLINE: Nick Wilson BODY: Finbond originating fewer mortgages As National Credit Act takes its toll on home loans, lender plugs gap with consumer finance Property Editor THE National Credit Act, and the fact that banks are declining larger numbers of mortgage applications, has resulted in significantly fewer mortgage originations in the market. Willie van Aardt, CEO of mortgage origination and consumer finance company Finbond, said this week that more loans were being declined because consumers did not pass banks' credit criteria under the act, which came into force in June last year. Van Aardt said the global subprime and liquidity crises facing international banks had also influenced local banks, which were introducing even stricter credit criteria and "behaving more cautiously". Before the act, Finbond said 37% of its mortgage applications were declined by the four big banks. After the legislation and for the balance of last year, 42% were declined. Van Aardt said this year 45% had been declined. Finbond, which released its financial results for the year to February on Tuesday, said the group had seen mortgage origination volumes shrink by as much as 40% towards the end of last year. Finbond still managed strong results, however, achieving an operating profit 6,9% above its forecast, but Van Aardt said this was due largely to the fact that Finbond had diversified strongly into the consumer finance market. When Finbond first listed on AltX in June last year, the contribution of mortgage origination and related activity to net profit after tax was about 70%, with consumer finance contributing 30%. Since then the company has expanded into consumer financing, with the result that mortgage origination and related activities contributed 45,5% to net profit after tax for the year to February, with consumer finance contributing 54,5%. Mortgage origination and financial services intermediary ooba, formerly Mortgage SA, said on Tuesday mortgage origination volumes in the market had dropped more than 30% since the act came into force. CEO Saul Geffen said the interest rate hike in June last year coincided with the act and had been "the tipping point". "As interest rates have continued to climb and affordability negatively impacted, it's got worse," Geffen said. He said ooba's statistics showed that declines of mortgage applications by banks for credit and affordability reasons had risen 50% since the act. "The increase in the number of nonperforming loans on banks' books and their capital constraints because of the credit crisis mean stricter credit criteria," he said. Geffen said that across the mortgage origination market, there had probably been a 10% increase in declines by banks of mortgage applications since June. Jan Kleynhans, CEO of First National Bank Home Loans, said that in the past two or three years higher interest rates had led to a substantial increase in defaults on debts. He said the act was preventing consumers from becoming overindebted. "This is not just true of mortgage lending, its true of all lending," said Kleynhans. "The banks are just doing their job of ensuring that people do not take on debt they can't afford." LOAD-DATE: May 9, 2008 Copyright 2008 T.A.B. International Pte Ltd. All Rights Reserved The Asian Banker Journal April 30, 2008 LENGTH: 1658 words HEADLINE: News & Analysis South Africa: Absa to buy into Woolworth Financial Services South Africa's largest retail bank, Absa Group, said it has agreed to buy a controlling interest in retailer Woolworths Holdings' financial services unit for 875 million rand ($110.8 million). Absa will buy 50 percent plus one share in Woolworths Financial Services, which it said will help it increase its share of the consumer finance market in South Africa. Woolworths' financial unit manages a store card, personal loans, Visa credit card and selected insurance products. paste Copyright 2008 Financial Times Information All Rights Reserved Global News Wire - Asia Africa Intelligence Wire Copyright 2008 Informatics (India) Ltd, Source: The Financial Times Limited India Business Insight May 8, 2008 Thursday ACC-NO: A200805121F-186FF-GNW LENGTH: 51 words HEADLINE: CITI INDIA NOT TO SELL ANY ARM (IT WOULD RATHER STRENGTHEN PRESENCE IN THE COUNTRY) BODY: Citi India has ruled out closing down any of its divisions in the country and says that it would rather strengthen its presence here. The company says that it has made investments of over Rs400 crore in 2007-2008. Citi India says that the consumer finance business is growing at the rate of 25-30 percent. LOAD-DATE: May 12, 2008 ID: 41308 Author(s): NCRC - Matthew Lee Publication date: 25/05/08

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