NCB launches realtor incentive programme to boost mortgage business

Thursday, June 21, 2018

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On a drive to improve its mortgage portfolio, $11-billion profit maker NCB has established an initiative to reward realtors and real estate entities for referring approved and booked mortgage business to NCB.

The product, which was recently launched at the NCB Wellness Centre, includes a combination of commission payments, among other sweeteners, as the company looks to increase its share of the mortgage market.

For its half-year ended March 31, NCB suffered declined growth in year-over-year profit moving down 9.4 per cent to total $6.4 billion for the March 2018 quarter compared to March 2017; considerably below growth of 28 per cent for the December 2017 period compared to December 2016.

Growth was also below an increase of 33 per cent or $4.7 billion NCB had seen for its year ended September 2017 comparable to the results of 2016. NCB's financials showed that the slowed growth for the March quarter was led by reduced margins in the corporate banking and insurance services.

Group Chief Financial Officer Dennis Cohen blamed the reduction in margins on declining interest rates. During the company's investor briefing in April, he told shareholders that interest margins of the financial institution are declining as some of the business segments rely heavily on interest income.

The company, however, noted that it prides itself on being fairly well diversified referencing NCB Capital Markets as one of the business segments under the group that has benefitted from the macroeconomic dynamics.

“At NCB we pride ourselves on forming mutually beneficial partnerships with our stakeholders. It is pivotal that as mortgage lenders we maintain strong relationships with real estate entities, a relationship that is especially important in such a highly competitive environment,” Senior General Manager, Retail Banking Division Brian Boothe said during the launch.

Boothe, in noting that mortgage business segment continues to grow from strength to strength, referenced 2012 when NCB refocused on the mortgage market to become the first institution to offer single-digit mortgage rates.

“We followed that initiative by offering mortgage indemnity insurance, with up to 97 per cent financing with the Jamaica Mortgage Bank. We also established our NCB Mortgage Administration Unit, and have centralised our mortgage processing, which allows us to more efficiently support our stakeholders and improve our turn-around time,” he said.

According to Boothe, in 2017, NCB also partnered with NHT in offering joint mortgages under the Joint Financing Mortgage Programme (JFMP) and again set the trend on June 1 by offering one of the lowest rates currently in the market.

“Homeownership is the ultimate dream of most individuals, and as such we are committed to designing a mortgage facility geared towards making that dream a reality for our nation's people, here and abroad. As outlined, we have made some inroads in the industry, but now we have decided to put greater focus on growing the mortgage portfolio, and we view our realtors as key partners on that journey” he said.

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