That puts the supervisor in a Tuesday report.
the report shows that insurers and pension funds on their investments in Dutch mortgages since the beginning of 2010 have doubled.
These parties to finance 20 percent of the new mortgages. As also bankdochters of insurers are included, the percentage was even 28 percent.
at the same time, mortgages of banks thus decreased. But banks are still accounted for 62 percent of new mortgages.
Banks
Look at all outstanding mortgages, banks were in 2010 accounted for 80 per cent of the outstanding mortgage debt. For insurance companies, banks, insurance groups and pension funds were the percentages in that year, respectively, 6 percent, 3 percent and 2 percent.
This year, the proportion of banks still at 75%. Insurers are sitting on 8 percent, the bankdochters at 5 percent, and pension funds at 3 percent.
more Balanced
According to DNB, the emergence of insurance and pension funds for a more balanced funding of long-term loans.
“In contrast to banks they don’t run the risk that money obtained directly or market-based funding unexpectedly dries up,” said DNB. Therefore, take the risks in the financial system as a whole.
in Addition, the offer of mortgages to become more diverse and provides more competition. Also the role of foreign providers in the mortgage market contributes to this.
“That promotes not only the stability of lending, but can also contribute to a greater efficiency and a lower cost level.”
Risks
The supervisor thinks that, in particular, the hypotheekbeleggingen of pension funds in the short term can considerably grow. Moreover, it is expected that banks will be “a dominant role” to continue to play in the mortgage market.
The regulator stressed that this shift to do so may lead to credit risks pile up with players that are not equipped or risks not be good enough to understand.
it could be that pension funds and insurers could be faced with non-payment. “It is not excluded that in the future, a default would greatly increase. For example, by unexpected economic or social developments.”
in addition, the possibility of early repayment of mortgages for these parties is difficult to the proceeds of mortgages in advance along with it. Thus, these investments are less predictable than for example that in government bonds.
in Addition, pension funds and insurers are not easy to get their mortgages back sales. A forced sale may in that case lead to losses.
Box
Since these parties in the selection of mortgage loans and the settlement of bad loans, often to a third party transaction, emphasizes DNB that the institutions have sufficient expertise in order to recognize well performed.
DNB director Jan Sijbrand stressed Tuesday that lending is a business. “Especially when dealing with customers with payment difficulties faced, is not in the genes of pension funds and insurers,” said Sijbrand.
Furthermore, it remains to DNB or keep an eye on the instruments that the supervisor may intervene, yet effective enough. These instruments are largely focused on banks.
Banks
Also, the emergence of these players in the mortgage market, negative consequences for the business model of banks. “By increased competition, the margins on new mortgage loans from banks under pressure.”
Pension funds and insurance companies are focusing on NHG mortgages with a long rate fixation of up to twenty years. “When new players limit themselves to safe or more standard loans, then this has repercussions on the characteristics of loans that remain with banks.”
DNB says the shifts are “closely” to monitor and regularly review the mortgages of financial institutions to examine.
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