Mortgage Financing Product Restructuring Case
Author : trish-goza | Published Date : 2025-06-23
Description: Mortgage Financing Product Restructuring Case Study March 25th 2013 1 By Muhammad Akbar Head Mortgage Financing Ashiana Housing Retail Finance Division The Bank of Punjab Training Session March 25th 2013 2 Mortgage Financing Importance
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Transcript:Mortgage Financing Product Restructuring Case:
Mortgage Financing Product Restructuring Case Study March 25th 2013 1 By Muhammad Akbar Head Mortgage Financing & Ashiana Housing Retail Finance Division – The Bank of Punjab Training Session March 25th 2013 2 Mortgage Financing Importance Potential 1 Focused Population Segment 2 Case Study Low Cost Housing Brainstorming NPL Case Study 4 Why ? Mortgager Financing Significance for Country ! 4 Higher Output of Country GDP = Private Consumption + Private Investment + Public Consumption + Public Investment + Exports – Imports Private Consumption = 80% Consumption Demand Production Investment Improve Social Sector Impact of House Financing 5 50 Linked Industries Mortgage Portfolio GDP Pakistan = Rs. 19,437 Billion Housing portfolio (Pvt. Sector) = Rs. 53 Billion FI Staff House Finance = Rs. 76 Billion Total Housing Portfolio* = Rs.129 Billion Mortgage = 0.66% of GDP International Comparables 6 *as of June 2013 Obama’s State of Union Address 2013 7 Potential Housing Shortfall World Bank Estimation 8 million housing units (2009) Annual incremental demand 600,000 units. Annual housing needs 1.1 million Units (600,000 incremental demand and 500,000 units from the backlog) Total Funding requirement Rs. 3.3 trillion per year (average price of Rs. 3 million per unit) Funding Demand Rs.330 billion (Assuming only 10% housing needs as effective demand) Mortgage Financing Requirement Rs. 231 billion per annum (At 70% LTV) 8 Impediments Legal Framework & Infrastructure Title documents Foreclosure Legal Reforms: Securitization, credit contracts, stamp/registration duties etc. Funding Sources Channelization of long term funds Mortgage Assets securitization Refinancing institutions 9 Industry Focus Mortgage 2nd Qtr-13 Disbursements Rs. 3.0 Billion Avg. Loan Size Rs. 5.3 Million Avg. Rate 13.7% Avg. Period 11 Years Avg. LTV ratio 44% Monthly Installment Rs. 80,000 Monthly Income Rs.160,000 Property Value Rs. 12 Million Pak. Avg. Income (Urban) Rs. 28,000 to Rs. 41,000 Per Capita Income (2012-13) Rs.12,000 pm US $ 1,368 (Rs. 145,000 ) 10 SBP Quarterly Housing Report (Apr – June 13) FBS-PERCENTAGE DISTRIBUTION OF MONTHLY HOUSEHOLD INCOME BY SOURCE AND QUINTILES, 2010-11 Focused Population Banks/DFIs Self sustainable corp. entities Private sector MI above Rs.0.10 M Micro Financing Incremental Housing Models Case Study Ashiana Housing Scheme Low Cost Housing Financing Model 12 Product Development Regulatory Compliance Bank Credit Policy Focused Target Market Risk Mitigants Internal Controls SOPs – credit initiation, disbursement, operation, collection & recovery Objective Safe Return Profitability 13 Ashiana Housing - Documentary 14 Public Housing Company 15 Housing Company Acquire State Owned
