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Mortgage Credit
Ukraine
- visits Realkredit Danmark
2www.rd.dk
Agenda
•Realkredit Danmark as part of the Danske
Bank Group
•home real estate chain as loan originator
•Product Development
•The loan process
•Credit scoring
•Q+A
3www.rd.dk
Speakers
•Steen Hansen [email protected]
•Klaus [email protected]
•Michael Hermansen [email protected]
4www.rd.dk
Danske Bank - Strategy and focusA transition towards an international retail bank
1997
1999
2001
2005
1990
1995
Mergers/acquisitions
Divestitures/closures
Banking activities UKBanking activities USDanske SecuritiesBanking activities AsiaBG Guaranty & BG FactoringNon life insurance
5www.rd.dk
One Group – One System A strategy of doing things the same way everywhere
Channel
Branches
Contact Centre
Internet
Finance Centres
ATMs Product
FOREX
Bonds &
Equities
Treasury
LeasingLife &
Pension
Cash
Management
Mortgage
Credit
Asset Manageme
nt
Cards
Currency
Fees
Payments
Approvals
Customeroutput
Interests
Accounting
Core
Organization
Accounts
Customer
Risk Data Warehou
se
Brand
6www.rd.dk
22,4
13,7
7,7 7,45,2 4,5 3,7 3,1 2,8 2,7 1,6 1,6 1,2 1,2 1,0
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ank
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Danish banks market capitalisation (DKr bn)
(DKr bn)
Market capitalisation Danish banks- Danske Bank largest bank in Denmark
7www.rd.dk
189
113105
90 84 7970 65 64 64 58 58 53 50 45 41 35 34 34 28 24
0
50
100
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European banks market capitalisation (USD bn)
(USD bn)
Market capitalisation European banks- Danske Bank c. 21 largest bank in Europe
8www.rd.dk
Company Structure • RD is the Danske Bank Group’s mortgage finance arm and its provider of mortgage
finance products based on mortgage bond issuance. RD provides loans secured on
all forms of real estate (property) collateral including private and rental residential
property, holidays homes, social, cultural and educational housing, commercial,
industrial and agricultural property. In this capacity RD is a mono line MCI that only
focuses on mortgage credit. RD also ensures that all mortgage finance customers of
the Danske Bank Group have access to quality advisory services
• RD markets its products through the Danske Bank and BG Bank branch networks, as
well as its own distribution channels. The Danske Bank and BG Bank branch
networks have increased RD’s distribution power significantly, not only in terms of
market share; they also provide economies of scale. The fact that RD’s own branch
offices are often located physically together with a BG Bank or Danske Bank branch
office has created additional synergies
9www.rd.dk
Company Structure
• The nation-wide branch network of Danske Bank and BG Bank,
comprising a total of approx. 500 branches and corporate centres,
strengthens the distribution power of RD considerably
• RD is represented by 22 branches across Denmark - 18 of these in
shared offices with Danske Bank finance centres or large Danske Bank
and BG Bank branches
• home A/S is the real-estate agency chain of the Group. The real-estate
agency activities are organised as franchise business, and the chain
comprises a total of 190 offices in Denmark and has a staff of 1.100
• RD has branded its products, thereby achieving the benefits of having
an extensive customer base and distribution network as well as the
positive effects from public awareness
10www.rd.dk
Organization
Board of Directors
Interal Audit Jens Peter Thomassen Group Chief Auditor
Executive Board
Sven Holm
Thomas Mitchell
Executive Board Secretariat
Henrik Blavnsfeldt
Senior Vice President
Region East
Jens-Erik Corvinius
Regional Director
Region West
Allan Aagaard
Regional Director
Funding & Markets
Klaus Kristiansen
Senior Vice President
RD Service
Lars Kjær
Senior Vice President
Credit Division
Carsten Nøddebo Rasmussen
Executive Vice President
Steen HansenSales Division
Executive Vice President
Corporate Division
H. P. Hansen
Head of Corporate Division
SubsidiaryHome a/s
Niels BjerregaardExecutive Director
(25)
(248)
(259)
(95)
(52)
(45)
(29)
(14)
11www.rd.dk
History and Company Structure ctd
• RD has 767 employees of which 165 are employed in the centralised
departments and 602 in the the 22 mortgage credit offices and corporate
centres across Denmark
12www.rd.dk
Business concept
• RD is the Danske Bank Group’s mortgage finance arm available to all
customers on the Danish mortgage credit market
• RD’s objective is to be market leader and the customers’ first choice as
provider of secure and convenient mortgage finance
• From its business activities, RD aims to create value for shareholders,
customers and employees
13www.rd.dk
Mission
• RD’s core business is mortgage lending based on the issuing of mortgage bonds
• RD will ensure that the Danske Bank Group offers expert advisory services and
provides competitive mortgage finance products and services tailored to the
individual customers and their property
• RD will offer additional products and services, mainly from the Danske Bank
Group. Development of combination products will be carried out in co-operation
with other business areas of the Group
• Products and services are marketed through RD’s own distribution channels as
well as the sales network of the Danske Bank Group. Customers will be offered a
choice between personal advisory services and sophisticated electronic solutions
• RD is participating actively in attracting customers to the Danske Bank Group as
an entity
14www.rd.dk
15www.rd.dk
home – real estate agent
• Established in 1990
• Subsidiary of RD
• Franchise business
• home is the franchise-provider
• 95 franchise-holders
• 190 branches all over the country
• 1.100 employees
• First on the Internet in 1996 – www.home.dk
16www.rd.dk
home
•Vision: •Best brand and market leader
•Mission: •The leading real estate agent that gives the best
deal and refers customers to the group
•Core-values: •Integrity, Accessibility, Value creation, Expertise,
and Commitment
17www.rd.dk
4 focus areas
•1 Profitability
•2 Market share
•3 References (the battle of the financing)
•4 Hit rate
I will return to the results!
18www.rd.dk
Why references? Why not sales?
•The marketplace•Banks are close to their customers•Product-packages and loyalty-programmes are
standard•The real estate agent gives advice to the seller
that pays the bill•The agent gives loan offers•The real estate agent must not give advice to the
buyer• It is the buyer, which decides the financing of the
property
19www.rd.dk
home/group concept
• home provides the buyers with RD-loan offers for financing
• home refers customers to the banks• Buyers that already uses the banks (simple)• Buyers who does not (not simple)
•home recommend the banks•Best practise: Physical customer introduction
• Why do we do it this way?• The banks have the best opportunities to create a strong
relationship with the customer – they have more to offer/sell
• If the customer says “no thank you”: • home refers to RD – for the mortgage only
20www.rd.dk
Results
1. home is very profitable
2. 29 % MA 1Q06
3. 56 % references to banks – plus:• 21 % Group customers• 8 % RD• 15 % Lost opportunities/potential
4. 26-59 % hits in banks• 40 % hits for RD
21www.rd.dk
Motivation
•home gets a commission•From the banks•From RD
•Management focus
•Internal results
•Best practise
