Iton: Mortgages have performed well historically at the NCB

As new owners take control of the National Commercial Bank (NCB), the current management can only presume that the new operators will continue Government’s policy programmes such as the “100 percent mortgage” and “student loans for the disadvantaged”.{{more}}

“I would presume,” Chief Executive Officer at NCB, Andre Iton, responded to a question posed to him at a press conference on Tuesday afternoon, as SEARCHLIGHT sought to get clarity on the future of programmes which have so far benefitted police officers, teachers, nurses, and several underprivileged students who lack the security needed to obtain loans to pursue their studies.

“Let me speak to the mortgage situation: Mortgages have been a very good performing portion of the bank’s portfolio historically, and I will see no reason why a new [company] in assessing the performance of the various segments of the portfolio will shift significantly from what obtained in the past.

“The student loan situation is a slightly different situation. Student loans, as you would recognize by their very nature, are long term in nature, because students get three or four years to go to study and they have a longer pay back of 15, 16, years on average,” said Iton.

“It will be imprudent of a financial institution to have too much of its activity fixed at that end of the portfolio, particularly where the stream of repayments are not confirmed,” said Iton, outlining that with this type of loan, the bank does not know the person’s ability to repay, because a lot of the loan’s determination is based on conjecture.

“Those are the kinds of considerations that will have to take place in a more objective fashion when private sector owners are on board as opposed to when there is a situation when the owner has social policy considerations uppermost in their minds,” said Iton.

“On the second one, one can expect that there will be some modification of the programme,” Iton said.

In the case of the mortgages, Iton said that he doubted that there would be any changes to what presently exists.(HN)