Banks offering more attractive home loans to boost market share

Tweet

Rising competition prompts banks offering more attractive home loans

By DALJIT DHESI daljit@thestar.com.my

PETALING JAYA: With razor thin margins due to rising competition in the home loans market, banks are now aggressively value-adding their home loans to stay competitive and boost their market share.

OCBC Bank (M) Bhd head of secured lending Thoo Mee Ling said banks must value-add to their generic home loan offerings in order to not just survive but thrive, especially in this competitive climate.

“What separates those who thrive from the others today is how much they have moved from price to innovation. It is heartening to see a greater emphasis today on enhancements to loans products, rather than mere reliance on price cutting previously.

“This is where banks are getting even more creative by adding in the necessary finer details to a product that otherwise appears bland. Home loans with features and benefits that are tailored specifically to complement customers' lifestyles often serve to compel them to look beyond price and into a more holistic perspective,'' she told StarBiz.

File picture shows a housing are in Shah Alam - Starpic by BRIAN MOH
 

Thoo said customers were nowlooking for more than just a home loan as purchasing a house was simply the beginning.

Banks would also need to cater to their immediate follow-on needs like renovations and furnishing, for example, and this was where additional financing that came with the home loan would be helpful, she reckoned.

At OCBC Bank, she said there were bespoke home loans that were tied in with study loans, renovation loans and even overseas property financing schemes, adding that each of these took into consideration things that went beyond mere property purchase.



She said it was undeniable that investing in a product to bring in customers and then introduce them to other products remained a good strategy for growing the business, but banks would still need to strengthen their range of offerings to become a one-stop shop for their customers.

Outstanding home loans, valued at RM261bil, accounted for about 27% of the total banking system's loans as at end-September 2011. Although there has been strong expansion in home loans in the last couple of years, the proportion of home loans has been hovering at 27% in the past five years.

,B>Thoo: ‘What separates those who thrive from the others today is how much they have moved from price to innovation.’

Commenting on home loans, RAM Ratings' head of financial institution ratings Wong Yin Ching said competition among banks in the home loan market had been rife, resulting in razor thin margins in recent years.

This stemmed from the homogeneity of the home loan products, whereby any innovation in product features and price competition (by lowering rates) were quickly replicated and matched by market players, she said.

Wong added: “While some banks have instilled more discipline in its risk-reward pricing, aggressive pricing is still seen in the market and this is unhealthy and unsustainable in the long run.

“Going forward, we think that personalised services and quicker turnaround times by banks would be key to stay relevant in the home loan market.”

Alliance Bank Malaysia Bhd executive vice president and head of consumer banking Ronnie Lim said competitive pricing aside, Malaysian banks were now re-inventing the mortgage landscape by extending superior customer experience at every customer touch point.

For the bank, he said having mortgage specialists, who also acted as advisory consultants, among others, had enabled Alliance Bank to become one of the key mortgage players in the market.

He said the bank has been growing its mortgage specialists force extensively to not only engage customers effectively but also deepen its relationship with developers, lawyers and real estate agents.

Lim added the bank was also able to provide fast “approval in principle” service to assist customers looking for home financing solutions to make informed decisions before committing to their choice property.

For mortgage players, he said one of the key challenges was about overcoming margin compression and the bank was able to achieve this by introducing new systems and processes to help staff increase their productivity.

This had since yielded results: “For the year under review, sales productivity has increased threefold compared to a year ago,” he said.

Over-work and the generation gap

weet

M'sians working more and carrying home more work

Monday Starters - By Soo Ewe Jin

ACCORDING to a global survey by Regus, Malaysians are not only clocking more hours at work but bringing their office load back home as well.

I can already see many of you, especially young workers in consultancy firms, nodding your heads in agreement. And today is only Monday.

The article on the survey findings, written by my colleague Yuen Mei Keng and published in this newspaper last Wednesday, was aptly headlined “Malaysians too hardworking”.

Regus is the world’s largest provider of workplace solutions so it obviously has the credentials to carry out the survey which involved some 12,000 business people in 85 countries.

The findings of interest to us – 47% of Malaysian workers take tasks home to finish at the end of the day for more than three times a week, compared to 43% globally; 15% regularly work for more than 11 hours a day, compared with 10% globally.

William Willems, regional vice-president for Regus Australia, New Zealand and South-East Asia, says the study found “a clear blurring” of the line separating work and home.

 

File picture shows Mohd Rasul (centre), who is handicapped from birth, showing his skill working with computer using his toes. The computer was donated by superstar Anita Sarawak. Looking on were Hamidah (right) and Mohd Ramli (left). - Starpic by ROSHIDI ABU SAMAH.

“The long-term effects of such over-work could be damaging to both workers’ health and overall productivity.

“This is because workers may drive themselves too hard and become disaffected, depressed and even physically ill.”

Sounds rather ominous but I doubt if anyone is going to lobby the Government for policy changes so that people don’t work so hard.



After all, many are fighting to raise the retirement age in the private sector to 60, the same as that in the Government sector.

The Regus report should be seen in the right perspective of how different generations view work because of different circumstances.

Our problem has always been that the earlier generations control the workplace environment and are not as sympathetic about the realities of today.

I must confess that when young people seek my advice, I still cannot resist telling them that I started on a salary of RM135 and had to work, for many years, on the graveyard shift. Although I feel they need to experience pain before pleasure and appreciate the value of hard work, it often does not come across like that from their perspective.

They probably see me as the old foggie who did not have any form of social life back then, so spending all my waking hours in the office was the only thing to do.

But we need to understand that the world has changed so much from the time of the baby boomers to the current Generation Y.

Advances in technology, which allow the workforce to stay connected without being together physically, may, in some industries, make even the standard 9 to 5 routine in the office outdated.

Being hardworking is a positive trait for all good workers but if we are working too hard, and chalking unnecessary extra hours that cause severe strain on our home life, then maybe something is not right.

I am glad that we are beginning to see many enlightened bosses who value a proper work-life balance for their workers but they are still in the minority.

I have a dear friend who works in a rather high position in a multinational who told me that whenever she was at headquarters in Europe, she is reminded that no one is allowed to work beyond office hours unless a written request is submitted.

“They shut down the office after 5 so you had better have a strong case to want the lights and air-conditioner on,” she said.

No wonder she is so happy that she has been posted to headquarters permanently.

Her Facebook sharing is full of her travel stories and picnics in the park that I sometimes wonder if she is even working at all.

Deputy executive editor Soo Ewe Jin will remember 11.11.11 as the day he missed a most meaningful reunion in Penang of Old Frees from his year who came from near and far to catch up with one another.

Related articles

• Friends for all seasons - priceless

PRM, the Seladang's Resurgence in Malaysian politics?

Image via WikipediaTweet

No bowing out for the seladang

One Man's Meat By Philip Golingai

PRM, the only left-wing party in the country, is looking for a resurgence in the coming general election

A DIE-HARD Parti Rakyat Malaysia (PRM) supporter trudged up a long flight of stairs to the party headquarters on the third floor of a shoplot in Petaling Jaya.

I could literally hear the 57-year-old man’s knee creaking as he spiritedly - one step at a time - advanced towards where PRM was celebrating its 56th birthday on Friday.

On the way up, he talked about the days in the 1960s when, as a boy, he put up PRM posters during the election campaign against the “kapal layar” (the sailboat logo of the Alliance, predecessor to Barisan Nasional).

Quiet celebration: Joining Rohana in cutting the PRM anniversary cake are (from left) treasurer Teh Soon Ming, secretary-general R.N. Rajah and central working committee member Zulkarnain Abdullah at the party headquarters in Petaling Jaya last Friday.

“It was during the Vietnam War era when anti-Americanism was the rage and support for the party was at its height,” he recalled.

PRM won the parliamentary seats of Kuala Lumpur and Johor Baru in the 1959 general election.

At 11am sharp on 11.11.11, PRM president Rohana Ariffin and her comrades cut a cake with the party’s logo - the head of a seladang (the Malayan gaur), witnessed by about 50 people, including two party members who were ISA detainees.

After the party, I spoke to Rohana, a retired associate professor of Universiti Sains Malaysia.

A bit wary of attending a party with leftist leanings as it is the season to attack all things linked to Socialism, I asked the president to explain her party.
 
“The socialist party - as far as we know it in Malaysia - believes in the democratic process of being elected into power and not through armed revolution,” said the 60-something who was wearing a red bandana.

“If you ask what socialist ideology is, it believes that all production of the country should be for the consumption of the rakyat first and not so much for profit.

“You can make a certain amount of profit but the rakyat’s interest comes first, especially that of the working class.”

PRM is one of Malaysia’s oldest political parties. It was founded as Parti Rakyat on Nov 11, 1955 by Ahmad Boestamam, Dr Burhanuddin Al Helmy and Ishak Mohamad.

“The party was strong in the 1960s and 1970s. But since it was the only legitimate left-wing party in the country at that time, the Government came down hard on people with socialist ideologies,” said Rohana.



“When you look at the evolution of the party, most PRM leaders (such as Boestamam, Kassim Ahmad and Syed Husin Ali) have been detained in prison.”

In 2003, PRM was thought to have been dissolved when it merged with Parti Keadilan Nasional to form Parti Keadilan Rakyat.

“At that time, the party leadership was quite ‘tired’ because society would not accept us as they saw PRM as left-wing and there was a popular movement which was Keadilan, so they decided to merge.”

However, like the seladang, PRM stubbornly refused to become extinct.

“The only problem with the merger was that we should have had a last delegates’ meeting to dissolve the party in an honourable manner,” Rohana recalled.

But in the haste to merge, the leadership “forgot” to do so.

In 2005, die-hard supporters convened a national congress and “resurrected” the party as it was never de-registered.

During the interview with Rohana, PRM supporters would quietly slip RM10 or RM50 to the party president as they bid goodbye to her.

“This is our culture,” she explained. “We are a very poor party and we rely on financial support from our members. Usually what we do is pay with our own money for an event we organise and then our members will give donations.”

It is heart-warming for Rohana to see die-hard supporters climb the steps to attend the party’s event.

“For example, there was a 70-something member who came from Sungai Tembiling (in Pahang) by boat and bus and he told me, ‘Parti Rakyat is my party and I will never change’,” Rohana related.

“And even among the young the spirit is there. Our party is rejuvenated by the young who are interested in left-wing politics.”

The young, she said, were fed up with the infighting in Parliament between the Government and the Opposition.

“There is no compromise or middle ground in any issue that the two coalitions can’t see the trees for the forest.”

The party is seeking relevance in the next election.

It is targeting to contest in seats like Selayang, Balik Pulau and Petaling Jaya Selatan.

The seladang, which can’t be put to pasture, is hoping left-wing politics will make a resurgence.