Bank of Ireland Mortgages (BOIM) - A dynamic/innovative business, providing more new mortgages than anyone else in the Republic of Ireland and delivering quality earnings to the BOI Group
Our Ambitions:
Undisputed No. 1
Mortgages:
Market leaders in 2004 Book Quality Customer Retention Customer / Staff Satisfaction Process Efficiency Return on Equity
Recognised as a Key Anchor Product for BOI Group
Bank of Ireland Mortgages
The Irish Mortgage Market €bn
€bn
16
13.5
New Advances (DOE)
10.8
12
6.5
8
7.6
7.7
75
National Mortgage Book (CBI)
60
47.5
45
4.6
30
3.6 4
59.2
32.7 17.2
20.8
38.5
26.2
15 0
0 1997
1998
1999
2000
2001
2002 2003 (est)
Dec-97
Dec-98
Dec-99
Dec-00
Dec-01 Dec-02
Dec 03
•
According to the Department of the Environment (DoE- Q3 2003), new house prices were up 13.1% nationally with Dublin up 10.7% yoy to September 2003 while second hand house prices grew yoy by 16.1% with Dublin up 16.6%.
•
New mortgage lending grew by 25% yoy in the first nine months of 2003 (per DoE). Full year market estimates are for 24% growth, giving volumes of circa. €13.5bn.
•
The National mortgage (CBI) book showed a yoy increase of 25.5% in the 12 months to December 2003, reflecting the highest level of annual growth since February 2000.
Bank of Ireland Mortgages
Market Dynamics •
Size of mortgage market driven by number and value of new advances to customers.
•
Strong housing and residential mortgage market growth underpinned by robust fundamentals; - Positive demographics (population bulge in key household group 20 – 35 years), - High employment (a growing workforce), - Low and stable unemployment, - Supply constraints (Ireland is still playing catch up for periods of under supply).
•
Ireland has a significant value (equity) of un-mortgaged housing stock.
•
Exceptional market growth in recent years: - The national mortgage book grew 184% over the last 5 years and 55% in the last 2 years (December 2003).
•
But housing stock per capita still continues to remain below EU average.
Bank of Ireland Mortgages
Housing Stock per 1,000 population UK Sweden Netherlands Ireland Germany Finland Denmark Belgium Austria 0
•
50
100
150
200
250
300
350
400
450
Ireland continues to play ‘available stock’ catch-up with our European neighbours.
Bank of Ireland Mortgages
500
Multi-Channel Multi-Brand Approach •
Unique multi-channel, multi-brand strategy leveraging off the critical foundation product.
•
Sourcing new advances through 3 channels: BOI branches, ICS Intermediaries and through ICS Mortgage Stores. - ICS and The Mortgage Store channels are secondary brands used by BOI to enhance distribution capability by their ability to access non-BOI and competitor customers, - A key enabler of our market leadership position.
•
Mortgages are a key relationship product for BOI and ICS, further supporting our customer proposition.
•
Years of mortgage experience has produced the right mix of expertise and product propositions to suit our many customers’ changing needs.
•
BOIM is well positioned and has grown market share significantly without diluting book quality.
Bank of Ireland Mortgages
Customer Segments •
BOIM maintains a good mix of customer segments.
F irs t T im e B u y e rs
T ra d e r U p B uyer
E q u ity R e le a s e
R e s id e n tia l In v e s tm e n t L e n d in g
M o rtg a g e B o o k
34%
24%
22%
20%
N ew Advances
30%
21%
23%
26%
S e g m e n t M ix
Dec ‘03
•
Residential investment lending saw a sharp increase following budget tax changes in 2002.
•
Product / Price to suit all segments – Good customer choice and after sale service in a very competitive market.
•
Mortgage refinancing and equity release products are likely to be more prevalent in the Bank of Ireland Mortgages Irish market going forward based on previous UK experience.
Loan Quality •
BOIM’s mortgage book is ‘A’ quality rated - €500m securitised in June 2000 L o a n to V a lu e