ING Direct has revealed it will relax some of its credit policies as the lender says it has a greater appetite for risk.
Speaking at a broker roadshow event in Sydney, the bank’s chief risk officer, Bart Hellemans, outlined some of the policies under review. Hellemans said changes to the bank’s credit policies will be communicated to brokers in the weeks ahead, but tipped several decisions ING Direct had already made to revise its credit policy.
Hellemans said the bank would now allow add-backs on depreciation, would accept two dwellings on a single title, would decrease the minimum space on units to 40 square metres and would allow casual employment and contractors.
“A whole series of those changes will be coming through, and will be communicated to you by the end of the month” Hellemans said.
However, Hellemans said the bank still sought to maintain a strong portfolio, and ruled out relaxing the lender’s credit policies in some areas.
“There are a few things I will not do. First of all, is under our reduced equity finance product I will not entertain refinancing. I will not entertain financing for the purchase of land if there is no construction obligation within 12 months. In terms of non-residents and foreign buyers, while we will change some of the criteria relating to Australians living overseas, for non-residents with no ties to Australia we’re not going to relax the rules. I will not do low-doc lending,” Hellemans said.
But Hellemans vowed that ING Direct would strive to clearly communicate its credit policy, and would be open to feedback from its broker network on possible changes.
“I will promise going forward, that if I don’t want to it, I’ll tell you,” he said.
The bank will also develop a review program wherein its risk management team will review all declines, all requests for additional information and all approvals with excessive conditions before passing communication back to brokers. Hellemans said the review program would be instituted from 1 July.
“It reinforces that we hear you, and if you have issues with our underwriting criteria and standards, I will listen,” he said.
Ultimately, Hellemans vowed that ING Direct would look to expand its portfolio through brokers.
“We have a damn good [portfolio]. It’s a low-risk portfolio, and we have the appetite for more risk. We are open for business,” he said.
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