VUB's Market Share and Financial Services
ORIGINATION AND UNDERWRITING
Sales force
All mortgages are originated either directly through VUB branches or through commercial agreements with more
than 50 external partners (have just the first contact with the client, the processing of the loan brought is done at the
branch)
Most of the external partners are concentrated in the region of Bratislava
Underwriting
& Risk
Policies
Property
Valuation &
Collateral
Management
All risk policies related to origination are applied equally on all mortgages regardless of their presence in the cover
pool. Portfolio management and monitoring is performed on all mortgages, with possibility to distinguish between those in
and out of the cover pool
Credit delegated powers are fully centralized and granted only within risk management division at VUB headquarters. All
mortgage applications in terms of credit are processed with steps that are either automated (by rules in risk policies) or
executed by corresponding risk management roles under credit delegated powers policies
Mortgage underwriting techniques includes rating cut-offs according to PDs with corresponding risk based pricing,
income verification required by the local regulator including operational stress test on interest rate, Loan to Value policy
based on several LGD impacting variables and their combinations, and methodology for collateral value acceptance on the
top of official external evaluations
Debt capacity ability to repay the loans is evaluated in accordance with valid local regulation in all cases. Income as well
financial expenditures must be verified through independent source (pure client statement is not acceptable). Credit bureau
information are always took into consideration (credit behavior, debt service). The 4-eye principle is followed in any case.
When fraudulent characteristics are identified, case is specially investigated by fraud department
Collateral valuation at loan origination:
The value used as reference by VUB is the lower of (i) purchase price and (ii) collateral value resulting from an external
valuation performed by an appraiser with valid license in the relevant area
Such value is reviewed by an internal appraiser who may validate such value or apply additional haircut
Process of collateral valuation is independent from credit decision (regulatory requirement)
Collateral revaluation:
Revaluation of Residential Real Estates (RRE) is performed on annually basis using a statistical model. Such model is
based on (i) external market data (GfK Purchasing Power Index (PPI)) and (ii) internal market data (valuation of comparable
properties made for recently approved applications)
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