Abu Dhabi Finance not to change its credit policy

Abu Dhabi Finance, a leading provider of mortgages in the emirate and a joint venture of five leading investment companies, has ruled out any immediate change in its credit policy.

The firm was launched by Mubadala, Aldar, Sorouh, TDIC and ADCB in November 2008 to support the Abu Dhabi's real estate market.

Its Chief Executive Philip Ward said the company has adopted the most customer-friendly policies despite the financial crisis. He said the company is sound financially and continues to review the market to provide the best mortgage services.

On the company's policy on LTV (loan to value), which some mortgage finance houses in the country have brought down the percentage to 65, Ward told Emirates Business: "Our maximum LTV is 85 per cent. We are not as low as 65 per cent. For one individual 65 per cent may be reasonable and realistic figure.

"It is about understanding you as an individual – the risk you represent, your capabilities to be able to support a mortgage and for us making sure the offer we put to you is going to be something you can support over the long term."

About the company tightening its credit policy, he said their policies were always under constant review. "It would be a full hard for a lender which has credit policy and says that's it. It is a policy for now, tomorrow, the day after, and ever more. We look at our credit policy almost on daily basis to make sure it is right for the market."

Ward said the company policy was to have close communication with its clients to understand and know about their needs and mortgage support capabilities.

"We would sit down with our customer as an individual and look to apply it is a policy, it is not the decision tool. It is a policy within which we work. We want to make sure that we come up with the right decision for our clients. Yes we want to be within the policy, but the policy does not rule the decision process, it is part of it."

When asked about declining LTV percentage in the local market affecting the realty sector, Ward said he could not comment what other banks have done with their credit policy. "We are very happy with the approach we take."

When asked if there is any plan to increase the LTV to 90 per cent, he indicated it cannot be ruled out but said it will remain at 85 per cent for the moment.

"Eighty-five is the LTV what we are working to at the moment. It is always under review. We don't have immediate plans to increase it to 90 per cent, but it is something that we under regular review."

On interest rates, Ward said they remain at the same level as set when the company was launched.

"Our interest rates have not been changed since our launch. We have got an interest rate range between 8.5 per cent and nine per cent. By all means you do your investigation of what the rest of the market is charging. My marketing intelligence tells me that industry average at the moment in the UAE is in the range between 8.75 per cent and 9.5 per cent. So we are towards the bottom of that range. Yes, there are deals that can be less than that. That is an average."

He said like LTV, the interest rates are also regularly reviewed as per the market requirement. They remained at the bottom line as compared to other competitors in the market. "Our pricing is always regularly under review. Interest rates for the last three to four months, as an industry, have risen rather than fallen. So we kept ours where we started.

"Pricing is something that we consistently keep under review. We want to be price competitive, but our prime approach is the strength of customer services."