How this non-bank got customers off hardship support

“Last year, up to 20% of our book was enquiring about support”

How this non-bank got customers off hardship support

When New Zealand went into Alert Level 4 for the first time last year, lenders immediately offered a range of support options to customers struck by financial hardship - however, non-bank lender Resimac said that enquiries around support have been substantially lower this time around.

New Zealand country head Luke Jackson said that around a fifth of Resimac’s customers enquired about payment deferrals in April 2020, but Resimac took a stance of assessing each customer’s circumstances individually - something he said had paid off for the customers in the long run.

“Going back to last year, we were like any other major bank, where up to 20% of our book was enquiring about hardship support,” Jackson said.

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“We put people on to structures that worked for them and were appropriate for their circumstances, we didn’t just give everyone six months of deferred payments upfront. That meant that we got people off those hardship measures a lot sooner than the main banks, and right now, we haven’t really seen an increase in enquiries.”

“It’ll be interesting to see how things progress with Auckland going into another couple of weeks of Level 4,” Jackson said.

“We may see some further increase there, but we’ll be looking at that as it comes.”

When it comes to business growth, Jackson noted that despite all predictions, interest in property and value growth both saw a significant boom over the last year. This led to Resimac picking up a substantial amount of new business, and advisers have increasingly been looking at the non-bank space as a strong alternative to the main lenders.

“We obviously had some pretty healthy value growth last year, and there was more security around people’s incomes in terms of reduced unemployment,” Jackson said.

“So, there were some good factors there, and people were more interested in buying property.”

“We’ve seen a lot more ‘prime deals’ coming our way over the last 12 months, and those are typically the main bank deals,” he explained.

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“I think advisers have looked at us as an alternative to the banks, as opposed to the old way of looking at non-banks, which was only when the main banks said ‘no’. Now, when the main bank says ‘yes’, alternative lenders can often give a ‘better yes.’ So we have seen a big increase in our prime offering, so there is still a healthy demand from people to buy - the biggest issue tends to be around just finding the stock.”

“It’ll be interesting to see how it goes as we head into spring, as that’s normally when we get a slight increase in stock listings,” Jackson concluded.

“Last year was a huge year for capital growth in property, so you obviously wouldn’t want too many of those on top of each other. It’s prudent to have a bit of slowdown, but we’re still seeing a lot of people looking to buy, and looking for lenders who can assist them in doing that.”