GMAC-RFC’s gross advances totaled £6.34bn, virtually identical lending to Bradford & Bingley and Britannia, which will make the league of top ten lenders very close when the CML publishes it in the summer. The accounts also show pre-tax profit to be up 65% to £36.2 million.
GMAC-RFC’s business model involves the trading of assets generated in order to more efficiently use the capital allocated by its parent. In 2004 GMAC-RFC traded £3.6bn on the capital markets via its securitisation programme, and £2.6bn to other lenders via whole loan sales (both new records). In so doing, GMAC-RFC’s UK business was again Europe’s 4th largest issuer of residential mortgage backed securities in 2004, and the UK’s leading trader of whole loan portfolios.
Stephen Knight, Executive Chairman at GMAC-RFC commented, “We believe that our strategy of offering innovative and highly competitive mortgages for everyone through a fast, automated and easy process continues to find resonance and high demand amongst the intermediary community.”
As for the future of the lending market, Knight continued, “We expect the market slowdown to continue. There has been much commentary about the fact that lending to first time buyers is currently below the long term trend; however GMAC-RFC’s view is that there are lifestyle as well as affordability issues underpinning this statistic. First time buyers choosing to delay their entry into homeownership, and living in privately rented accommodation, are fuelling the growth in the buy-to-let sector.”
In 2004, GMAC-RFC also saw the launch of its automated decisioning technology. After a long and successful pilot, intermediaries have welcomed the new system that brings certainty and immediacy to the market. The new technology has been a key factor in GMAC-RFC’s success in 2004 because, unlike all other UK lenders who have stuck with old-fashioned “decisions in principle”, GMAC-RFC offers a binding yes/no credit decision involving a higher level credit search and full credit score. This gives intermediaries an immediate and certain answer within an average of 35 seconds after answering an average of 14 questions.
Stephen Knight concluded: “In a highly competitive market, we produced outstanding results for 2004 by adding value to our customers. 2005 will deliver even more competitive market conditions and only the fittest will survive. We shall continue to use our global resources, combined with local knowledge, to grow our business, widen our product range and better serve our customers.”
