Westpac Singapore's decision to exit from the mortgage business is leaving borrowers in the lurch.
Westpac Singapore recently notified 300 customers about its decision to unwind its loan portfolio. These outstanding loans relate to properties in Australia and New Zealand.
Westpac's Singapore office, which houses the Asia headquarters of Australia's oldest and second largest bank Westpac Banking Corp, gave the mortgagors six months (till end September) to repay or refinance the loans, according to a report in «Business Times» (behind paywall).
Demand Sent
Early May, the bank followed up with a formal demand for payment from some customers, reminding them of the terms of the facility. If the amount was not paid, the bank would take the client to a court or take possession of the related property. The demand notice also said that if the outstanding loan was not cleared, it intended to notify a credit reporting agency of the default by the customer.
Options for the affected customers include a «non-exclusive, non-binding arrangement» with OCBC in Singapore, to assist with local refinance options, subject to the latter's loan application process, credit criteria and relevant terms and conditions.
Consolidation Wave
The bank's decision to close its investment property loan book in Singapore as well as in Hong Kong was made «after careful consideration of commercial and strategic factors, including our ability to service this market competitively», the «Business Times» reported. It has since stopped offering new loans in 2016.
Observers say that the move by Westpac appears to be a continuation of the consolidation wave in Asia's private banking space, especially at a time when assets under management (AUM) growth is slowing while regulatory challenges gain pace.
Similar Moves
A few years ago, the Royal Bank of Scotland's Singapore branch also exited the mortgage business here but made arrangements to transfer existing mortgage loans to its Isle of Man branch.
In 2017, Singapore's DBS Bank concluded its buyout of Australia's third largest bank ANZ's (Australia New Zealand Banking Group) wealth management and retail banking business in five markets including Singapore and Hong Kong.
