ANNUAL REPORT 2006 - DG Hyp

From DG HYP’s perspective, immo express combines a
state-of-the-art direct banking solution with the benefits of
customer proximity, advisory skills and quality offered by
cooperative banks, without threatening their market position
through sheer price dumping. At the same time, the
immo express brand provides the strategic basis from
which further special products may be launched.
The new product was launched in November 2006,
with a successful pilot phase during which eleven cooperative
banks successfully tested the product, fine-tuning it
for full market rollout. Another 150 banks were included at
the beginning of 2007; as part of a second ‘wave’ to gradually
implement immo express throughout the cooperative
banking sector.
A new dimension in residential real estate finance:
capital market-oriented special products to enhance
the product offer
The second component of DG HYP’s strategy is geared
towards the so-called ‘subprime’ segment in residential
real estate finance. Besides the core group of target customers
with high creditworthiness, but low or no equity,
this segment comprises investors purchasing a property
(for example, as an investment forming part of their retirement
provisions), or customers outside the traditional age
groups for home loan financing. In particular, the latter
group includes the target customer group of those aged
55 or over, who will gain in importance due to demographic
changes.
These customer groups are outside the target matrix
used for standardised products. As a result, price competition
among banks is not quite as fierce in this segment. To
retain its ability to offer products to this segment which are
acceptable to credit risk managers, the bank must explore
all options available within the scope of active portfolio
management geared to the capital markets.
DG HYP has been building the requisite know-how for
several years. The bank is a well-established market participant,
leveraging its expertise gained in numerous securitisations
and portfolio transactions concluded since 2000.
Having bridged the credit and capital markets, DG HYP has
the skills and ability to develop financing solutions with
product specifications and terms to match the most diverse
risk profiles. By ensuring that the product development
process is in line with capital market requirements, a transfer
of credit risks incurred – through insurance, securitisation,
or portfolio transfer – is possible at adequate prices,
at all times.
Building on this foundation, DG HYP has developed a
range of special products which cooperative banks would
not be able to realise themselves, given their lack of direct
capital market access. Linking the distribution power of
cooperative banks with DG HYP’s portfolio management
expertise has enabled the German cooperative banking
sector to offer a comprehensive and competitive home
loan financing product range.
Deutsche Genossenschafts-Hypothekenbank AG | Annual Report 2006
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