Notwithstanding the almost structural tightness in the Dutch capital
market the coverage of our needs for finance did not present big
problems in the past year. A total of guilder-denominated funds of
1.072 million was attracted, of which 605 million through the issue of
bonds, 60 million through the placement of a loan in the form of
Euronotes, and 407 million in the form of private loans.
Interest rates on bonds varied from 9!4% to 12% in 1980.
A gratifying feature is the increasing participation of our branch offices
in the issue of bonds.
Owing to the growth of our international business - given the principle
pursued within our company of avoiding currency risks - a call was
made for the first time on the Swiss and Belgian/Luxembourg capital
markets, through the issuance of a Sw.Fr. 50.000.000 6% debenture
loan 1980 due 1986-90 and of a L.Fr. 250.000.00011 Vi% debenture loan
1980 due 1985.
Mortgage business
In the beginning of 1980 interest rates in the mortgage market reached
the high level of about 12% in a short period of time, a rise of about 2%
compared to the end of 1979. After a slight drop the interest rate
maintained ata level of over 11% forthe rest of the year, a level (too)
high for many potential borrowers.
Loan applications accepted amounted to 780 million (in 1979: 1.242
million).
The number of applications accepted was 2.789 (in 1979: 3.443).
The net increase in the mortgage portfolio was 425 million (in 1979:
693 million). The amount of mortgages advanced totalled 931
million (in 1979: 1.184million)and redemptions received amounted to
506 million (in 1979: 491 million). Although in thisyearthe net
portfolio increase was substantially less than in the preceding year and
ou r market share was exposed to some pressure, we are not dissatisfied
because we managed to maintain our production on the basis of a
reasonable margin.
In the Netherlands the eighties started off by declining yields in private
industry, mounting unemployment, increasing plant closures and, in
the private sphere, a reduction in net incomes. Either directly or
indirectly, these factors exert their influence on the granting of
mortgage credit. For instance, the increased credit risks led to a larger
number of rejections. In addition, the credit risk increased for part of the
existing portfolio. This made it necessary - as has already been
observed - to supervise a number of our debtors more intensively.
To enable us to cope with this development we further extended in 1980
the already solid base for risk control through more intense internal
specialization. In addition, measures were taken to bind the market
segments, where our specialists' knowledge is frequently used, more
definitively to ourselves. Within this framework our country-wide
inspection apparatus was expanded and a stronger emphasis placed on
construction management as part of the finance operation.
Market segments in which our specialists' knowledge could be used to
the fullest extent were those of portfolio financing of investors as well as
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