The Singapore branch of Westpac Private Bank is upbeat about the prospects of its property loans business here, which has tripled in volume in the last year.
Sean Straton, head of premium client group in Singapore, explained that 65 percent of revenue from Westpac Private Banking came from associated fees and lending generated by providing multi-currency financing to its clients wanting to acquire homes in New Zealand and Australia. This segment has increased by almost 300 percent in 2009.
Majority of the loans are taken up by Asian-based costumers who view Australia as a “safe haven” with its strong economy, said Mr. Straton.
“Most of our clients have some level of interest and typically some connection with, Australia and New Zealand. For example, they might have lived there, have permanent residency status, or their children might be studying there,” he said.
The bank was caught off guard by the new measures implemented by the government to cool down the property market.
Minimum occupation period is now being disallowed on the concurrent ownership of private residential properties and HDB flats, both in the country and abroad.
However, Mr. Straton claimed that this should not affect the bank’s property lending business as its costumers should not be affected by the government’s measures.
“Due to a high interest in Westpac products from our clients, we are considering a new investment product set which may have characteristics of a term deposit with yield enhancing components linked to an underlying index, for example the inflation rate,” said Mr. Straton.