Post on 25-Dec-2015
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COMPARATIVE STUDY OF HOUSE LOANS PROVIDED BY COMMERCIAL BANKS IN
ISLAMABAD
MORTGAGE- A ROAD TO DEVELOPMENT
Between 1997 and 2006, the price of the typical American house increased by 124%
The USA home ownership rate increased up to 69.2% in mid 2008.
Household debt grew to $14.5 trillion in midyear 2008, 134% of disposable personal income.
MORTGAGE- OR A DEAD END
If mortgage is not handled properly it become a dead end
For example in America: A loss of 1.3Trillion Dollars More than 100 banks files bankruptcy This takes the whole world into recession ARM rates are used
GDP of Pakistan is 2.4%
Per capita income is 1042 $
Inflation is 19.3%
Foreign Reserves become 11.3 billion $
Source: Economic Survey of Pakistan
ECONOMY OF PAKISTAN-OVERVIEW
Present Housing Stock Urban Rural Pacca Semi-Pacca Kutcha
19.3 Million32.3%
67.7%
21.0%
40.0%
39.0%
HOUSING SECTOR IN PAKISTAN
Household sizeOccupancyHousing Shortfall Annual RequirementAnnual ProductionRecurring Annual
Shortfall
6.6 Persons per house
3.3 Persons per room
4.3 Million
570,000
300,000
270,000
Source: National Housing Authority, Ministry of Housing & Works
CONT…
Municipal Area Rural AreaTotal Area
440.3 Sq.km
465.7 Sq.km
906.0 Sq.km
Source: CDA, Islamabad
AREA OF ISLAMABAD
Existing Housing units in Sectors
Required Housing DemandExisting ‘Shortage Additional Demand per year
75,000 units
125,000 units
50,000 units
4,000 units
Source: CDA, Islamabad
HOUSING SECTOR IN ISLAMABAD
Consumer Financing
CONSUMER FINANCING
HOME LOANS
PERSONAL LOANS
AUTO LOANS
CREDIT CARDS
Total Financing in housing finance in FY 2008-09 is Rs. 18 Billion
Share in Pie is 16.39%
Source: Deputy Governor State Bank of Pakistan Source: Economic Survey of Pakistan
CONSUMER FINANCING IN PAKISTAN
TOTAL CONSUMER FINANCING
24-Jun-09 31-Jul-09
28-Jun-09 5-Jul-09 12-Jul-09 19-Jul-09 26-Jul-09
24-Jun-09 - 5-Jul-09Bank Identification & Survey
5-Jul-09 - 12-Jul-09Documentation
12-Jul-09 - 19-Jul-09Analysis of data
19-Jul-09 - 26-Jul-09Comparative Study 26-Jul-09 - 31-Jul-09
Project Report Submission
PROJECT TIMELINE
Total banks selected = 34
Total Banks visited = 34
Banks provide services = 20
Banks not provide services = 14
IDENTIFICATION OF BANKS
Public banks
Private banks
Islamic banks
Foreign banks
CATAGORIZATION OF BANKS
Data collected from banks i.e. Brochures
Data collected from internet
Takes one week to complete
DOCUMENTATION
Variable definedMark-Up RatesFinancing LimitProcessing feeTenureAge limitBTF
ANALYSIS OF DATA
COMPARATIVE STUDY
MARK UP RATES
16.7215.22
Bank
15.2217
14.2214.2217.2215.22
15.4716.2217.2215.2215.2216.22
15.7215.22
Mark-up For Salaried
person(%)
Mark-up For Businessman(%)
1616.2219.2217.5
15.2215.22
14.2216
14.2214.2217.2215.22
15.4716.2217.2215.2215.2215.22
FAYSAL BANKASKARI BANKUBLHBFC
1616.2219.22
1715.2215.22
DUBAI ISLAMICMEEZANBANK ALFALAHBANK ALHABIBSONERI BANKKASB BANK
DAWOOD ISLAMIC
NBPBOKBOPSTD CHTDAL-BARAKABARCLAYSRBSBANK ISLAMIEMIRATES GLOBAL
NBPBOK
BOP
STD CHTD
AL-BARAKA
BARCLAYS
RBS
BANK ISLA
MI
EMIR
ATES GLO
BAL
DAWOOD IS
LAM
IC
DUBAI ISLA
MIC
MEEZAN
BANK ALF
ALAH
BANK ALH
ABIB
SONERI BANK
KASB BANK
FAYSAL BANK
ASKARI BANK
UBL
HBFC0
5
10
15
20
25
MARK-UP RATES
SALARIED BUSINESSMAN
GRAPH
PROCESSIG FEE
UBL 5,000
PROCESSING FEE
FB 5,300ACB 5,850
SBL 5,000KASB 5,000
BALFH 15,000PRIVATE BANKS
BALH 3,500
DIBPL 10,000MB 5,000
EGIBL 5,000DIBL 5,000
RBS 5,000ISLAMIC BANKS
BI 5,000
ABIB 5,000BARC 5,000
HBFC 10,000FOREIGN BANKS
SCB 10,000
BOK 10,000BOP 2,950
PUBLIC BANKS
NBP 6,000
GRAPH
NBP BOK BOP HBFC SCB AIB BCB RBS BIP EGIBL DIBL DIBPL MBL BAL BAH SNR KASB FABL ASK UBL0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
PROCESSING FEE
Processing Fee
MAXIMUM FINANCING LIMIT
NBP 35,000,000BOK 10,000,000BOP 10,000,000HBFC 7,500,000
SCB 10,000,000AIB 20,000,000BCB 50,000,000RBS 50,000,000
BIP 10,000,000EGIBL 50,000,000DIBL 20,000,000DIBPL 50,000,000MBL 10,000,000BAL 10,000,000
BAH 10,000,000SNR 10,000,000KASB 20,000,000FABL 1,000,000ASK 30,000,000UBL 30,000,000
PUBLIC BANKS
FOREIGN BANKS
ISLAMIC BANKS
PRIVATE BANKS
MAXIMUM FINANCING LIMIT
NBP BOK BOP HBFC SCB AIB BCB RBS BIP EGIBL DIBL DIBPL MBL BAL BAH SNR KASB FABL ASK UBL0
10,000,000
20,000,000
30,000,000
40,000,000
50,000,000
60,000,000
MAXIMUM FINANCING LIMIT
MAXIMUM FINANCING LIMIT
GRAPH
MINIMUM FINANCING TENURE
NBP 3BOK 2BOP 3HBFC 3
SCB 1AIB 3BCB 3RBS 3
BIP 2EGIBL 3DIBL 3DIBPL 3MBL 3BAL 3
BAH 2SNR 2KASB 3FABL 3ASK 3UBL 3
FOREIGN BANKS
ISLAMIC BANKS
PRIVATE BANKS
PUBLIC BANKS
MINIMUM FINANCING TENURE
NBP BOK BOP HBFC SCB AIB BCB RBS BIP EGIBL DIBL DIBPL MBL BAL BAH SNR KASB FABL ASK UBL0
0.5
1
1.5
2
2.5
3
3.5
MINIMUM FINANCING TENURE
Minimum Financing Tenure
GRAPH
MAXIMUM FINANCING TENURE
NBP 20BOK 10BOP 20HBFC 20
SCB 20AIB 20BCB 20RBS 20
BIP 20EGIBL 20DIBL 20DIBPL 20MBL 20BAL 20
BAH 20SNR 20KASB 20FABL 20ASK 20UBL 20
MAXIMUM FINANCING TENURE
FOREIGN BANKS
ISLAMIC BANKS
PRIVATE BANKS
PUBLIC BANKS
NBP BOK BOP HBFC SCB AIB BCB RBS BIP EGIBL DIBL DIBPL MBL BAL BAH SNR KASB FABL ASK UBL0
5
10
15
20
25
MAXIMUM FINANCING TENURE
Maximum Financing Tenure
GRAPH
MINIMUM AGE LIMIT
NBP 21BOK 18BOP 25HBFC 18
SCB 25AIB 25BCB 23RBS 25
BIP 25EGIBL 22DIBL 24DIBPL 25MBL 25BAL 25
BAH 23SNR 25KASB 21FABL 25ASK 21UBL 23
MINIMUM AGE LIMIT REQUIREMENTS
PUBLIC BANKS
FOREIGN BANKS
ISLAMIC BANKS
PRIVATE BANKS
NBP BOK BOP HBFC SCB AIB BCB RBS BIP EGIBL DIBL DIBPL MBL BAL BAH SNR KASB FABL ASK UBL0
5
10
15
20
25
30
21
18
25
18
25 25
23
25 25
22
2425 25 25
23
25
21
25
21
23
MINIMUM AGE LIMIT
MINIMUM AGE LIMIT
GRAPH
MAXIMUM AGE LIMIT
NBP 65BOK 55BOP 57HBFC 60
SCB 65AIB 60BCB 60RBS 65
BIP 65EGIBL 60DIBL 65DIBPL 65MBL 65BAL 65
BAH 60SNR 60KASB 60FABL 60ASK 65UBL 65
PUBLIC BANKS
FOREIGN BANKS
ISLAMIC BANKS
PRIVATE BANKS
MAXIMUM AGE LIMIT REQUIREMENTS
NBP BOK BOP HBFC SCB AIB BCB RBS BIP EGIBL DIBL DIBPL MBL BAL BAH SNR KASB FABL ASK UBL50
52
54
56
58
60
62
64
6665
55
57
60
65
60 60
65 65
60
65 65 65 65
60 60 60 60
65 65
MAXIMUM AGE LIMIT
MAXIMUM AGE LIMIT
GRAPH
BTF FACILITY
PUBLIC BANKS
NBP 1
BOK 0
BOP 0
HBFC 1
FOREIGN BANKS
SCB 0
AIB 1
BCB 1
RBS 1
ISLAMIC BANKS
BIP 1
EGIBL 1
DIBL 1
DIBPL 1
PRIVATE BANKS
BAH 0
SNR 1
KASB 1
FABL 0
NBP BOK BOP HBFC SCB AIB BCB RBS BIP EGIBL DIBL DIBPL MBL BAL BAH SNR KASB FABL ASK UBL
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1
BTF
BTF
GRAPH
RESULT OF COMPARATIVE STUDY
The Royal Bank of ScotlandDubai Islamic Bank Private Limited
BEST SUITED BANKS
Mark-Up Rate: KIBOR + 3.25%Loan Range: PKR 0.5 million to PKR 50
millionLoan Tenure: 3 to 20 yearsQualifying Age: 25 to 65 years upon loan
maturityBTF Facility is also available
The Royal Bank of Scotland
Mark-Up Rate: KIBOR + 3%Loan Range: PKR 1 million to PKR 50
millionLoan Tenure: 3 to 20 yearsQualifying Age: 25 to 65 years upon loan
maturityBTF Facility is also available
Dubai Islamic Bank Private Limited
COMPARISON BETWEEN PAKISTAN & INDIA
MARK-UP RATES
PROCESSING TIME
TENURE
BTF FACILITY
AGE LIMIT