Does the surge in real estate rates allow banks to increase their margins? What do they really get when they give you credit? Jackpot or simple call product to recruit new customers, the point on what banks really have to gain on the mortgage market.
Does your mortgage really make your banker richer? According to some specialists in the sector, the loan is above all a means for banks to attract new customers. An analysis that rather joins Pierre Chapon, the co-founder of the broker Pretto.
“French banks are generalists, he says. The mortgage is a way for them to stand out and gain market share. Few people go around the banks to open a savings account. The sector is therefore highly competitive, which means that France has rates among the lowest in Europe.”
How do banks finance your loan?
To understand what a bank earns on a home loan, you need to know how it finances it. “It relies on savings and on money it borrows on the market, explains Pierre Chapon. However, the cost of this depends on the rate applied by the Banque de France. After having long been close to 0%, even negative, it is now around 2%.
Asked by MoneyvoxPascale Sciacaluga, commercial director of Crédit coopératif, argues that “for a bank to make money, a minimum of two points of intermediation margin is needed (the difference between the interest paid by individual borrowers and the cost of the resource that allows the bank to provide credit, editor’s note). But in recent years, we have been very far from it.”
Fluctuating margins
A point of view nuanced by Pierre Chapon who believes that there are periods “when the banks keep an interesting margin”. “This was the case for example at the end of 2021, he specifies. Even if the rates were low, the money was inexpensive for the banks and there were a lot of loan requests. Today, the margins are much higher. limited. But in general, mortgages are not a cash machine for banks.”
Our colleagues from Moneyvox also quote a report by the Prudential Control and Resolution Authority (ACPR) published in September 2021 which attempts to assess the margins made by banking institutions on these loans. According to this, the net margin (gross margin, less management fees and the cost of risk) on new housing loans was 0.45% in the first quarter of 2021 compared to 0.12% in the first quarter of 2020.
At the time, this meant “that each loan of 200,000 euros issued by a bank brought him an average of 900 euros”, report our colleagues.
How do banks get there?
If banks, like other companies, do not communicate the positions that allow them to make margins, it is the whole of the banking relationship that it tries to establish with its customers that allows it to navigate. .
“The bank earns money on the insurance it offers to its customers and in particular on borrower insurance, explains Pierre Chapon. There are also financial flows by card and all the services they can offer.”
–
