Sydbank and Jyske Bank, two large regional banks in Denmark, has announced a agreement with BRF Kredit, an independant Mortgage Bank in Denmark, to use BRF Kredit for funding of some of their mortgage portfolio. Both banks are members of Totalkredit and originates currently SDO mortgages through Totalkredit, that also services the mortgages.
However both banks also have mortgages funded by deposits and other sources for a total of more than 20 billion DKK. With this agreement the banks opens an opportunity for an alternative joint funding channel for those mortgages, based on SDO legislation , and by doing so, they get access to a capital market that still seems liquid, and at the same time reduces the requirement for capital in the banks. The banks will continue to service these loans.
“The benefits Sydbank and Jyske Bank will achive with this agreement, is exactly what we have argued foreign banks will achieve by joining forces with Absalon Project to establish a local mortgage bank, that offers funding after the principles in the Danish Mortgage Model” explains Alan Boyce, CEO of Absalon Project.