Bloomberg News

Dutch Regulator Sees Bigger Risk of Property Finance Cartels

October 13, 2011

(Updates with ING, Rabobank market shares in third paragraph.)

Oct. 13 (Bloomberg) -- Dutch real-estate financing is becoming increasingly consolidated as bigger firms gain at the expense of smaller ones, narrowing options for consumers and companies, the national competition regulator NMa said.

“The limited number of parties offering real-estate financing and the lack of smaller providers and new entrants means that NMa will closely watch developments,” the regulator said in a statement today. It will pay special attention to refinancing and syndicated loans, the watchdog said.

A study commissioned by NMa showed ING Groep NV’s Real Estate Finance unit increased its market share in new loans to 48 percent in 2009 from 27 percent in 2005. Rabobank Groep’s FGH Bank had 23 percent of this market, up from 18 percent four years earlier. Their growth came at the expense of smaller companies including SNS Reaal NV and NIBC Bank NV, NMa said.

Competitive pressure is limited as the joint market share of smaller players isn’t growing and few new parties entered the market, NMa said. The financial crisis may be making it harder to attract funds and new capital requirements can lead to higher financing costs, according to the regulator.

Another factor potentially limiting competition is that it isn’t easy for clients to switch to another property finance offerer, NMa said.

Strategy Unchanged

“Our strategy remained unchanged and we continued to facilitate our clients during the financial crisis,” said Anneke van der Galien, a spokeswoman for ING Real Estate Finance in The Hague. ING is studying the report, she said. Fransce Verdeuzeldonk, a spokeswoman for Utrecht-based Rabobank, wasn’t immediately able to comment.

Taking into account volumes of total outstanding loans, the differences are smaller, NMa said. ING’s total loan portfolio was 18.4 billion euros ($25.2 billion), while FGH Bank and ABN Amro Group NV had 17.2 billion euros and 13.4 billion euros, respectively.

The regulator also noted the study was based on data ending in 2009. Possible changes in the market after the economic recovery in 2010 aren’t visible yet, NMa said.

--Editors: Stephen Taylor, Steve Bailey

To contact the reporters on this story: Jurjen van de Pol in Amsterdam at jvandepol@bloomberg.net; Maud van Gaal in Amsterdam at mvangaal@bloomberg.net

To contact the editors responsible for this story: James Ludden at jludden@bloomberg.net; Frank Connelly at fconnelly@bloomberg.net


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