Looks like finpension may enter the mortgage business (link)
Für weiteres Wachstum setzt Finpension auch auf neue Geschäftsfelder. Das Unternehmen strebt weiterhin eine Banklizenz an und prüft zudem den Einstieg ins Hypothekargeschäft. «Gerade bei Hypotheken sehen wir grosses Potenzial», wird Gründer und Verwaltungsratspräsident Beat Bühlmann in der Medienmitteilung zitiert.
Technical beginner question: Where does Finpension get the money to lend for a mortgage? I was under the belief that 3a providers cannot simply lend out the 3a money lying around because it is specially protected. But perhaps I am confusing something here.
Or with a banking licence can they lend the money from another bank and add a margin?
Can’t they just package the mortgages into a nice investment and have the 3a customers buy it?
on the phone, Finpension confirmed it is coming this summer, but they will take over existing mortgages (renewals I believe?) not new mortgages.
I assume (didn’t ask), they might have made some deals with pension funds.
But I don’t think they actually offer anything yet, right, they are just thinking about it?
with their current interest rates, I think this really brings down their attractiveness a lot. For a 100% LTV, you need > 16% in pillar 2 and another >16% in vested benefits.
Or they want to focus on renewals and not first time buyer with this move, to attract a big chunk to pillar 3 and vested benefits
You’re right. I have adjusted the title.
As I mentioned in the other thread. I talked to Finpension on the phone a few days ago, they told me that they are planning to launch it this summer. But they will take over existing mortgages (renewals I believe?), and not new mortgages.
I assume (didn’t ask), they might have made some deals with pension funds.
Somehow that doesn’t sound so great for the customer. That would be a conflict of interest, just like any traditional bank has. Then you’d no longer promote the best product, but your own.
It seems to me that Finpension’s goal has always been to obtain a banking licence, in particular to become a new player in the market and offer an alternative to traditional banks. Unlike VIAC or NEON, which are “fintech companies” backed by traditional banks, Finpension aims to become a bank in its own right. That is my understanding of this company’s ambitions.
If they want to offer mortgages, they are following in the footsteps of VIAC.
VIAC is actually WIR, isn’t it? I mean WIR owns them, don’t they?
Neon is not backed afaik, it’s an independent software company providing a service using HBL backend as a provider.
Edit: as of July. 25, WIR owns 40% of VIAC AG which uses WIR’s 3a foundation and 100% of VIAC Invest AG providing VIAC Invest product.
From a banking side, Neon is backed by Hypothekarbank Lenzburg.
Yes, that’s HBL I was quoting.
Depends on what you name backed.
They use their backend banking system.
In that sense, they are a customer of HBL, and a proxy for their customers.
They are not supported by HBL as far as I know.
VIAC is a service offering from WIR, first to their foundation and then via VIAC Invest AG (for their robo) owned by WIR.
Same for Yuh which is a product from Swissquote provided by a company owned by them (formerly together with PostFinance).
Neon is on its own.
If I remember correctly, WIR holds some shares of VIAC AG but there are other shareholders (presumably the founders, maybe others). I don’t think the details are public, though, and it’s possible that WIR bought out the other shareholders at some point, but I don’t remember seeing such an announcement.
WIR’s Terzo foundation is used for VIAC 3a. But VIAC Invest might be less connected to WIR than VIAC 3a.
Bank WIR, which holds a 40% stake in VIAC AG, highlighted the company as an increasingly important source of income in its annual report.
The fund management company VIAC Invest AG is wholly owned by Bank WIR.
Aren’t we in a debt based system and the banks are the ones who actually “create” the money?
Yes, but the money is “created” because banks lend out the money that others deposit (bank account, etc.) there and do not currently need. At this moment, the money exists on the account statement of the account holder from which the bank took the money and on the account statement of the person who borrowed the money. That is why banks are so vulnerable to bank runs (see Credit Suisse). In this case, however, Finpension only has pension money.
Hence my surprise:
pension money is even better than banks as bank deposits can be withdrawn on demand whereas pension money is stuck until retirement.
since finpension is in the business of having you invest your pension money, it is a natural fit to have its pension customers invest into the mortgage bonds.
you potentially have cheap capital and make money on both sides of the deal.
If this is an active decision, meaning that as a 3a user I can choose Finpension’s own real estate fund, then that’s completely fine. But that’s not what I meant. Finpension also offers 3a account solutions. This means that Finpension also has a lot of money lying around. I don’t use this (I have invested 100% of my funds). My question is: where does the money for the mortage come from? Can Finpension invest part of the 3a account money once they are a bank? As a bank does with a normal non-3a account, for 3a I dont know. That would be an additional risk for 3a account customers. Because there is no protection up to CHF 100,000 for 3a account solutions (Apparently, there is coverage up to CHF 100,000).
I realised that I’m having a hard time explaining what I meant. I’m not a native English speaker.
Actually lending creates bank deposits. It’s illegal to lend out depositors money otherwise there will be a run on the banks, which is how banks used to work. This is only the case in P2P lending.
Generally once a banking licence or licence to lend is granted, the institution will debit and credit the bank and borrower accounts in opposite proportions
