RPT-Fitch Affirms Quion's Dutch Residential Primary and Special Servicer Rating
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Sept 9 (Reuters) - (The following statement was released by the rating agency)
Fitch Ratings has affirmed Quion Groep B.V.'s (Quion) Dutch Residential Primary and Special Servicer Ratings at 'RPS2' and RSS2', respectively.
The affirmation reflects the increased portfolio value largely due to the insourcing of a new portfolio of EUR4.9bn consisting of both consumer loans and mortgages in June 2013. In Fitch's view, this will help to reduce the impact of clients transferring assets away from the company in the mid-term. Furthermore, Quion managed to maintain steady origination levels in 2012 against the current decline in origination levels in the Netherlands, which helps maintain stable income from primary servicing.
In addition, the take on of consumer loans enables Quion to broaden its servicing expertise in the competitive market environment for third-party servicing mandates in the Netherlands and demonstrates its strong commitment to business development.
The rating is further supported by the company's robust risk management framework. Quion uses a combination of internal audit resource from its parent, Blauwtrust Group (BTG) and a Big Four consultancy to maintain an ISAE3402 Type II certification. In May 2012 risk, compliance and internal audit functions have been centralised within one team at BTG/group level Fitch considers this model beneficial as it creates synergies and enables knowledge share between the related areas.
With regards to its financial condition Quion does not benefit from the support of a rated parent. The company showed a profit for the second consecutive year after posting a loss in 2010 and has credit lines at its disposition.
The affirmation of the special servicer rating also incorporates Quion's innovative servicing strategies. Quion faces the challenging environment in the Netherlands with intense borrower contact strategies. The company starts to enhance its servicing offering with the recent roll out of a pilot focussing on the prevention of arrears.
Fitch believes that Quion's systems are fit-for-purpose. The company benefits from a modern data warehouse that provides good data quality to external parties. The Quion Service Platform has now been in place for 12 months and efficiency gains still need to be proven in the short and mid-term. In Fitch's opinion, the mid- and back-office platform has scope to mature further within the next one to two years.
At end-December 2012, Quion's residential servicing portfolio totalled EUR25.9bn (2011: EUR25.0bn) comprising 148,883 loans (2011: 145,686). RMBS represents 62% (2011: 56%) of total by value. While Quion acts as primary servicer of the whole portfolio, the company is also named special servicer on the majority of its portfolio/ transactions totalling EUR22.8bn (2011: 20.97bn).
Fitch used its global servicer rating criteria to analyse the servicer's operations and financial condition, including a comparison against similar Dutch servicers as part of the review process. The analysis is based on information provided to Fitch by Quion.
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