Citibank update Foreign Lending policies
Citibank have released a policy update in regards to loans that are reliant on Income Earned in a Foreign Currency.
As you are aware there has been a big shake up in the industry with regards to foreign income applicants. We’ve seen the major banks in Australia recently tighten or withdrawn from lending to Overseas Borrowers. This tightening by our competitors has led to an increase in applications received for overseas borrower loans.
Accordingly given increasing difficulty in confirming income from certain countries and to maintain a balanced portfolio without further erosion to our service proposition, when a loan is defined as an Overseas Loan, for capacity purposes we will ONLY rely on currencies from the following list:-
- Canadian Dollar (CAD)
- Danish Kroner (DKK)
- European Union Euro (EUR)
- Hong Kong Dollar (HKD)
- Japanese Yen (JPY)
- New Zealand Dollar (NZD)
- Swedish Kroner (SEK)
- Singaporean Dollar (SGD)
- South Korean Won (KRW)
- Swiss Franc (CHF)
- UK Sterling (GBP)
- United States Dollar (USD)
In addition, no loan can be approved that relies solely on rental income.All documentation must be translated into English and all foreign income (both PAYG and self-employed) from the above list must be converted to AUD before inclusion in the capacity test calculator. The calculator will discount the income by 10%.Income earned in a foreign currency other than the currency of the applicants nationality (Australian citizens / Permanent Residency Status (PR) excepted) is NOT permitted for use in the capacity test.All other existing policy requirements surrounding this segment remain.This change is effective immediately for new business submitted after 5.00pm on 6th May 2016 and for pipeline business requiring re-assessment or re-approval.
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