CHEVY CHASE, MD – (March 10, 2015) – An annual Capital One Bank survey found that most (69 percent) asset-backed securities professionals expect increased competition in 2015, one of several industry challenges noted by attendees at ABS Vegas 2015. Capital One Bank surveyed professionals from various asset classes at the event to gauge their attitudes and opinions related to industry issues in the coming year.
Those surveyed also shared concerns over more lenient underwriting standards and shared a more pessimistic outlook on credit quality compared to 2014. More than half (51 percent) of respondents said they expect underwriting standards to loosen in 2015. In comparison, only 11 percent of those surveyed expect standards to tighten, and 38 percent say they will remain the same.
Respondents also shifted views on credit quality from those surveyed at ABS Vegas 2014. While 48 percent of this year's respondents believe credit quality will remain the same in the next year, a much smaller percentage (23 percent) believe credit quality will improve – almost 20 percentage points lower than last year.
In line with 2014’s survey findings, nearly three-fourths of respondents (73 percent) expect increased regulatory requirements and associated expenses to be the most significant risk to their businesses in 2015, far exceeding concerns about a potential rise in interest rates (21 percent).
“Asset-backed securities professionals expect increased competition in the coming year to have an effect on underwriting standards and overall credit quality," said David Kucera, Managing Director, Commercial and Specialty Finance at Capital One Bank. “In this market, companies can benefit from an experienced banking partner able to deliver customized financing solutions tailored to their industry and growth plans."
Respondents anticipate the greatest industry growth to take place in esoterics (23 percent), marketplace lending (19 percent), residential mortgage finance (16 percent) and commercial loans (14 percent). Compared to last year's survey, more respondents predict the biggest growth will occur in auto finance (11 percent, up from 4 percent). In addition, 36 percent predict securitization issuance will be the fastest growing funding source for non-bank lending in 2015, followed by private equity (22 percent).
"Industry professionals continue to view increased regulation and related costs as a significant challenge," said Michael Szwajkowski, Executive Vice President, Commercial and Specialty Finance at Capital One Bank. “Capital One Bank is committed to helping companies navigate the opportunities and challenges across asset-backed finance in the coming year."
Capital One Bank’s Asset-Backed Finance team is dedicated to the lender finance market and partners with non-bank financial institutions to provide a variety of lending and financing products including asset securitization and interest rate hedging. Capital One Bank’s Commercial and Specialty Finance Business serves clients through a team of more than 200 associates with expertise in lender finance and non-bank financial institutions, asset based lending, technology, healthcare, security and defense, municipal finance, and equipment leasing and finance. Capital One Bank’s Commercial Business leverages a relationship-based banking model that seamlessly delivers an array of products and services including loans and deposit accounts, asset securitization, treasury management services, merchant services, investment banking, international services, interest rate hedging and correspondent banking. Note to Editors
Capital One Bank conducted a proprietary survey of conference attendees at ABS Vegas 2015 in Las Vegas, Nevada. Survey participants included professionals from various asset classes within the asset-backed securities industry, including auto finance, commercial loans, credit card debt, equipment finance, esoteric/off-the-run, residential mortgage finance and other consumer debt. Percentages are based on 115 responses.
About Capital One
Capital One Financial Corporation (www.capitalone.com) is a financial holding company whose subsidiaries, which include Capital One, N.A., and Capital One Bank (USA), N. A., had $205.5 billion in deposits and $308.9 billion in total assets as of December 31, 2014. Headquartered in McLean, Virginia, Capital One offers a broad spectrum of financial products and services to consumers, small businesses and commercial clients through a variety of channels. Capital One, N.A. has branches located primarily in New York, New Jersey, Texas, Louisiana, Maryland, Virginia and the District of Columbia. A Fortune 500 company, Capital One trades on the New York Stock Exchange under the symbol “COF” and is included in the S&P 100 index.
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