2010 marked our 45th year of operation as a mortgage company.   As obtains with such maturity, it is opportune that we consider re-evaluation and re-assessment of our place in the market based on recent developments in our own environment and in the wider global economy.

Thus, the theme of our three-year strategic period to 2012 is titled, Continuity, Collaboration, and Cohesion - the road to sustainable growth. In leveraging key stakeholder relationships, we will consolidate our collective strengths to refine and re-define the operations of the mortgage market in Trinidad and Tobago, to the benefit of all citizens. 

Financial Review 2010

Consolidated profit after tax for the year ended 31 December 2010 increased by $2.0M or 4% over the previous year, despite a decline in consolidated profit before tax year over year by $3.9M or 9.2%.  Recognition

of deferred tax losses has provided an enhancement to our results in the recent past.

This is considered a creditable performance in view of the sluggish economy and the highly competitive environment of the year past. Our stable profitability resulted largely from increased operational efficiencies and cost containment. In addition, the enhanced delinquency management system introduced in 2009 resulted in minimisation in the provisions required for loan impairment.

Net interest income declined by $1.6 million or 3.4% largely due to the burden of high cost debt which resulted in an increase in net interest cost of $18.0 million or 13.8%.  As a result of change in the national landscape, negotiations in respect of our financing arrangements were delayed or deferred.  The full impact of this was mitigated by close management of administrative and other expenses in a cost effective manner in spite of inflationary trends.

Our long term funding strategy remains focused on the conversion of short term debt to long term instruments with commensurate savings.  Options available for long-term financing through debt financing and collateralized mortgage instruments are receiving our attention. These initiatives should reduce our interest costs while enabling more competitive pricing of the mortgage product.

Total assets stood at $3.2billion as at 31 December 2010, 2.1% lower than the previous year.  This is reflected largely in the net impact of a $56 million or 2% net increase in mortgage balances offset by a decline of $134.6 million or 51.3% in cash balances as we utilised the funds raised in our bond issue of December 2009 to meet operating requirements including debt obligations.

Mortgage Underwriting

The expansion of our range of mortgage products coupled with the removal of loan limits improved our competitive standing.  During 2010, we issued 1,361 new loans for a total value of $386 million. Our mortgage portfolio remains the largest amongst financial institutions in Trinidad and Tobago, with a total of 15,085 loans for total value of $3.08 billion (including administered funds).

In keeping with our mandate to finance homes under the government’s housing programme, 62.3% or $85.5 million in loans granted for 2010 fell under the ‘approved mortgage company programme’, including developments of the Trinidad and Tobago Housing Development Corporation (HDC) and the Tobago House of Assembly – Division of Settlements and Labour. 428 loans valued $200.5 million were granted under our expanded range of products including house and land acquisition, repair and renovations and equity loans. Liquidity improvement has allowed us to re-introduce the underwriting of loans of any amount, on any residential property in Trinidad and Tobago. The total value of loan commitments as at 31 December 2010 is $336 million.

Emphasis was placed on customer outreach programmes during the year which included road shows and staff luncheon presentations. Our year-end promotion ‘Yule be home for Christmas’ featuring 100% financing under certain conditions, was very successful as the number of applications accepted were increased by 28% per month. While the promotion expired on 31 December, applicants were given commitments for funding expiring on 30 June 2011, affording ample time for an investment decision that would suit their needs. The year-end promotion was supported for the first time by digital marketing initiatives. This is expected to grow in popularity over the coming fiscal year.

Operations

Relocation of our central office from Mid Centre Mall to 9 Southern Main Road, Chaguanas was necessary as the customer traffic exceeded the accommodation provided. The new office features 1,600 square feet of office space and is designed with a customer-friendly environment with the added convenience of easy access from the surrounding communities. It is strategically positioned to meet the increasing demand for mortgages in the central area as a result of the government’s housing programme and the private housing developments that have evolved in recent years.

Ongoing maintenance of plant and equipment ensure that costs are kept to a minimum. Adoption of the safety and health requirements of the Occupational Health and Safety Act also provides for an environment that is amenable to efficient business and high customer service standards.

Human Resources

Delivering a first-class customer service experience is integral to our vision and compulsory for our success. At TTMF we pride ourselves on our professionalism. It is not enough however, to build the structure and environment for operating success without enhancing the skills and overall knowledge base of our human resources. We continue our training and development programmes in skill sets relevant to our business and the career development of our people.

In 2010, training programmes focused on risk management through credit and anti-money laundering courses and seminars. In our continued efforts to build a stronger team we conducted programmes in team building for management and emotional intelligence for all staff. Refresher workshops on our operating systems were undertaken to ensure that users maintained the performance standards required to meet our targets.

In April 2010 we hosted our first ever Sports and Family Day. The camaraderie and team spirit displayed in the preparation for and on the actual day of the event was unprecedented and was a true indication of the TEAM that makes TTMF the success that it is.

Conclusion

In the acceptance of our strategic initiatives in his 2010-2011 budget presentation, the Honourable Minister of Finance endorsed our vision for affordable housing in Trinidad and Tobago through the formation of the proposed Trinidad and Tobago Mortgage Bank (TTMB). TTMB, as is proposed, will be a publicly traded financial institution that unifies the strengths of the stakeholders in government business as it pertains to the mortgage market. We look forward to participation in this new and exciting platform in the development of our nation.

I take this opportunity to express my appreciation and gratitude to the outgoing directors for their insight, guidance and valuable contribution, and to welcome our new team members under the Chairmanship of Mr. Albert Vincent. I also thank the TTMF team for their vision, energy and commitment. Together we strive to serve, and with success, we build a customer base that can certify that “we make home ownership an easy and rewarding experience”.