Money & Banking

Securitisation pool collections improve as restrictions ease: Crisil Ratings

Our Bureau Mumbai | Updated on September 27, 2021

Collection ratios in mortgage-backed securitisation pools have rebounded to near-100 per cent during July and August

With the gradual phasing out of social restrictions, there has been an improvement in the monthly collection ratios of securitised pools rated by Crisil Ratings.

These had declined between April and June 2021 following the second wave of the Covid-19 pandemic.

“The trend in improving collection efficiencies has been seen across asset classes and in a number of segments, the levels are quite close to pre-pandemic levels. Collection ratios in mortgage-backed securitisation (MBS) pools have rebounded to near-100 per cent―their pre-pandemic normal ― in the pay-out months of July and August 2021,” Crisil Ratings said on Monday.

MBS pools, with home-or property-backed loans as underlying, have shown extremely high resilience across economic cycles.

Says Krishnan Sitaraman, Senior Director and Deputy Chief Ratings Officer, Crisil Ratings, “In asset-backed securitisation (ABS) pools, collection ratios are set to reach January-March 2021 pay-out levels after dipping to 84 per cent in the first quarter this fiscal.”

Median collection

Median collection ratios for vehicle loan pools for August pay-out reached 100 per cent, just a tad short of the March collection ratio of 101 per cent, he further said.

Similarly, in the case of two-wheelers and small and medium enterprise (SME) loan pools, collection ratios have risen to 98 per cent and 90 per cent in August from 95 per cent and 78 per cent respectively, for June pay-out.

“The government’s focus on rural areas and agriculture, and launch of schemes for SMEs have helped here,” Crisil said.

Rohit Inamdar, Senior Director, Crisil Ratings, said, “Securitisation volume after the second wave remains a pale shadow of what it was before the pandemic began. What’s encouraging, however, is the limited decline in collections after the second wave. The ongoing recovery should improve investor confidence and increase interest in securitisation transactions.”

Published on September 27, 2021

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