Open Road Vehicle And Finance Solutions Pty Ltd

17/09/2020

In the eye of the storm

11 September 2020

PwC

SA’s major banks navigate a crisis of unprecedented pace, scope and impact

Combined headline earnings of R14.6 billion declined 65.5% against 1H19, combined ROE of 5.4% (18.5% at 1H19), net interest margin of 392 bps (432 bps at 1H19), credit loss ratio of 232 bps (78 bps at 1H19), flat cost-to-income ratio of 55.1%

The major banks’ results for the period ended 30 June 2020 reflect the impact of the profound public health, social and economic strain brought about by the COVID-19 pandemic and resulting stresses to the operating environment. Against unprecedented levels of market turbulence and operating uncertainty, key themes emerging from the results include:
◦ The major banks entered the crisis with resilient balance sheets, sound capital and liquidity levels and strong franchises. These foundations helped anchor the course as they swiftly turned attention to ensuring the safety of their workforces, maintaining cost discipline, operational and balance sheet resilience, and providing colleague, community and customer support.
◦ Driven by heightened customer risks and depressed economic outlooks across loan product classes, industry sectors and geographies, credit provisioning levels soared against expectations for rising volumes of distressed and non-performing loans. Sharply increased credit impairment charges translated into deep contractions in headline earnings and depressed ROEs. Although subject to significant estimation uncertainty, PwC’s research suggests that South African economic output could take between 2-7 years to return to 2019 levels.
◦ While different banking segments and products reacted with different levels of acuity to crisis conditions, the major banks remained open for business and focused on operational stability - positioning themselves for a recovery of unknown timing and shape and maintaining an eye towards strategising the longer-term impacts on their businesses and operating models.
◦ Robust digital transactional volumes were insufficient to offset the significant lockdown-related decline in trading activity, negatively impacting revenues.
◦ Supported by robust technology architecture and years of strategic focus on customer centricity, innovation and channel development, foundational capabilities were leveraged to facilitate customer experiences through online channels as lockdowns rapidly accelerated digitisation of banking services - ranging from collection capabilities, transactional channels and enabling new product sales.
◦ Underpinned by a focus on operational excellence, innovation efforts and partnerships with niche fintech players continued and were accelerated in a climate characterised by new ways of working. These efforts ranged across diverse aspects including Artificial Intelligence, Robotic Process Automation, Cloud Computing and Application Programming Interfaces, amongst others.
◦ Tight cost control and intense management of discretionary spend represented a key focus area over the period in response to lower revenue growth and significant operating uncertainty.
◦ The major banks recognise that their business models will need to continue to be refined. This will include a redesign of distribution structures with a focus on reskilling teams to further enable delivery of the digital customer experience of the future.
◦ Regulatory capital and liquidity ratios reflected continued resilience and were maintained well above required levels, aided by a consistent track record of prudential discipline, risk management and balance sheet fortitude.
◦ Evolution of the risk landscape began long before the pandemic with the emergence of cyber risks, vendor risks, climate and sustainability risks, among others, increasingly ranking alongside primary risk types. These emerging risks took on renewed prominence as crisis conditions emboldened malign actors in areas ranging from data theft to exploiting operational vulnerabilities.

07/07/2020

Credit life is one of the options to provide relief to customers impacted by COVID-19

01 April 2020

FNB

As consumers continue to weigh the impact of COVID-19 on their finances, many will be considering options to protect themselves from financial difficulties.

Earlier this week, FNB announced its new set of cashflow relief measures for customers whose finances have been impacted by COVID-19 to enhance the set of measures customers would have historically relied on, like Credit Life where applicable.

The Bank acknowledges and agrees with personal finance commentators that credit insurance has always provided relief to customers who qualify and should be one of the options that customers consider over the next few months. It is with this in mind that FNB further confirms that, as per the announcement made earlier this week, the new COVID-19-related digital application process assists customers to process credit insurance when applicable, before finalising additional cashflow relief measures with each customer.

Lee Bromfield, CEO of FNB Life says, “Credit Life has been around for a long time and we went live with cover on loss of income on our products in August 2017. Since then, it has always been one of our primary considerations for customers who are in financial difficulty.”

According to the National Credit Act, credit life insurance is payable in the event of death, disability, terminal illness, unemployment or other insurable risks that are likely to impair the consumer's ability to earn an income or meet the obligations under a credit agreement.

If a customer is permanently employed and they become unemployed or are unable to earn an income due to contracting COVID-19 or due to measures put in place to prevent the spread of the virus, all their obligations under the Credit Agreement that become due and payable can be paid either for 12 months during the remaining repayment period of the Credit Agreement, or until they are able to find employment or earn an income whichever is the shorter period.

“It’s important for customers to know what they are covered for to be able to make informed financial decision, especially in light of COVID-19. We will be issuing direct communication to customers who have credit life insurance with the bank on their credit products. We are firmly committed to supporting our customers during this difficult time,” says Bromfield.

FNB encourages its customers whose income has been affected by COVID19 to apply for relief on its banking App via the COVID-19 icon.

03/07/2020

03/07/2020

Safety features not ‘the’ priority for SA car buyers

02 July 2020

SAMBRA

Buying a car, new or secondhand, is a big financial commitment and the buyer wants to know they are getting bang for their buck, along with all the things which they most desire in a car.

Richard Green, national director of the South African Motor Body Repair Association (SAMBRA), says safety may be a consideration, but industry reports indicate factors like reliability, comfort, manufacturer’s reputation, warranty, fuel efficiency and purchase price all rank more highly than safety features in the South African market.

“The truth is, we buy what we can afford. Several motorists can only afford entry level cars which come with basic safety features,” says Green.
According to an article based on Statista’s Global Consumer Survey 2018, by data journalist Martin Armstrong (Most important factors when buying a car, statista.com), car buyers in the United States rank safety first, followed by fuel efficiency, high quality, good warranty and customer service, suitability for everyday use, high driving comfort, design, low price, spaciousness and whether it is their preferred make.

SAMBRA answers critical questions around vehicle safety:
1. Is it right to assume a secondhand car is not as safe as a new car?
No. A secondhand car which has not been involved in any major accidents, has a complete service record and has been well maintained is as safe as a new car. However, the latest model cars might have more advanced safety features, such as Forward Collision Warning (FCW), Automatic Emergency Braking (AEB), City Automatic Emergency Braking (CAEB), High Speed Automatic Emergency Braking (HAEB) and Blind Spot Warning (BSW), which all make the car safer than a car without these features.

2. What safety features do cars have which can prevent a collision and keep motorists safe?
Today’s vehicles are packed with enhanced technology to keep you safe, offering extra layers of protection during your daily commute. When comparing the differences between active versus passive safety features, the biggest difference is when these unique systems come into play. In general, active safety features work to prevent accidents, while passive safety features activate during a collision to protect the driver and passengers.
Active Safety Systems: Active safety systems remain active while you drive and are continuously working to prevent you from losing control and as, a result, having an accident. Most are electronic (controlled by a computer) and include traction control, electronic stability control, braking systems and advanced driver assist systems that use sensors (forward collision warning, lane departure warning, adaptive cruise control).

Passive Safety Systems: These features become active during an accident and work to minimise damage and reduce the risk of injury during the time of impact. These systems include seatbelts, air bags and the specialised construction components of the vehicle (crumple zones and safety cage).

It is important to note both the active and passive safety features can be compromised in a collision.

3. Why is it important to have the vehicle repaired by a reputable motor body repairer shop after an accident?
As mentioned, both active and passive safety features can be compromised in an accident. Accredited, reputable and manufacturer-approved repair shops are professionals and meet the necessary standards, ensuring that you receive quality service and workmanship. You can have peace of mind that staff are well trained and have the knowledge and specialised equipment to repair your vehicle to pre-collision condition. Your service plan and/or warranty could be suspended if the incorrect or sub-standard repair process is used in the repair.

4. After the repair, what questions should you ask the workshop before paying for the repair?
• Did the repair work go as planned, as per the authorised estimate received from my insurer?
• Ask the workshop to go through the repair work with you.
• When can I wash my car again after the refinishing process?
• Request the warranty on the repair work in writing.
• Who do I complain to if I am not happy with some of the repairs?

5. Does the onus for safety of a vehicle rest solely with the manufacturer? What is the motorist’s role in ensuring the safety of themselves and their passengers?
The largest part of the responsibility lies with the manufacturer, yes. However, safety features should be a priority when a motorist purchases a vehicle. After purchase, the vehicle should be kept in a mint, safe and roadworthy condition at all times and safety features should be made use of when driving.

6. What is the most common safety feature in a car motorists neglect to use?
Seatbelts. Motorists will often drive short distances without a seatbelt or allow passengers to travel without seatbelts. Accidents often happen during short trips and any person not ‘strapped in’ presents a threat not only to themselves but to the others in the vehicle during an accident.

7. Which safety features of a car are the most effective in preventing an accident?
Safety systems that combine collision warning and automatic braking are the most effective in preventing accidents.

8. What are the six safety features of a car every motorist must insist on, at least?
Airbags, Antilock Braking System (ABS), Electronic Stability Control (ESC), Traction Control, Automatic Emergency Braking (AEB) and adaptive headlights.

9. What, in your opinion, could the manufacturing industry improve on in terms of vehicle safety?
A safer car with more enhanced safety features costs more money. It was suggested in an Automobile Association report that manufacturers should do away with more of the luxury items in vehicles in exchange for more enhanced safety features.
Green concludes that a recent report considered the safety features of 27 cars available in South Africa priced under R180 000 and found there have been improvements to the safety features in entry level cars, but that more can and must be done in this regard.

03/07/2020

FNB offers extended payment break to help customers who remain in financial difficult.

18 June 2020

FNB

Increase in customers who require extended payment break

In March this year, FNB announced Cashflow Relief measures which offer customers a 3-month payment break through a separate credit agreement and assistance with credit insurance claims where relevant. The relief measures have been available from 1 April.

As at 15 June, nearly 300 000 individual customers were offered payment breaks through a separate credit agreement worth approximately R5 billion. The payment breaks through a separate credit agreement are offered at prime interest rates with 60 months repayment term and no penalty fees on early settlements. In addition, the Bank expects to approve approximately R150m worth of credit life insurance claims by end of June 2020, which is R50m more than its initial projection.

FNB will now be offering pre-selected qualifying customers with existing COVID-19 Cashflow Relief Plans an opportunity to extend the payment breaks with a separate credit agreement by up to 3 months. This will mean that qualifying customers in selected industries of our economy that can demonstrate material income impact as a result of COVID-19 may be offered a 6 months payment break on their repayments through a separate credit agreement. We encourage customers to evaluate their personal circumstance before taking up any offer. The offer brings flexibility and real savings to customers on the cost of their credit in the long term and is specifically designed to help customers minimise the impact of COVID-19 on their finances.

Chief Executive of FNB Retail, Raj Makanjee says, “We recognise that some of our customers/industries may feel the impact of COVID-19 longer than others. This may be due to their type of employment, or circumstances such as self-employment, with reduced or no income. It is during these uncertain times that we want to continue to find ways to help our customers when it matters the most.”

The extended relief measures are available to customers who honoured their credit agreements with the Bank as at end of February 2020.The relief options available are as follows:

1. Extended payment break with a separate credit agreement at prime interest rate
COVID-19 Cashflow Relief Plan Extension
• You are offered to extend your current payment break by up to 3 months;
• Your repayments only start at the end of the extended payment break;

• You get prime interest rates, zero or no penalty fees for settling early and a 60 months repayment term.

2. Alternatively, 3-month payment break with extended repayment term on a single product
• You get a 3-month payment break by extending your current repayment term on a credit product;
• No separate credit agreement is required, and the original interest rate on the credit product applies;
• You will only resume with instalments at the end of your payment break on the product;
• Interest and fees are not suspended during the payment break.

“We encourage customers who have multiple products with us to consider a Cashflow Relief Plan which consolidates their instalments to repay separately at the end of the payment break. This could be cost-effective for a customer compared to extending the term on each product, where original interest rates and fees can cause financial strain over the long term. In addition, customers are always encouraged to fully understand the options provided to them in light of their financial situation and only then decide whether or not to proceed.

Those who have a single product with us, such as vehicle finance via WesBank, can always opt to extend their term to repay over a longer period. This option also offers a payment break. We are pleased to be offering relief to primary-banked customers on a range of products including select FNB Connect packages and insurance products. From 1 July, our individual customers will also have more ways to earn eBucks and enjoy a zero increase or a reduced monthly account fee. We are committed to providing cost-effective relief to cater for the money management needs of customers,” concludes Makanjee.

02/07/2020

Different driver mindset necessary as new drunk-driving law takes effect.

30 June 2020

Anton Davies, Head of Client Solutions at Nedbank Insurance


As South Africa officially moved to level 3 of the national lockdown on 1 June 2020, the country also saw the reopening of liquor stores. In the same week, the healthcare fraternity recorded a slight increase in the management of cases related to alcohol consumption, according to Arrive Alive.

Sadly, drunk driving resulting in fatal crashes and incidents of pedestrians being knocked down are some of the issues that were reported with the gradual resumption of some economic activity.

With a reported 58% of road traffic deaths in South Africa linked to alcohol consumption, according to a recent World Health Organisation Global Status Report on Road Safety, road fatalities continue to cost the economy billions of rands each year.

In response to curbing the spread of Covid-19, the national lockdown and ban on the sale of alcohol in the initial stages contributed to a significant decline in the incidences of alcohol-related trauma cases, but the occurrence of the recent cases indicates a need for a more long-term and systematic approach.

Interestingly, and while no direct correlation is inferred, the lifting on the ban of alcohol sales coincided with the introduction of the new drunk-driving law, which also came into effect from June 2020. It will impose stricter conditions on drivers with the introduction of the 0% legal blood-alcohol limit.

This is a bold move from past government regulations that allowed for the maximum alcohol level of 0,05% per 100 ml in a blood sample and a legal breath alcohol limit of less than 0,24mg/1 000 ml. This law is implemented in conjunction with the Administrative Adjudication of Road Traffic Offences (Aarto) Act, which will see through the demerit system and aims to encourage motorists to change their behaviour and reduce road carnage.

Drivers can expect several changes where car insurance is concerned. The 0% blood alcohol limit indicates the state’s zero tolerance towards the consumption of any alcoholic substance, and this means that insurers will be well within their rights to reject any claim where intake of substances is involved. Data from the demerit system will also allow the insurance industry to identify high-risk drivers, which will in turn increase their respective premiums.

While insurers take on the risk for clients to make sure that they have peace of mind when the unexpected occurs, this does not mean they can abandon their responsibility and liability.

This is why we continue to build incentives into different offerings to encourage better care of personal belongings, more awareness of driving habits and, thus reducing claims and saving on premiums. This is also intended to help clients to see the value of staying within limits and shifting their mindsets to see insurance differently.

If there is one critical lesson that we can all learn from the initial hard lockdown period, it is that drinking in the comfort of your own home is one of a few ways of doing things differently. While no one is proposing that the fun stops, there needs to be an awareness that the one beer or glass of wine we were so comfortable having before, now pushes us over the limit and this will have dire consequences.

As a result, the face of get-togethers will need to change and adapt to the new status quo as more planning and less spontaneity becomes important. This is where e-hailing services such as Uber, Bolt and other take-me-home options (some even included with your insurance policy) will also play a bigger role for a night on the town.

South Africa still ranks high among countries with the worst number of road fatalities in the world and the country needs long-term interventions involving firm law enforcement, among other measures. The new drunk-driving law is a welcome development that calls on more concerted partnerships between government, regulators and the private sector and an even greater responsibility on road users.

06/05/2019

2012 Chevrolet Captiva 2.4 LT Auto

06/05/2019

2017 Mazda CX-3 Mazda CX3 - 2.0