First Title Acquires Stake in Turkey's Largest Mortgage BPO Business
20 October 2008
LONDON, October 3, 2008 - First Title Insurance plc (First Title) , a subsidiary of First Title plc and the largest provider of title insurance in the United Kingdom and Europe, is pleased to announce that it has acquired 38 per cent of the stock of FU Gayrimenkul Dan??manl?k AS (FU), Turkey's largest mortgage BPO business.
FU was established in 2006, before Turkey passed a framework of laws to create a mortgage industry in 2007. Since then, the company has grown to become the leading provider of outsourced legal and processing services to Turkish residential mortgage lenders and mortgage-based commercial loan providers. FU looks after the search and examination of title and registration of mortgage securities for many of Turkey's leading mortgage lenders. FU offers its services through a network covering 75 provinces of Turkey, and the company expects to process more than 45,000 residential mortgages in 2008.
The total amount of new Turkish mortgages is estimated to be growing at about 3 per cent monthly, despite increasing interest rates. In 2006, the total value of Turkish mortgages, as a percentage of GDP, was below 4 percent, compared to a European Union average of 49 percent . As of May 2008, the t otal value of Turkish mortgages was approximately USD $27 billion versus approximately USD $1 billion in 2003.
Turkish banks maintain healthy balance sheets and there is no subprime lending in the country. Nonperforming housing loans comprise less than 0.5 percent of total loans and Turkish banks generally do not have exposure to mortgage derivatives. First Title's Turkish operation was established recently to provide insurance, intermediary and risk consultancy services to both the residential and commercial real estate sectors.
"This investment will strengthen the product offerings of both businesses," said Phillip Oldcorn, chief executive officer of First Title Insurance plc. "By combining First Title's niche real estate insurance products with FU's nationwide platform of legal and processing services, we can deliver a unique service to anyone buying, selling or lending against Turkish real estate. The opportunity to apply this combined product range now, while Turkey's infant mortgage market develops, puts both businesses in an excellent position."
Zekeriya Y?ld?r?m, a director and shareholder of FU and former Deputy Governor of Turkey's Central Bank said, "With the support from First Title, FU's pioneering role in the newly developing mortgage industry will further expand, facilitating the growth of the industry and the outsourcing services in the banking sector."
Forward-Looking Statements
Certain statements made in this press release, including those relating to the effects of First Title's investment in FU and Fu's future role in the Turkish mortgage industry, are forward-looking statements within the meaning of Section 27A of the United States' Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These and other forward-looking statements may contain the words "believe," "anticipate," "expect," "predict," "estimate," "project," "will be," "will continue," "will likely result," and other similar words and phrases. Risks and uncertainties exist that may cause results to differ materially from those set forth in these forward-looking statements. The forward-looking statements speak only as of the date they are made. The company does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made.