Executive Summary
We delivered a comprehensive analysis of the UK housing and mortgage markets to a bank with significant operations in Ireland. Our forecasts and sensitivity tests provided the client with a clear view of market risks, helping them prepare for potential shocks. Later, we assisted with assessing the implications of Brexit and a Greek exit from the EU, identifying specific risks to the bank’s portfolio and supporting strategic decision-making.
Client Background
The client is a leading financial institution with a large portion of its business focused on the Republic of Ireland, but with significant exposure to the UK housing and mortgage markets. As part of their ongoing risk management and business planning, they required a detailed understanding of potential market shifts and macroeconomic developments.
Challenge
With evolving market dynamics, including housing price fluctuations and changing mortgage conditions, the client needed to understand the key economic drivers of the UK housing market, assess risks to their portfolio, and prepare for potential disruptions from major geopolitical events like Brexit and a Greek exit from the EU.
Solution
We conducted an in-depth assessment of the UK housing and mortgage markets, focusing on key economic indicators and leading sectoral drivers. To support the board’s decision-making, we ran sensitivity tests around our central forecasts to quantify potential risks to the bank’s portfolio. Six months later, we revisited the analysis to consider the broader impact of Brexit and the possible exit of Greece from the EU, examining their potential consequences on the UK economy and the client’s operations.
Detailed Results
Our initial analysis enabled the bank to refine its risk management strategies and align its business planning with realistic housing and mortgage market scenarios. The follow-up work on Brexit and the Greek exit provided actionable insights into how these events could directly affect the client’s UK exposure, guiding the bank in making proactive adjustments to its portfolio and risk strategies.
