Adding impetus to the sluggish economic recovery, SunTrust Banks, Inc. (STI) is creating new jobs in the Charlotte area. The bank is recruiting 60 mortgage originators and underwriters at a recently opened loan processing and underwriting centre in the region.
Previously, the centre had hired 40 employees. The new employees are expected to be recruited by the end of this year. Upon completion of the recruitment process, the sales centre will have 60 loan officers and 40 underwriters.
The loan processing and underwriting centre is equipped with a call-centre to provide services to borrowers who desire to conduct transactions with a mortgage lender over the telephone, rather than visiting a bank branch and getting it done by a retail loan officer.
Management at SunTrust believes that the current low interest rate environment and the anticipation of a recovery in the housing market have led to a significant increase in the bank’s mortgage-related revenue. Further, demand for auto loans as well as small-business loans are rising.
In the first half of 2012, a substantial increase in the mortgage production income was witnessed, which was the primary contributor to the hike in non-interest income of the bank. Management believes that the addition of new staff at the Charlotte centre will perk up its mortgage lending capabilities throughout the bank’s diverse network.
Many U.S. banks – like Wells Fargo & Company (WFC) – have employed a large number of mortgage-processing staff in the recent months to exploit the wave of refinancing, which is taking place in the current low interest rate environment. In addition to improving the quality of service dished out to the customers and improving the top line of the company, these additional job creations are expected to boost the sluggishly recovering economy.
SunTrust currently retains a Zacks #2 Rank, which translates into a short-term Buy rating. However, considering the fundamentals, we maintain a long-term ‘Neutral’ recommendation on the shares.
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