Suncorp RMBS prompts calls for additional AOFM support package

Suncorp Metway has issued $1.2 billion in residential mortgage-backed securities, effectively draining the last of the government’s $8 billion support package for the securitisation market.

The lender was mandated in June as one of the last recipients for Australian Office of Financial Management (AOFM) funding.

Only $547 million remains from the pool of government funds.

Suncorp’s decision to issue the securities yesterday has intensified the second-tier banks pledge to the government to announce a revised support package.

The program was announced last September and involves the government acting as a cornerstone investor to help get deals off the ground, despite the effective closure of the RMBS market.

Industry participants are calling for another round of $8 billion to stimulate competition in the sector.

Lack of funding has hampered the capacity of regional banks and non-bank lenders to write new mortgages, resulting in the Big Four banks increasing their market share to more than 90 per cent.