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Non-bank denies YBR takeover talks

James Mitchell 3 minute read

An Australian non-bank lender has quashed rumours that it has been in M&A discussions with Yellow Brick Road.

Allan Savins, chief commercial officer for Resimac, categorically stated that the group has had no discussions with YBR.

Mr Savins' denial comes after the Australian Financial Review ran a story on Friday speculating on YBR’s corporate growth plans, which named the Resimac-owned State Custodians as a potential acquisition target.

“Resimac Group is an active acquirer themselves, and continues to look for strategic acquisition opportunities after successfully purchasing [RHG Group] recently,” Mr Savins said. “The rumour is 100 per cent false.”

Meanhwhile, YBR and Homeloans have responded to media reports of a merger that could see the formation of a major mortgage group worth more than $200 million.

“Yellow Brick Road Holdings Limited (the company) is aware of media speculation concerning merger or acquisition discussions with other mortgage industry institutions,” YBR said in an ASX statement.

“The company is often in discussions with many parties on a range of matters. Any current discussions are incomplete and strictly confidential.”

YBR said no agreements have been entered into that would require disclosure to the market.

“If and when a matter warranting disclosure occurs, the company will notify the market in the proper manner.”

Homeloans was also coy on the speculation.

“Homeloans regularly holds discussions with various industry participants regarding a range of potential transactions, at both a corporate and asset level,” the group said.

“Homeloans will update the market as and when required in accordance with the company’s ASX obligations.”

YBR’s past acquisitions include mortgage manager Resi and aggregation group Vow Financial. Both groups were acquired last year.

The group has made no secret of its intentions to build scale in the Australian mortgage market through the procurement of distribution business.

YBR chief executive Matt Lawler told The Adviser in September last year that the group's acquisitions of Resi and Vow would give it greater buying power and might also allow it to offer services that were not previously viable.

“A lot of the investment that we’ve done into Yellow Brick Road – particularly around white-label mortgage products – can now be leveraged into Vow and Resi,” he said.

“When you talk about the investments that have gone into Yellow Brick Road to build up the capability and the infrastructure, a lot of that benefit can now be leveraged into a much larger distribution network.”

YBR’s relationship with Macquarie – a shareholder and funder of the group – plays into its mortgage strategy, as explained by Vow Financial chief executive Tim Brown.

Macquarie is the funder behind YBR’s white-label home loans, which have recently been relabelled as Vow Home Loans, Mr Brown told The Adviser in February.

“Obviously we see the benefits of selling some of their other products such as the white-labelled product that is now called Vow Home Loans, which we are starting to sell,” he said.

YBR’s strategy is to build size and scale through subsidiary brands such as Vow and Resi, Mr Brown said.

“We are using that scale and size to get better pricing on products, which is what we have achieved through our relationship with Macquarie,” Mr Brown said, adding that Macquarie has also partnered with the YBR group to distribute wealth products.

“All those things over time will give our brokers better products that they can sell to their clients.”

Mr Brown pointed to Aussie’s acquisition of nMB as a similar example of a branded group looking to build scale.

[Related: Macquarie to grow white label footprint]

Non-bank denies YBR takeover talks
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James Mitchell

James Mitchell

James Mitchell has over eight years’ experience as a financial reporter and is the editor of Wealth and Wellness at Momentum Media.

He has a sound pedigree to cover the business of mortgages and the converging financial services sector having reported for leading finance titles InvestorDaily, InvestorWeekly, Accountants Daily, ifa, Mortgage Business, Residential Property Manager, Real Estate Business, SMSF Adviser, Smart Property Investment, and The Adviser.

He has also been published in The Daily Telegraph and contributed online to FST Media and Mergermarket, part of the Financial Times Group.

James holds a BA (Hons) in English Literature and an MA in Journalism.



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