The Commonwealth Bank of Australia has confirmed that it expects to wholly own Aussie Home Loans by the end of this month, with founder John Symond to be paid for the remaining 20 per cent stake in CBA shares.
On 3 August, Aussie announced the sale of its wholesale aggregation business nMB to non-bank lender Liberty Financial. The following day, Aussie chairman John Symond exercised his put option on the remaining 20 per cent stake in Aussie. CBA currently owns 80 per cent of Australia’s biggest mortgage broker.
In a statement released on 9 August, as part of its annual results, CBA confirmed Mr Symond’s option, which will require the group to acquire a 20 per cent interest in Aussie.
“The purchase price for the remaining 20 per cent interest will be determined in accordance with the terms agreed in 2012,” the bank said.
“The purchase consideration will be paid in the issue of CBA shares. The group will consolidate AHL from completion of the acquisition which is currently expected to be in late August 2017.”
An Aussie spokesperson said it was "business as usual" for the brokerage, which will continue to operate under the leadership of CEO James Symond.
Australia's largest mortgage provider, CBA, has made no secret about its preference for proprietary channels. Back in 2015, CBA's retail banking boss Matt Comyn told analysts that while the bank was happy with its investment in Aussie, brokers were not a strategic priority for the group, explaining that CBA was “deliberately the least dependent on the broker channel” relative to its peers.
CBA acquired 33 per cent of Aussie back in 2008, giving the major bank a minority representation on Aussie’s board while the management control remained with the Aussie team.
In 2012, CBA upped its share to 80 per cent. While the business was sold for an undisclosed amount, reports indicate that John Symond was paid upwards of $165 million for the 47 per cent stake.
Aussie could not confirm the value of Mr Symond’s remaining 20 per cent interest in the brokerage. However, the group has grown dramatically since 2012 and now boasts more than 200 retail stores and 1,000 brokers across the country. The group's success under the leadership of CEO James Symond is expected to continue.
Last year, the group celebrated its 25th year in business, and this year was named the number one brokerage in The Adviser’s Top 25 Brokerages ranking.
During the 2016 calendar year, Aussie settled $22 billion worth of loans, bringing its total loan book to more than $76 billion. More than 56,000 loans were settled by the group in 2016.
[Related: Aussie sells nMB to Liberty Financial]
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.
The major bank has said that it is taking ASIC’s legal action ...
The broking franchise group has released its full-year results, r...
Major aggregator AFG has announced the addition of a new small-bu...