Powered by MOMENTUM MEDIA
Powered by MOMENTUM MEDIA
SUBSCRIBE TO OUR NEWSLETTER SIGN UP
‘Bank ownership has been positive’, says Loan Market boss
Powered by MOMENTUM MEDIA

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.

‘Bank ownership has been positive’, says Loan Market boss

arrow up  arrow up
James Mitchell 2 minute read

Loan Market chairman Sam White believes that bank ownership of mortgage aggregation businesses has been beneficial for broking. However, he sees potential headwinds as banks deal with increasing compliance challenges.

Bank ownership of third-party businesses remains a contentious issue. However, it is commonplace and very much part of the evolution of mortgage broking in Australia. NAB’s ownership of Choice, FAST and PLAN; Macquarie’s stake in a number of aggregators; and CBA’s recent 100 per cent ownership of Aussie have been well documented.

As the banks face a tougher regulatory environment and increased scrutiny, however, Loan Market chairman Sam White believes things could change.

“Bank ownership has been positive for the industry and given confidence that it has a future,” Mr White told The Adviser.

“But I think one of the challenges moving forward for bank-owned groups is that they will be dealing with bank-owned compliance. Right now, you are seeing a very strong reaction to banks against compliance risk. What we have seen recently is a more risk-averse culture. In some cases, that’s warranted, and in some cases, it’s not.

Advertisement
Advertisement

Mr White believes that moving forward, the requirements of large, mass market financial services businesses will need to operate on a “lowest common denominator level” and that will impose “more onerous obligations” than might otherwise be the case.

“That may happen,” the chairman said. “But in terms of customer outcomes and the brokers who work in those groups, bank ownership of aggregators has not been a problem.”

The banks have faced increased pressure from regulators in recent years. Just last week, APRA revealed the terms of reference for its inquiry into CBA following the AUSTRAC money-laundering scandal.

Late last month, CBA acquired the remaining 20 per cent stake in Aussie Home Loans, Australia’s largest mortgage broker. Aussie founder and chairman John Symond received 2.1 million CBA shares, at $78.54 each, worth $164 million.

[Related: Is CBA shorting mortgage brokers?]

‘Bank ownership has been positive’, says Loan Market boss
arrow up
TheAdviser logo
arrow up
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.

 

FROM THE WEB
more from the adviser
handshake 1 850 Asset finance lender acquired for $260m

Equipment finance lender Axsesstoday Limited, which had been plac...

StephenMoore850 Brokers encouraged to seize data opportunities

Head of Choice Aggregation Stephen Moore has encouraged brokers t...

megaphone crowd ta Brokers have their say on serviceability changes

Several leading brokers have suggested that APRA’s recent chang...