Powered by MOMENTUM MEDIA
Powered by MOMENTUM MEDIA
SUBSCRIBE TO OUR NEWSLETTER SIGN UP
APRA curbs had ‘significant impacts’ on broker relations
Powered by MOMENTUM MEDIA

Website Notifications

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

APRA curbs had ‘significant impacts’ on broker relations

apra    apra
Staff Reporter 2 minute read

Australia’s mutual banks have argued that macro-prudential measures have created reputation and trust issues and impacted relationships with customers and brokers.

In its submission to the Productivity Commission draft report, the Customer Owned Banking Association (COBA) noted that several customer-owned banks were forced to temporarily halt investor lending in order to meet APRA’s requirements.

“Several COBA members have had time ‘out of the market’ due to the risk of breaching macro-prudential limits,” the submission said.

“Customer-owned banks, due to their small size relative to the major banks, are subject to greater volatility in their lending flows. This makes it much more difficult to manage a predictable growth path within the 10 per cent limit.

“Having to temporarily exit the investor lending market has significant impacts on customer and broker relationships.”

According to COBA, new and existing customers are turned away as institutions are unable to provide a product that is part of the standard offering of modern banking institutions.

Advertisement
Advertisement

“For example, an existing borrower with an owner-occupied loan may seek to move both their current loan and new investor loan to another ADI if the current ADI is unable to provide the investor loan,” the association said. “This creates reputation and trust issues.”

While COBA accepts that macro-prudential measures play an important role in managing systemic risk, the association argues that there must be greater consultation with the industry ahead of implementation.

APRA curbs had ‘significant impacts’ on broker relations
apra
TheAdviser logo
apra
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
NAB announces new CEO

National Australia Bank has appointed the CEO of Royal Bank of Sc...

‘Stick to what you know’: Associations hit back at CHOICE

The FBAA and MFAA have slammed consumer group CHOICE for its “d...

Peer-to-peer lender joins AFG panel

RateSetter has joined the panel of aggregation company AFG, givin...