Banks?profitability increases pressure on broker commissions

Lenders need to radically review their use of brokers if they are to improve profitability, according to JPMorgan and Fujitsu Consulting

“Brokers have retained a disproportionate share of the ‘mortgage profitability pie’ which the banks will not allow to continue in perpetuity,” JPMorgan banking analyst Brian Johnson said.

“Banks are using the current environment to break the status quo of using brokers to boost market share and to reclaim the pricing power associated with the distribution function, such as their branch networks,” Mr Johnson added.

The JPMorgan/Fujitsu Consulting Australian Mortgage Industry Report released yesterday also found that inefficient mortgage practices are increasing the costs of lending– for both lenders and consumers.

“Australian mortgagees are paying up to 35 per cent more than they should in fees because of longstanding inefficiencies in the industry,” said Martin North, managing consulting director of Fujitsu.

“It takes weeks generally to get a mortgage funded, compared with a few days overseas,” he said.

Published 14-03-08 

Banks?profitability increases pressure on broker commissions

Staff Reporter

Last Updated: 14 March 2008 Published: 14 March 2008

Written by Staff Reporter

Last Updated: 14 March 2008

Published: 14 March 2008