In the wake of mounting speculation surrounding ANZ’s possible sale of Origin, Mortgage Business’ Victoria Rooney caught up with Adelaide Bank’s Tim Piper to get his take on what lies ahead for Australia’s non-bank sector.
Origin Mortgage Management Services (Origin), ANZ’s wholesale division, is apparently about to go under the hammer. While the daily papers fuel gossip concerning possible suitors and expected sale price, the more searching question is what are the broader implications for the non-bank sector?
Paul Edwards, head of corporate communications at ANZ, confirmed with Mortgage Business that the company was “exploring strategic options for its wholesale mortgage distribution business”.
Origin has an estimated 40,000 loan book valued at approximately $7 billion. According to ANZ, the decision to review Origin’s position is a result of “recent approaches from third parties to acquire Origin” – suggesting that the business is attracting attention from several quarters.
For the wider non-bank sector the news surrounding a possible Origin sale echoes ongoing rumblings of industry consolidation. Head of Adelaide Bank’s wholesale mortgage business, Tim Piper, knows the market well. Mortgage Business asked Piper for his view on the evolution of the non-bank sector.
“Whilst not seeking to comment specifically on the Origin position, there’s clearly been margin compression and that means that there is every possibility that the industry will see further consolidation. Everyone needs to make appropriate returns and there is no denying that players in the wholesale environment have to work harder and smarter than before,” he said.
Adelaide Bank has confidence in the strength of the market though, having recently renewed its third party division commitment – and commenced implementing a new strategy.
According to Piper, the non-bank sector has the capacity to continue to increase its market share over the coming years.
“There is a lot of potential for the non-bank sector to grow. It has a competitive offering for consumers who are increasingly looking for independent advice, better service, and products – which the non-bank sector is in the best position to deliver on [compared to the mainstream banks],” continued Piper.
Piper also added that while the future looks bright, Australia’s major wholesale lenders should not loose sight of key industry issues as they push for growth.
“Everyone in the wholesale sector is working hard at the moment, but there is a need for the industry to protect itself and consumers. The industry needs to refine its offering and to tackle serious issues like fraud if we are to move forward – whether there is consolidation or not,” said Piper.
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