Big banks accused of ‘hiding behind sub-brands’

According to the association’s submission, sub-brands are luring customers who don’t want to patronise major banks by failing to properly disclose their ownership structure.

“Westpac’s sub-brands include St. George, BankSA, Bank of Melbourne and RAMS. NAB has UBank and Commonwealth Bank has Bankwest and Aussie Home Loans,” the submission said.

“CBA’s takeover of Aussie Home Loans means that one of the leading mortgage brokers in the market is subject to the interests of the largest lender in the market.

“Consolidation of the mortgage distribution services market in recent years includes NAB’s acquisition of the PLAN, Choice and FAST brokerages, trading under the Advantedge brand name.”

The association called for ASIC to be more vigilant about the “risks posed by large, vertically integrated players” and to be more active in promoting competition.

NAB and Commonwealth Bank declined to comment, although an Aussie spokesperson said the group was proud to have Commonwealth Bank as its largest shareholder.

“It has been widely reported that the Commonwealth Bank last year lifted its shareholding in Aussie Home Loans to 80 per cent, and that information is also displayed on Aussie website and collateral material," the spokesperson said.

Westpac also told The Adviser that multi-branding is common in various categories and industries.

“We clearly state what brands we own and those individual brands also make it clear that they are divisions of the Westpac Group on their websites and in their advertising,” a spokesperson said.

[Related: Brokers call for more transparency]

Next month’s issue of The Adviser will explore mutual banks, which are some of the lenders represented by the Customer Owned Banking Association.