the adviser logo

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

by James Mitchell4 minute read
Arrow up, positive growth

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.

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?]

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.


You need to be a member to post comments. Register for free today


Stephen Hale ta

MFAA launches near-prime, specialist loan resource

Coined Finance for when your customer doesn’t fit the mould: A broker’s guide to near-prime and...

Daniel Newell Gedda

Specialist lender LoanU rebrands to Gedda

The personal and auto loan provider LoanU, which specialises in helping Australians with impaired credit histories...

tech tools

CBA introduces AI technology to combat scams

New figures released by the competition watchdog this week have revealed that Australians lost more than $2 billion...

Read the latest issue of The Adviser magazine!
The Adviser is the number one magazine for Australia's finance and mortgage brokers. The publications delivers news, analysis, business intelligence, sales and marketing strategies, research and key target reports to an audience of professional mortgage and finance brokers
Read more