The major bank has confirmed that it is selling its RAMS mortgage portfolio to a consortium including Pepper Money and global investment firm KKR.
Westpac CEO Anthony Miller has confirmed that the bank has entered into an agreement to sell its $21.4 billion RAMS mortgage portfolio to a consortium which includes Pepper Money Limited (Pepper Money), global investment firm KKR (which used to own Pepper) and investment manager PIMCO.
Reports of a potential sale to this consortium had begun circulating last week but Miller confirmed the sale when announcing the full-year result on Monday (3 November).
While the value of the purchase has not been released, Westpac said that the deal was “at a slight premium to the gross loan value of the portfolio to be transferred at completion”.
The bank had bought RAMS in 2008 for $140 million but closed the RAMS Franchise Network to new business last year following widespread compliance failures that recently resulted in a $20 million court penalty.
It has confirmed that it would be making a loss on sale (post transaction costs and other adjustments).
Westpac chief executive officer (CEO) Anthony Miller said the sale “further simplifies the bank”.
“This transaction will significantly streamline Westpac’s mortgage operations, reduce run costs across the business and provide further strategic flexibility,” he said,
“Importantly, RAMS customers can continue managing their loans through the RAMS app, website, and call centre and do not need to do anything following today’s announcement,” he said.
While the brand has been in unoff, existing RAMS customers will reportedly be supported with any transitional requirements over the coming months.
Completion of the transaction is subject to various conditions and regulatory approvals, including Foreign Investment Review Board approval and clearance from the Australian Competition and Consumer Commission (ACCC), and is expected to occur in the third quarter of 2026.
Following completion, Westpac’s common equity Tier 1 capital ratio is estimated to increase by around 20 basis points.
Pepper Money has confirmed it has agreed to acquire the RAMS home loan portfolio and would be appointed as a servicer of the portfolio.
It will also hold a small investment in the securitisation financial vehicle, which will acquire the beneficial interest in the loan portfolio, alongside other members of the consortium
RAMS wind-down and compliance issues
The confirmation of renewed sale discussions comes just days after the Federal Court ordered RAMS Financial Group (RAMS) – a wholly owned subsidiary of Westpac – to pay a $20 million penalty for systemic compliance failings in arranging home loans.
The court found that RAMS breached its obligations as an Australian credit licensee and contravened the National Consumer Credit Protection Act between June 2019 and April 2023, including:
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Dealing with unlicensed referrers.
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Failing to have adequate arrangements to manage conflicts of interest.
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Failing to supervise representatives and enforce proper compliance policies.
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Failing to ensure its credit activities were conducted efficiently, honestly, and fairly.
The breaches included cases where franchise staff submitted falsified payslips or altered customer financial details to push loan applications through.
In his decision, Justice Shariff described the misconduct as serious and said it exposed borrowers to the risk of entering unsuitable loans that could lead to hardship or default.
“The contraventions here were serious in that they pertained to obligations designed to protect consumers and regulate industry participants,” Justice Shariff said.
“I am satisfied that [RAMS’] contravening conduct exposed consumers to a risk of loss that the loans they entered may not have been suitable for their circumstances which also exposed them to a risk that they may have been unable to service their loans without substantial hardship, or may have defaulted on their loan repayments and incurred fees or charges, as a consequence of those defaults.”
Speaking last week, ASIC deputy chair Sarah Court said the case underscored the regulator’s commitment to holding lenders accountable for poor practices.
“Financial entities must adhere to their obligations under the law and consumers must be protected from lending practices which can expose them to harm,” Court said.
“ASIC will continue to scrutinise those involved in the whole home lending process and will hold financial institutions accountable for misconduct.”
Westpac first began exploring a sale of the RAMS business in early 2024, but terminated the process in April 2024 after failing to find a suitable buyer. It subsequently decided to wind down the brand, closing its RAMS Franchise Network in August 2024.
RAMS had operated as a stand-alone business within the Westpac Group since its acquisition in 2007, running through a network of independent franchisees and staff who offered RAMS-branded home loans that primarily targeted first home buyers and self-employed borrowers.
However, it was sued by the financial services regulator in June 2025, and a major court action was lodged in late May 2024 by former franchisees who alleged that the group unjustly terminated their contracts.
[Related: Pepper in talks to acquire RAMS portfolio]
