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The high margins Australia's banks currently make on mortgages could encourage Japanese banks to push into the Australian market, Yellow Brick Road's Mark Bouris has claimed.
Last week, The Australian Financial Review reported that two of Japan's three large banks are thinking of breaking into the Australian mortgage market, which is currently dominated by four big groups.
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It is understood that the Japanese currently save more than they borrow, meaning they have more deposits than they need to fund their loan books.
Despite this, Mr Bouris said it is unlikely that a Japanese bank could sell a mortgage any cheaper than what is currently on offer.
The Japanese banks would ultimately lose their comparative funding advantage once they insured themselves against currency risk.
Mr Bouris said he wouldn't be surprised to see a Japanese bank join forces with a non-bank lender to ensure access to customers.
