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City Pacific and ABF join forces

by Staff Reporter9 minute read
The Adviser

‘Stronger’, ‘different’ and ‘new’ are the plain but accurate trump cards in Jonathan Grasso’s vocabulary at the moment.

As CEO of the recently purchased mortgage management group Australian Beneficial Finance (ABF), Grasso has had his work cut out preparing the company’s sale to franchise broking group City Pacific Finance.

ABF mortgages are distributed by 89 mortgage brokers; the mortgage manager has a $115 million loan book. City Pacific Finance’s purchase of ABF, according to the company, will underpin its brokers’ offering to clients that seek non-bank lender mortgages.

The sale is yet another indicator of a changing mortgage market, and as Grasso describes, mortgage managers need to make strategic decisions about their futures.

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“Our decision to accept City Pacific’s offer to purchase ABF was a natural and logical business decision. We share a similar attitude towards the market, so the union was simply a matter of turning that synergy into a sound business strategy.”

According to Grasso, finding a service proposition for most mortgage managers in the next twelve months will be a challenge as the market continues to tighten.

“The mortgage market is transforming as we speak. Many mortgage managers are already re-visiting their offering as the market begins to place value in other areas and services – such as the relationships, and capabilities, they can offer aggregating groups,” he says.

Brendan O’Donnell, Choice Aggregation Services’ head of sales and marketing, agrees that the market may see more deals such as City Pacific’s acquisition of ABF take place as the industry evolves.

“Most of the top five aggregators in Australia have mortgage management capabilities, and if they don’t already, it’s certainly something they are considering. While bourgeoning components of their businesses it is still important, however, for aggregators to focus on their core role as a distributor in the market.”

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