The new international banking regulatory framework, Basel III, could help Australia’s non-bank lenders steal market share from the big four.
Speaking to The Adviser during the first round of judging for the Australian Lending Awards in Sydney yesterday, RESIMAC’s chief operating officer Allan Savins said the new wave of regulations set to take effect over the next couple of years could significantly benefit the non-bank sector.
“As and when Basel III comes into play, I believe the major lenders will become a prime retail mortgage shop because of the capital requirements that are forced on them,” Mr Savins said.
“This will bring opportunities for the non-bank sector as it will allow us to play in areas they cannot, such as higher risk lending. And, any higher risk lending we do will ultimately bring higher returns.”
But while Mr Savins is optimistic that the new international regulatory framework will pay dividends for non-bank lenders, not everyone is convinced.
Liberty Financial’s national sales manager John Monacheff said while Basel III was an interesting beast and did affect the banks, it would also affect non-banks.
“I think a lot of people believe that the Basel III requirements will only affect the banks, but this is not the case,” he said. “I believe ASIC and APRA will have a long hard look at some point at all of the lenders and look to subject the ones that don’t fall under the Basel III requirements to some of the changes.”
“As non-banks, we might not be subject to all of the requirements, but definitely some. So I don’t think the new framework will be largely beneficial to us.”