ACCC launches CBA/Aussie review

by Mackenzie McCarty16 Jan 2013

ACCC has issued a review of CBA's move to majority ownership of Aussie Home Loans, raising questions regarding whether the mortgage broker will remain competitive under the control of the major bank.

As part of the review, the consumer watchdog will examine Aussie and CBA's role in mortgage distribution services, including how they provide mortgage brokers with access to a panel of lenders.

ACCC says it feels CBA's Finconnect business, which distributes mortgages through professional firms, could be a stumbling block to the deal, given the extent of crossover in mortgage broking.

The commission will consider whether Aussie Home Loans is a ''unique or a vigorous'' competitor in the mortgage market and if CBA will have the "ability and incentive to foreclose its banking competitors from accessing".

It will also look into whether the move to majority ownership ''will increase prices or profit margins or decrease the quality of products'' on offer.

As reported in Australian broker last month, CBA announced its plan to increase its holding in Aussie Home Loans to 80% in December. John Symond will continue as executive chairman of Aussie and will retain the outstanding 20% shareholding.

The deal also gives CBA an option to move to 100%, which the bank is expected to act upon by August 2018.

Industry participants have until January 31 to provide their thoughts and inputs, with the ACCC to announce its findings on March 7.

 

COMMENTS

  • by Richard 16/01/2013 9:54:07 AM

    What a waste of time this is. The market is competitive. I don't see CBA charging high rates because of its size. Brokers would simply sell other products if they tried. Brokers will always keep the big boys honest, no matter who owns their businesses.

  • by 1martym1 16/01/2013 9:54:34 AM

    I doubt they will block it. If they do I for one will view it as a really positive sign for the value of the broker proposition in general.

  • by ozboy 16/01/2013 9:57:20 AM

    So all those people who vented here can now vent to the ACCC. Let us know when you do! ;-)