Yesterday’s ACCC announcement that it would not oppose CBA’s proposed acquisition of the remaining 67% of the issued capital in Aussie Home Loans has one lender’s CEO claiming the outcome underlines a major lack of transparency in the banking sector.
The ACCC says Aussie’s franchise network of approximately 750 brokers have access to a ‘range’ of lenders’ mortgage products, and receive the benefit of Aussie’s brand recognition as well as administrative and technical support services.
ACCC chairman, Rod Sims, says these brokers may supply white label products, financed by a third party lender such as CBA, but rebranded as own-brand home loan products of Aussie Home Loans.
"In reaching its view, the ACCC took into account the competitive constraint arising from the presence of a number of alternative suppliers of home loan products and mortgage distribution services.”
While Aussie franchisee brokers will still wish to offer home loans from a range of lenders, CBA is likely to have the ability and incentive to increase the volume of, for example, white label home loan products supplied through the Aussie network – and this doesn’t sit well with Heritage Bank CEO, John Minz.