Weekend Wrap: Former Aussie broker admits to multi-million dollar fraud

by AB09 Jul 2016
Making news this week, a former Aussie broker has admitted to 18 counts of fraud totalling over $5 million; a major aggregator reported impressive loan growth with an up lift in non-major market share; and APRA has warned banks that a fresh wave of capital raisings may be around the corner. 

An ASIC investigation uncovered that Madhvan Nair, a former mortgage broker with AHL Investments – trading as Aussie – submitted 18 loan applications totalling $5,594,559 containing false borrower employment documents. Of the 18 loan applications, 12 were approved and disbursed, totalling $3,721,684.

Nair admitted to the charges – which involved approvals for home loans from Westpac, National Australia Bank, and ANZ – through his solicitor. He will next appear in court on 30 August 2016 for sentencing.

AFG reported a boost in its overall loan book by 7% in the 2016 financial year, whilst reporting a big lift in non-major market share.

Loans settled by the non-majors grew to almost a third (29.1%) of AFG’s loan book, with AFG’s general manager of sales and operations, Mark Hewitt, calling this a “pleasing” result. AFG’s own white label AFG Home Loans products generated a market share of 7.2% for the final quarter.

Hewitt said the aggregator is also pleased with the growth given a backdrop of uncertainty.  

“The numbers are strong despite a turbulent run in to the end of the financial year and the longest election campaign in memory finally coming to a close,” he said.

Finally, APRA has warned Australia’s major banks may have to further increase their capital buffers, despite the extra $18 billion raised in new equity last year.

This warning has come despite a recent study published by the regulator showing that the common equity tier 1 (CET1) capital ratio of Australia's major banks were now in the top quartile of banks internationally.

“That said, the trend of international peer banks strengthening their capital ratios continues. Forthcoming international policy developments will also likely mean that Australian banks need to continue to improve their capital ratios in order to at least maintain, if not improve, their relative positioning,” APRA said.