Non-major to make broker channel comeback

by Madelin Tomelty01 Dec 2016
Non-major bank HSBC has announced it is returning to the broker channel in April 2017, ten years after exiting the third party mortgage distribution sector and selling its broker-originated loan book to RESIMAC, according to the Australian Financial Review (AFR). 

The news comes as a surprise to some, given the bank’s ten year hiatus, but less so for others, given HSBC has been missing out on a big piece of the home loan pie for the last ten years, with mortgage brokers now writing over 53% of all home loans in Australia.

In her role as head of Mortgages, HSBC’s Alice Del Vecchio is steering the bank’s re-entrance into the third party distribution network, after six years in mortgages at HSBC and a previous role as the national head of mortgages at Aussie.

HSBC has already deployed existing staff to the emerging third party division, the AFR has reported, and it is also hiring business development managers ahead of the April launch date. 

HSBC made the news in 2015 when it scaled back its lending to property investors in the wake of APRA’s decision to apply growth caps on investor lending at the end of 2014.

The bank ultimately stopped lending to new to bank property investors, however having decreased its investment loan book by $470 million over the past 12 months, HSBC now appears to be relaxing its clampdown and focusing on growth through distribution.

APRA’s latest lending data shows HSBC’s loan book to be valued at $10.2 billion, with over 50% of this attributed to owner occupiers ($5.5 billion). $4.7 billion is attributed to investors. To put this into perspective, Citigroup has $7.1 billion in housing loans and ING Direct has $39.4 billion.

HSBC recently announced the opening of a private bank in Australia aimed at wealthy customers whose companies alaready use the corporate or retail bank.

HSBC's local boss Tony Cripps said this move illustrated the lender’s focus on Australia as a "priority growth market,” according to the AFR.