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The battle to take control of Wizard Home Loans, as reported a few weeks ago by Marquette Turner, is over. Despite expectations that National Australia Bank would take control of the brand and franchise network, the race has been won by Aussie Home Loans.
GE Money has offloaded its Australia and New Zealand mortgage offshoot for an undisclosed amount, but it is likely to be considerably less than the $400 million AUD it paid for it, given the drastic changes in the economic climate.
As part of the deal, the Commonwealth Bank of Australia (CBA) will sell its 33% ownership of Wizard to Aussie Home Loans, whilst at the same time acquiring up to $4 billion AUD of mortgages originated by Wizard, dealing another blow to NAB’s expansion efforts.
The deal suggests that the non-bank sector still has some life in it yet.
The sale of Wizard to Aussie Home Loans is expected to be completed by the end of February 2009, around the same time that CBA will take hold of the first $2 billion AUD of loans by the end of February 2009. CBA remains in discussions with GE Money over acquiring the additional $2 billion of loans.
After losing their market share to mortgage brokers during the real estate boom years in the earlier years of this decade, Australia’s banks are on the offensive.
First off the market his year was Westpac which acquired the RAMS Home Loans brand, followed by the Commonwealth Bank which acquired a stake in Aussie Home Loans in August 2008.
Now National Australia Bank has revealed that is planning to purchase the Wizard Home Loan’s brand and Australian distribution network, no doubt for considerably less than the $500 million AUD now embattled GE Money purchased the company for in 2004.
NAB has also stated that it is also negotiating to acquire up to $4 billion of prime mortgages from Wizard. The bank says the portfolio is made up of mortgages with a maximum loan to valuation ratio of 90% and is 100% mortgage insured.
Does this mean that ANZ will be the next to make a purchase?