Finance

Yellow Brick Road in trading halt as report suggests tie-up with Macquarie Bank

Engel Schmidl /

Australians may have a reason to stop complaining about the big four banks dominating the industry – it appears a fifth entrant may be in the works.

New reports of a tie-up between entrepreneur Mark Bouris’ Yellow Brick Road and Macquarie Bank have come just a day after NAB’s business banking chief told SmartCompany competition for small business loans is better than ever.

A report from Fairfax indicates Yellow Brick Road and Macquarie Group are in discussions about giving Bouris’ financial company access to loans which could be sold through YBR outlets.

YBR has been placed in a trading halt today, “pending the release of an announcement”.

It also suggests these loans could have lower interest rates by as much as one percentage point. ”This could provide the fifth pillar that our banking sector has always needed,” one source reportedly told the publication.

Macquarie declined to comment on the report, while a reply from Yellow Brick Road wasn’t available before publication.

This move wouldn’t be out of the blue for Mark Bouris, who founded Wizard Home Loans under a similar principle.

He’s also made several comments recently about the control the big four banks have over the home loans market. About a year ago, he told BRW he thinks the control banks have over the mortgage market is “unfair”.

He also recently wrote that with interest rates being so low, now is a good time to refinance or possibly buy a home.

Yellow Brick Road listed on the ASX last year, but hasn’t had the best ride. Since June 2011, its shares have fallen 42% to 24 cents, and have dropped by 17% in the last month.

Earlier this year it announced a rise in revenue, but a loss of $3.4 million for the six months to 31 December 2011.

The issue of credit for both home and business loans has been a key discussion in the business community over the past few years. The demand for alternative methods of funding has grown within both the general public and in government, sparking quick competition reforms.

Yesterday, NAB business banking chief Joseph Healy told SmartCompany he thinks the competition for small business loans is better than ever.

“From an SME perspective, it’s never been as good a time as it is now.”

 

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