Aussie Home Loans John Symond slams bank reforms as pathetic, but CBA boss Ralph Norris says market is highly competitive

Aussie Home Loans founder John Symond, the man credited with pioneering Australia’s non-bank lending sector, has slammed the Government’s lending reforms as “pathetic” and says more needs to be done to support non-bank lenders.

However, the man who sparked the inquiry, Commonwealth Bank boss Ralph Norris, who was the first to jack rates well above the RBA’s official rate rise in November, says the banking system remains “highly competitive” and has warned against any moves that may weaken the sector.

Aussie John, as Symond is best known, told the inquiry that attempts by Treasurer Wayne Swan to turn the credit unions and building society sectors into a “fifth pillar” of Australia’s banking sector were a joke, and said the mutuals lacked the infrastructure to compete with the big banks.

He said more funding needs to be provided to the residential mortgage backed securities market, where non-bank lenders had access to big pools of funds prior to the GFC.

While the Government has promised to pump another $4 billion into the RMBS market, Symond says this “wouldn’t touch the sides”.

“It’s disappointing that the Treasurer has failed to consult with the sector that brought competition into the market – the non-bank lenders,” Symond told in inquiry.

“It’s the non-banks which have been shut out of the funding environment. There’s nothing in these initiatives that help those that brought competition into the marketplace.”

“It wasn’t the banks or the mutuals that brought in competition. The suggestion that the mutuals can become a fifth force is a joke. They are small corner stores.”

But Symond was forced to defend his position supporting the non-bank lenders, given he sold 33% of his business to the Commonwealth Bank in 2008.

He insisted CBA was a passive investor. “They have no say in how I run my business.”

This morning, it was the turn of CBA boss Ralph Norris to front the inquiry and take up the mantle of defending the big banks.

Norris argued that the Australian banking sector is competitive and pointed to strong competition for retail deposits as evidence of this.

Norris also warned against excessive regulation for the banks and argued that it was essential for a strong economy that the banking sector remained strong.

“Getting the balance right is absolutely crucial.”

Norris gave a cautious endorsement to the banking reforms, saying that parts of the package should help competition, although this would only be able to be judged with the benefit of hindsight.

“I think some of the elements in the package obviously do assist in providing more competitive access to funding.”

“I think the initiative around covered bonds is a good one, I think the additional funding provided through the AOFM (Australian Office of Financial Management) is obviously of benefit to smaller players.”


Notify of
Inline Feedbacks
View all comments
SmartCompany Plus

Sign in

To connect a sign in method the email must match the one on your SmartCompany Plus account.
Or use your email
Forgot your password?

Want some assistance?

Contact us on: or call the hotline: +61 (03) 8623 9900.