Economy

NAB set to buy Wizard Home Loans

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National Australia Bank has announced it is in “advanced talks” to buy Wizard Home Loan’s brand and Australian distribution network.

National Australia Bank has announced it is in “advanced talks” to buy Wizard Home Loan’s brand and Australian distribution network.

Wizard’s current owner GE Money has been trying to offload Wizard since May, when the global conglomerate was battered by the credit crunch.

While there had been reports the Wizard founder Mark Bouris had been interested in finding investors to help him try and buy the company back, NAB has emerged as the front-runner to scoop up the chain, which has a network of franchisees across Australia.

NAB would not disclose the price, but said it was “not material” to the bank. This might indicate Wizard’s value has fallen sharply in recent years, given it was sold for $500 million in 2004.

NAB says 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.

NAB is yet to make a final decision on the acquisition, but it would be consistent with efforts of other big banks to expand their distribution network.

Westpac acquired the RAMS Home Loans brand in early 2008 and Commonwealth Bank acquired a stake in Aussie Home Loans in August 2008.

“The acquisition of Wizard would progress the NAB retail strategy of providing customers with products and services that match their individual needs using a multi-brand approach,” NAB said in a statement.

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