ING Direct’s much-touted position as Australia’s fifth biggest lender behind the four major banks and their subsidiary brands could come under threat from a surging Macquarie Bank eager to pick up a greater share of the mortgage market.
While Macquarie Bank has more than doubled its home lending arm in the space of a year, albeit from a low base of less than $2.8 billion to in excess of $6 billion, ING Direct’s $37 billion mortgage book has hardly expanded in the past year, APRA banking figures show.
APRA figures show an ING Direct loan book of $37.5 billion as of February 2013 compared with a $37.2 billion loan book 12 months ago.
Macquarie also has a securitised mortgage portfolio of $5.9 billion (ING Direct has no wholesale lending arm) which it using to help fund mortgage lending in Mark Bouris’ fast growing Yellow Brick Road franchise business of around 150 offices, in which it also has an 8.3% holding.
Macquarie Bank, a subsidiary of investment banking giant the Macquarie Group, quit the mortgage market in the wake of the GFC. Prior to the crisis it was predominantly a wholesale mortgage lender, providing funding for the likes of Virgin Money, via its PUMA securitisation program.
While Macquarie clearly has some way to go before it has a loan book to rival that of ING Direct it has a bigger source of retail deposits to lend against – $35.6 billion compared with ING Direct’s $31.7 billion and a stronger domestic balance sheet with local assets totalling $59.6 billion compared with ING Direct’s $49.2 billion.
Macquarie is not hiding its aspirations in the mortgage space.
As part of its annual operational briefing in February, Macquarie Group CEO Nicholas Moore noted the group’s expanding $11.1 billion mortgage portfolio and that “originations are expected to continue to grow significantly in the 2013 calendar year”.
Macquarie Bank’s deal to fund Yellow Brick Road was highlighted by Business Spectator’s Robert Gottliebsen earlier this year, who wrote that a mortgage and deposit war could erupt on the back of the cheap funding available to the Yellow Brick Road franchise network.
Tale of the tape – Feb 2013
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Loans to owner occupiers $3.4 billion
Loans to investors $2.86 billion
Securitised loans: $5.9 billion
Total deposits $35.6 billion
Total resident assets $59.6 billion
Loans to owner occupiers $27.8 billion
Loans to investors $9.7 billion
Securitised loans: $0 billion
Total deposits $31.7 billion
Total resident assets $49.2 billion
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