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Broker Reservations ANZ's National Band Purchase
Broker head has reservations for ANZ purchase of
National Bank
New Zealand mortgage brokers have reservations about the takeover of the National Bank.
ANZ bank bought the National Bank for $nz5.7 billion, it was announced today.
New Zealand Mortgage Brokers Association (NZMBA) said they were anxious whether the purchase is in the best interests of New Zealand.
Chairman Brian Berry said he supported the structure, providing the actual result is true to the stated intention. ``It is a good result that the two brands will be run alongside each other, however there are still reservations.
``We will have to wait and see if the purchase is the best option for the banking sector and general population. ``The degree of autonomy will be watched closely and with interest, especially with regard to the mortgage industry.’’ Both lenders had quite different risk profiles relative to their mortgage books, Mr Berry said.
Their assessment criteria - for who should get a mortgage and what the maximum mortgage can be - were quite different.
If both assumed the same criteria some home buyers and especially first home buyers could be cut out of being able to purchase at current/future market prices, he said. ``Similarly, the National Bank currently underwrites its own risk on low deposit or first home buyer deals and has more flexibility around deposit requirements than the ANZ which has its risk underwritten by a lenders mortgage insurer. ``A cynical person could suggest that, once the transaction is complete and backroom services are amalgamated, the branch networks will then be looked at with a view to rationalisation, despite statements there is no material change intended to the total number of branches in New Zealand. ``We will watch with interest to see how the reality of this deal unfolds in the next 18 months.’’ The Reserve Bank has approved ANZ bank’s take over of National subject to conditions. The size of the NZ mortgage market is around $70 billion in total. Mortgage brokers account for approximately 28 percent of loans. The NZMBA has more than 575 members.
Copyright 2003 Word of Mouth Media NZ
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