Aussie Home Loans’ John Symond has successfully reinvented his business several times. The major banks will take his attempt to re-engineer Aussie yet again very seriously.
Symonds entered the industry as a mortgage broker before embracing the opportunity created by the development of the securitisation market to originate his own product in the mid-1990s
Initially ignored by the majors, Symonds, whose funding was provided by Macquarie, changed the landscape and forced the dramatic slashing of margins on home loans by Commonwealth Bank’s then chief executive, David Murray, in 1997. Overnight margins were nearly halved. Once above 400 basis points they headed inexorably towards 200 basis points.
Then, as he told Business Spectator in a KGB TV interview, he became uneasy about Aussie’s reliance on securitisation and largely retreated to pure broking. Now, having sold a third of his business to Commonwealth, and acquired the Wizard Home Loan’s distribution network from GE at a crisis-induced discount price, he wants to re-orient the model back towards origination.
A new assault by Aussie on the home loan market would be welcomed by consumers and regulators alike. The acquisitions of St George by Westpac and BankWest by CBA, the retreat of many foreign banks, the shrinkage of the regional banks because of their funding constraints and the effective demise of the non-bank lenders as the securitisation market froze have created unprecedented concentration and dominance of home lending by the majors.