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CBA to buy 33% stake in Aussie Home Loans
SYDNEY (Reuters) - Commonwealth Bank of Australia Ltd (CBA) (CBA.AX), the country No. 2 lender, agreed to buy a 33 percent stake in mortgage broker Aussie Home Loans, as Australian banks swoop on opportunities created by the global credit crisis.
CBA did not disclose the value of its investment. An industry source had told Reuters earlier on Friday that the bank would buy the stake in Aussie Home Loans.
CBA's decision to buy the stake in unlisted Aussie Home Loans is aimed at capturing a growing preference among Australian home loan seekers to get advice from independent mortgage brokers, it said.
"We understand that there are some consumers that seek the advice and assistance of mortgage brokers in helping them select a home loan option that best suits their needs and circumstances," CBA's Chief Executive Ralph Norris said in a statement.
"As this market continues to develop, a strategic investment in one of the market leading providers in this industry is a natural fit for the group."
Australia's A$1 trillion ($862 billion) home loan market has doubled in the past decade, but the pace of growth has slowed this year due to rising interest rates.
CBA, Australia's biggest mortgage lender, had been looking at various investment opportunities. Earlier this month it dropped out of the race to buy the Australian and the New Zealand business of ABN AMRO.
Aussie Home Loans, which is handles non-mortgage lending, was founded by entrepreneur John Symond about 15 years ago.
Its parent company, AHL Holdings, earned a net profit of A$20.3 million in 2007 fiscal year, up 7.3 percent from a year ago, according to a recent report in the Australian Financial Review.
Non-bank lenders have struggled as wholesale funding costs have risen sharply due to the global credit crisis.
Last year, Westpac Banking Corp (WBC.AX), Australia's fourth-biggest lender, bought the brand and distribution business of RAMS Home Group Ltd (RHG.AX) as the non-bank lender struggled to refinance its debt due to the U.S. subprime mortgage crisis.
General Electric Corp (GE.N) is also looking to sell its Australian mortgage business, which it is estimated will fetch about A$200 million.
($1=A$1.16)
(Reporting by Denny Thomas)
