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Staff Reporter
1300HomeLoan chief executive John Kolenda has rejected claims by some of the industry’s key stakeholders that only the big will survive in the future.
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Earlier this year, Aussie executive director James Symond said Australia’s biggest aggregators will continue to grow in size, leaving less room for the smaller players.
"I have said it in the past and I will say it again, I believe the big will get bigger and the small will become state-based and boutique. You either need to get very large and go national, or stay small and stay specialised,” he said.
But Mr Kolenda has refuted the claims, arguing that size brings brokers as many problems as benefits.
He said it was obvious to most brokers that aggregators spruiking the benefits of consolidation were on the acquisition trail and seeking to persuade independent brokers to sell out. Their rhetoric was driven by that aim.
Mr Kolenda, who was at the forefront of consolidation in his roles at X Inc Finance and Loan Market Group, said in his experience smaller networks enjoyed many advantages over their larger peers.
“I have experienced the pressure of thinking I needed to consolidate once before when X Inc merged with Loan Market and the big driver for that was that we believed a bigger group was more secure especially when negotiating with lenders,” Mr Kolenda said.
“It’s true that there were many benefits of the merger to brokers but, in hindsight, while scale is one part of value, banks focus on application and loan quality just as much as size.
“I don’t think I’d rush to consolidate for size again. Smaller groups are tighter, better connected, faster to react and more able to help each other and truly keep standards high.
“Many of the major aggregator groups are shackled by old thinking, dressed up IT legacy systems and by their sheer scale.”
