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By: Kate Miller
ING DIRECT is seeking to strengthen its position as a genuine alternative to the big banks by tapping into funding in wholesale markets.
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Executive director of mortgages at ING DIRECT Lisa Claes told The Adviser the bank planned to enter the securitisation market in order to diversify its funding base and improve its liquidity position.
According to Ms Claes the move would complement the bank’s existing strategy of raising funds through deposits and other non-securitised wholesale lending.
“This will support our aim of providing a genuine alternative to the big banks,” she said.
The lender is looking to complete its first RMBS deal by the end of the year and expects it to become a core component of its funding activities.
ING DIRECT’s move to strengthen its position in the mortgage market follows new data highlighting the big banks’ stronghold on the market.
According to figures released by APRA at the beginning of the month, the major banks held 76.5 per cent of all outstanding home loans in June this year. Furthermore CBA and Westpac held more than 50 per cent.
While ING DIRECT was optimistic about the opportunities securitisation markets presented its lending business Ms Claes said it was still an expensive source of funds with the amount of funding available much smaller than before the financial crisis.
“We do not believe that a lender can rely on this as its sole source of funds,” she said.
