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Jessica Darnbrough
While competition between the majors is heating up, one industry figurehead believes the story is somewhat different for Australia’s second tier lenders.
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Aussie chief executive officer Stephen Porges said the current state of the RMBS market was stopping the nation's smaller lenders from being a true alternative to the majors.
“There’s a lot of talk that the second tier will come back in to competition. I don’t believe that. They pretend, but they don’t have any volume. We haven’t seen any of the second tiers change their business model, so any business that is reliant on the RMBS market won’t be able to truly compete,” Mr Porges told The Adviser.
“They might be able to get one deal away, but they won’t be able to fund anymore.”
But while Mr Porges believes the only lenders aggressively competing in the mortgage space at the current time are the four majors, it seems not everybody shares this view.
RFI director Alan Shields said the second tier market should not be discarded.
According to Mr Shields, some of the bigger second tier lenders have come out with aggresive price structures in recent weeks, indicating that they are a true alternative to the majors.
“Bankwest and ING Direct have both come out with aggressively priced products. So, in this respect, I don’t think we can say the entire second tier market is uncompetitive,” he said.
“I do think some of the second tier lenders have been relatively quiet, but I guess it is horses for courses.”
