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BankWest will withdraw its Rate Tracker home loan from the broker channel effective this Wednesday, raising questions about the lender’s long-term commitment to third-party distribution.
A BankWest spokesperson told Mortgage Business that “unanticipated volumes” and the bank’s “limited funds with which to meet scaling demand for the product” prompted the action.
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“The Rate Tracker product simply exceeded expectations,” the spokesperson said.
Despite its withdrawal from the broker channel, Rate Tracker will still be available via the bank’s expanding retail network.
Rate Tracker represents around 40 per cent of business channelled through BankWest’s third-party distribution network.
Overall, the broker channel accounts for approximately 75 per cent of BankWest’s mortgage lending business.
Troy Phillips, director and co-founder of brokerage FirstPoint NB, said the move was likely to “leave a sour taste” in many mouths.
“It does raise a whole lot of questions about BankWest’s commitment to the broker channel,” Mr Phillips said.
“The world is going a little pear shaped at the moment as funding pressures mount and all lenders are working to combat this.
“BankWest is definitely focusing on their retail network right now; this could be a high risk strategy in the current environment – I think it would be wise to keep a foot in both channels.
Alison Whittle, managing director of The Mortgage Detective, is also uncertain of the bank’s position within the third-party distribution channel.
“BankWest said they were very supportive of the broker channel yet they introduced a product [Rate Tracker] that’s not able to be distributed by brokers,” she said. “It’s another hit for the broker channel.”
Jennifer Nielsen, chief executive of Loan Market Group, does not believe BankWest’s decision to pull its Rate Tracker product is a signal that the lender would withdraw the broker channel.
Ms Nielsen said it was just a reflection of market conditions.
“The current market volatility is having a significant impact on all lenders,” she said.
“Presumably, BankWest has chosen a certain path that they believe will provide them with their long-term viability.”
Published: 29-07-08
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