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Jessica Darnbrough
Heritage Bank’s chief executive has slammed the Australian Competition and Consumer Commission’s decision “not to oppose” CBA’s acquisition of Aussie Home Loans.
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Yesterday, the ACCC announced it would not oppose the Commonwealth Bank’s bid to acquire full ownership of Aussie Home Loans, which has a franchise network of around 750 mortgage brokers around Australia.
According to the bank’s chief executive John Minz, the decision will perpetuate the confusion caused by the big banks’ “multi-branding” strategy – setting up or acquiring smaller brands that then give the impression they are independent.
“This strategy is creating a false impression among customers that there is a high level of competition in the marketplace, but in reality a number of these so-called competitors are actually part of the big banks themselves,” Mr Minz said.
“Brands like St George Bank, BankSA, Ubank, Bank of Melbourne, Bankwest – as well as RAMS and now Aussie Home Loans – are all owned by the big banks. People may be surprised to know that by supporting brands like this they are not striking a blow for competition but are actually entrenching the dominance of the big banks.”
A survey commissioned in January by Abacus, the peak body that represents the customer-owned banking sector, showed that almost 50 per cent of respondents did not have a clear understanding of bank ownership of smaller and regional banks and lenders.
The survey also found that 50 per cent of Australians believe that the dominant share of home loans by the big four banks is a bad thing for the country, while 65 per cent agree that there is not enough competition in the Australian banking system
“Clearly people are confused about the ownership of the smaller lenders, with the multi-branding approach of the big banks reinforcing this mask of competition. The decision on Aussie Home Loans will only perpetuate this confusion," Mr Minz said.
“Customers need to be very wary and the big banks should be required to make very clear their ownership of smaller brands that give the impression of being competitors.”
