Login
ISCOVER
Jessica Darnbrough
The National Consumer Credit Protection Act has resulted in widespread industry consolidation, new data has revealed.
To continue reading the rest of this article, please log in.
Looking for more benefits? Become a Premium Member.
Create free account to get unlimited news articles and more!
Looking for more benefits? Become a Premium Member.
According to the latest statistics from Market Intelligence Strategy Centre, there are currently just 138 active loan writing brokerage groups in the industry – 27 per cent less than this time last year.
But despite the contraction, the data shows these fewer broker groups actually wrote 7 per cent more business in the December quarter, suggesting it was part-time brokers that have dropped out of the industry.
This equated to $14 billion in new lending settled for the months of October, November and December 2010.
The top 5 broker groups, according to the MISC Lender and Broker Cooperative Industry Pool, accounted for 56.4 per cent of all broker loans. But this high level of concentration showed clear signs of competitive pressure.
A year earlier the top 5 broker groups wrote 60 per cent of all broker loans. By comparison, the remainder of the top 20 broker groups increased their market share from 34 per cent to 36 per cent of all settlements on the latest full quarter results.
This industry wide consolidation comes as no surprise to industry pundits.
Earlier this year, Aussie chief executive Stephen Porgess told The Adviser that the onerous responsible lending obligations and education requirements being pushed upon the industry by the new legislation would adversely impact the number of players within the mortgage space.
“There is no doubt we will see a lot more consolidation in the industry moving forward. The amount of time, money and effort we put into being ready for the new regulation is extraordinary. It is our number one focus. And, if we are struggling, and we are struggling to keep up with it because it changes on a day to day basis, I do not understand how the smaller players can cope with all the changes,” he said.
