(18 August 2009 – Australia) NAB has added to its banking business in Australia to fuel future organic growth, with the purchase of Challenger Financial’s mortgage management business for A$385 million.NAB chief executive officer, Cameron Clyne, said that this was an opportunity to enhance the bank’s organic growth capabilities.
The purchase includes the PLAN, Choice and FAST mortgage aggregator businesses and Challenger’s multi-brand ‘white label’ product capability.
In addition, NAB will also receive a select portfolio of approximately A$4 billion of residential mortgages at a 22 basis point discount to face value for loan loss provisions.
With the securitisation market effectively closed at present, Challenger was struggling to fund this particular batch of mortgages.
NAB’s purchase also a includes an maximum possible interest of approximately 41 percent in listed mortgage origination company Homeloans Ltd, subject to shareholder approval.
NAB personal banking group executive, Lisa Gray, said that the acquisition increases NAB’s presence in the important broker distribution segment, with Challenger’s national network including around 5,700 brokers.
The existing management team will be retained and continue to run the business as a separate entity reporting to NAB Broker within NAB Personal Banking, Gray said.
The bank is making use of its solid status and the current market conditions with a third purchase in recent months, after the acquisitions of Aviva in Australia and the private client broking business of Goldman Sachs JBWere.