Rumours circulate over Macquarie and Yellow Brick Road
(8 November 2012 – Australia) Rumours are abound that a fifth big player may emerge in the banking sector as Macquarie Group is believed to be in talks with Yellow Brick Road Group over a distribution deal that could be unveiled within the next week.
The deal would give Yellow Brick Road access to the billions of dollars sitting on Macquarie's balance sheet to provide home loans via a network of more than 140 branches across the country.
Well-placed sources revealed that Macquarie would return to the residential home loan business, and in a big way.
As an opening salvo, BusinessDay believes Yellow Brick Road and Macquarie plan to undercut the big four banks by more than a full percentage point on all new home loans.
''This could provide the fifth pillar that our banking sector has always needed,'' said a source close to the deal.
The deal marks a major strategic shift for Macquarie, which has seen many parts of its traditional investment banking model suffer in recent years.
Last month Macquarie announced a A$361 million profit for the six months to December. Of that Macquarie Capital, which houses the bank's once mighty mergers and acquisitions team, contributed just A$10 million.
Well-placed sources revealed that Macquarie would return to the residential home loan business, and in a big way.
As an opening salvo, BusinessDay believes Yellow Brick Road and Macquarie plan to undercut the big four banks by more than a full percentage point on all new home loans.
''This could provide the fifth pillar that our banking sector has always needed,'' said a source close to the deal.
The deal marks a major strategic shift for Macquarie, which has seen many parts of its traditional investment banking model suffer in recent years.
Last month Macquarie announced a A$361 million profit for the six months to December. Of that Macquarie Capital, which houses the bank's once mighty mergers and acquisitions team, contributed just A$10 million.
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