CBA takes control of Aussie Home Loans
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John Symond . sold a bigger stake of his mortgage broking business to Commonwealth Bank. Photo: Louie Douvis
‘‘Aussie’’ John Symond, famous for rallying against the big banks nearly two decades ago, has sold a bigger stake of his mortgage broking business to Commonwealth Bank, the nation’s biggest bank.
CBA is set to increase its holding in Aussie Home Loans, to 80 per cent for an undisclosed amount. This is up from the 33 per cent stake it acquired four years ago.
Banking analysts estimate CBA would have paid Mr Symond at least $165 million for the 47 per cent stake. This is equivalent to little more than a week of of earnings for CBA, the nation’s biggest lender.
The calculation is based on value of between $350 million and $400 million for the business. However, analysts caution a valuation at the top end would be optimistic given a subdued mortgage market.
Mr Symond will continue as executive chairman of Aussie and will retain the outstanding 20 per cent shareholding, while continuing to be involved in the growth and direction of the company.
“We welcome this arrangement as CBA’s increased interest in Aussie is a great opportunity for the company to further accelerate our growth. We now have the opportunity to grow by investing in our product and service offerings and will remain a strong competitor in the mortgage broking channel,” Mr Symond said.
Aussie Home Loans last year returned a profit of $32.6 million, down from $51.7 million a year earlier. The business last year had net tangible assets of $138.5 million.
Even with the business majority owned by Commonwealth Bank, Aussie will continue to sell home loans through its panel of 18 lenders.