NAB may have to sell aggregator

Ian Rogers
There is speculation that National Australia Bank will have to sell one of three mortgage aggregation business being acquired from Challenger Financial Services Group in order for the purchase to proceed.

The Herald Sun reported that the Australian Competition and Consumer Commission may seek undertakings from NAB to divest one of three businesses, PLAN, Choice and FAST, to bring NAB's share of the mortgage broking market to below 40 per cent. The newspaper estimated the current market share of these three at 45 per cent.

NAB agreed to pay Challenger $385 million for Choice Aggregation Services, FAST and PLAN in a deal announced last week.

Of these three, FAST probably has the smallest business flows.

Australian Finance Group, Aussie Home Loans and Mortgage Choice are the dominant forces in mortgage aggregation, followed by the trio of Challenger brands. Aggregation provides an avenue for small brokers to deal with lenders, as well as providing systems and support.

There is anecdotal evidence of big banks becoming increasingly impatient with smaller brokers and also with efforts by some of them to establish new aggregation businesses.