Rams ditches brokers

Mortgage aggregators still dealing with Rams learned yesterday of the bank's decision to withdraw Rams-branded loans from the broker channel.

The key line in the media statement, and echoed in communications to brokers and staff, was that "it has become clear that pursuing a dual distribution model in the current environment is not the best use of our resources."

Brokers will lose access to Rams loans from the end of February.

Funding costs - meaning internal funding costs from the Westpac treasury - are one driver of the decision.

Westpac said in November that Rams accounted for more than 20 per cent of growth in home lending over the year to September 2009.

Line management of Rams tried yesterday to portray the decision as one of Rams' management, though there are other indicators that Westpac group management wants to slow home loan growth.

The reduction in loan to valuation ratios is one of those indicators, as was the rise of 45 basis points in home loan pricing announced last month, a rise matched by no other major lender.