Suncorp pays maximum commission
One measure of the recent underperformance of Suncorp Metway in the home loan market is a change of tack this week by the bank on the level of commissions the bank will pay to brokers for originating a loan.In an email to brokers this week Suncorp advises that the bank will pay the maximum commission on new loans until 1 March 2009. That is, no "bonus" payments apply for "performance", such as those that relate to the volume of loans, quality of application and electronic submission.Following recent adjustments to home loan commission by Suncorp and other lenders earlier this year Suncorp already ranked as the funder offering the most generous commissions.Suncorp's first-year commission maximum of 80 basis points compares with a commission of between 50 and 70 basis points on a loan originated from a big bank (though Suncorp does not pay any trail commission in the first year).Brokers are viewing this commission pricing as a sign of Suncorp's desire to increase demand against the background of an unusually weak credit market. Suncorp did not respond to a request for comment.