Macquarie Group (ASX: MQG) has seemingly spent the past few years in the wilderness, having been forced to re-evaluate and rejig its business model for a post-GFC world. It appears the diversified investment bank is re-emerging with renewed confidence and a plan to grab a greater share of the Australian home loan market.
Last week, with surprisingly little fanfare, Macquarie purchased 19.8% of Homeloans (ASX: HOM). Homeloans has a market capitalisation of $100 million and provides mortgage origination primarily through mortgage brokers. Interestingly, Macquarie purchased its stake from Challenger (ASX: CGF) who presumably has decided it was a non-core investment. Any ambitions Macquarie has to grasp control of Homeloans however, are going to depend on the National Australia Bank (ASX: NAB), who owns 17.8% of the company as well.
Macquarie’s jockeying for position to snare more of the lucrative home loan market has also seen it recently do a deal with Mark Bouris and his listed venture Yellow Brick Road (ASX: YBR). Meanwhile Commonwealth Bank of Australia (ASX: CBA), which is the largest home lender in the Australian market with a 25% market share has recently purchased the remaining 67% of Aussie home loans that it didn’t already own.
One this is for sure — the big 4 banks won’t be giving up market share without a fight. However, with the home loan market estimated at $1.1 trillion and the 4 big banks controlling the lion’s share of the market, there is certainly opportunity for smaller players to grab a larger slice of the pie.
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