Tuesday 18th August 2009 |
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National Australia Bank, the parent of Bank of New Zealand, will buy Challenger Financial Services’ mortgage broking business, adding residential mortgages and a stake in Homeloans.
The bank will pay some A$385 million for the white label mortgage management business, acquiring a portfolio of around A$4 billion worth of residential mortgages at a discount rate. The deal will give NAB a 17.5% interest in Homeloans with the option of taking a 41% share, the price of which is included in the announcement.
“The acquisition of the Challenger mortgage management business increases NAB’s presence in the important broker distribution segment,” said chief executive Cameron Clyne, in a statement.
Last month, NAB moved into wealth management with the purchase of 80% of Goldman Sachs JBWere, and life insurance with Aviva Australia, spending around A$1.3 billion on the takeovers.
The Challenger deal follows Commonwealth Bank of Australia taking on BankWest and buying a stage in Aussie Home Loans, which itself recently purchased Wizard.
The shares slipped 1.4% to A$26.71 on the ASX in trading today. Clyne said the new broking business will keep its existing management, reporting to NAB Broker, and will be run as a separate entity.
The bank expects to see a return on the new business in the first year. The acquisition is subject to regulatory approval by the Australian Competition and Consumer Commission.
Businesswire.co.nz
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