The key players on how the Financial System Inquiry recommendations can help their sector in 2015.
The key players on how the Financial System Inquiry recommendations can help their sector in 2015.
‘Non-banks’ is not a particularly useful term for brokers. While MPA’s roundtables have been able to bring Australia’s major banks and leading non-major banks into single rooms, there is an extraordinary diversity of lenders beyond the traditional banking sector. This is our guide to that sector, as voiced by the lenders themselves.
How can the recommendations of the Financial System Inquiry help the non-bank sector and your business in particular?
PEPPER: The recommendations of the FSI are in our view broadly ‘neutral’ to ‘positive’ for the non-bank sector, and positive for Pepper specifically. To an extent that banks and other authorised deposit taking institutions (ADIs) are required to apply higher-risk weightings to residential mortgages, this may result in minor adjustments (namely increases) in loan pricing to accommodate their higher internal capital allocation charges. This would directly benefit Pepper’s comparable loan pricing, particularly for our uninsured Pepper Prime product range.
THINKTANK: To the extent that there is no ensuing bias towards any particular segments of the market, a more robust, equitable and transparent financial system is unarguably beneficial in supporting the outlook for the non-banks ector and its stakeholders. Our business will benefit from greater clarity from the government around the proposed prohibition of lending within SMSFs, which we do not believe will be adopted in full.
HOMELOANS: Homeloans is not a balance-sheet lender, and we benefit from the funding advantage of our larger funders. Our strategy is to source funding from a variety of partners to ensure we deliver a comprehensive range of competitively priced products. Expanded data sharing under the comprehensive credit reporting regime will benefit Homeloans and brokers, improving our ability to individually assess credit applicants, as we do not credit score.
BETTER MORTGAGE MANAGEMENT: [There is] very little to help the non-bank sector directly in those recommendations. However, the extra capital requirements imposed on banks may mean they need to concentrate more on business lending and become slightly less competitive in housing, making other lenders more competitive.
LIBERTY: The review is a step in the right direction to improve consumer choice, as the banks’ dominance is definitely a problem for the industry and consumers in general. The reality is that non-banks need to continue providing outstanding service and solutions regardless of any regulatory change, to compete with the banks, as any change will take some time to pass through.
‘Non-banks’ is not a particularly useful term for brokers. While MPA’s roundtables have been able to bring Australia’s major banks and leading non-major banks into single rooms, there is an extraordinary diversity of lenders beyond the traditional banking sector. This is our guide to that sector, as voiced by the lenders themselves.
How can the recommendations of the Financial System Inquiry help the non-bank sector and your business in particular?
PEPPER: The recommendations of the FSI are in our view broadly ‘neutral’ to ‘positive’ for the non-bank sector, and positive for Pepper specifically. To an extent that banks and other authorised deposit taking institutions (ADIs) are required to apply higher-risk weightings to residential mortgages, this may result in minor adjustments (namely increases) in loan pricing to accommodate their higher internal capital allocation charges. This would directly benefit Pepper’s comparable loan pricing, particularly for our uninsured Pepper Prime product range.
THINKTANK: To the extent that there is no ensuing bias towards any particular segments of the market, a more robust, equitable and transparent financial system is unarguably beneficial in supporting the outlook for the non-banks ector and its stakeholders. Our business will benefit from greater clarity from the government around the proposed prohibition of lending within SMSFs, which we do not believe will be adopted in full.
HOMELOANS: Homeloans is not a balance-sheet lender, and we benefit from the funding advantage of our larger funders. Our strategy is to source funding from a variety of partners to ensure we deliver a comprehensive range of competitively priced products. Expanded data sharing under the comprehensive credit reporting regime will benefit Homeloans and brokers, improving our ability to individually assess credit applicants, as we do not credit score.
BETTER MORTGAGE MANAGEMENT: [There is] very little to help the non-bank sector directly in those recommendations. However, the extra capital requirements imposed on banks may mean they need to concentrate more on business lending and become slightly less competitive in housing, making other lenders more competitive.
LIBERTY: The review is a step in the right direction to improve consumer choice, as the banks’ dominance is definitely a problem for the industry and consumers in general. The reality is that non-banks need to continue providing outstanding service and solutions regardless of any regulatory change, to compete with the banks, as any change will take some time to pass through.
