Non-major to sell mortgage portfolio

Australia’s fifth-biggest lender is looking to offload its non-branded mortgages.

ING Direct has put $1.5 billion worth of non-branded loans on the market following its September sale of a $1.5 billion tranche to Macquarie Bank.

Mortgage Business confirmed that Macquarie Bank purchased the loans earlier this year. They had been on the market since July.

Now another tranche has come to market, which once sold will reduce the non-major’s portfolio of non-bank white-labelled mortgages from $4 billion to $2.5 billion.

A source close to the situation said the sale is part of the bank’s ongoing strategy to move into the core banking sector and become the primary bank to its customers.

Non-branded mortgages are not conducive to the bank’s customer-focused strategy, signalling a move away from wholesale funding.

As the foreign-owned bank continues to harness its branded home loans, Macquarie – which has so far purchased $3 billion from the Dutch-owned lender, has been equally aggressive in its mortgage strategy.

Macquarie has seen significant growth in mortgage volumes in the past 12 months, with its loan book growing 68.9 per cent over the past financial year to $15.2 billion.

With substantial funding and free liquidity, Macquarie could even look to acquire ING Direct in the future, according to JP Morgan analyst Scott Manning.

“Potential acquisition targets over the next two years include ING Direct, ME Bank and the Australian subsidiaries of HSBC or Citi,” Mr Manning said.

ING Direct is now the fifth biggest lender in the Australian mortgage market with a total loan book valued at $41.3 billion.

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