HSBC last week announced its return to broker distribution through an exclusive partnership with Aussie Home Loans. The group’s decision to begin working with brokers is significant, given its 10-year absence and recent fears within the industry around the future of broker commissions.
Speaking to Mortgage Business, the bank’s head of mortgages and third-party distribution Alice Del Vecchio explained that HSBC’s broker strategy in overseas markets helped inform the decision to partner once again with Australian brokers.
“One of the benefits of being a global bank is that we have listened to and looked at what our other sites are doing in terms of broking,” Ms Del Vecchio said. “We have learnt a lot form our overseas HSBC sites and brought that in to the country as well.”
In the UK, where HSBC is headquartered, the bank was notorious for avoiding brokers until its decision in late 2014 to begin distributing exclusively through Countrywide. It took the bank about 10 months to gradually open its distribution to more groups. The British bank has since partnered with a handful of major UK brokerages including Mortgage Advice Bureau, which recently opened its doors in Australia.
HSBC Australia appears to be taking the same slow and steady approach to its UK counterpart. For now the bank will partner exclusively with Aussie Home Loans. However, Ms Del Vecchio confirmed that HSBC will work with more groups over time.
Foreign-owned banks have traditionally supported the Australian broker market, which has provided a strong distribution channel in the absence of extensive branch networks.
ING DIRECT, which boasts the largest loan book of the foreign-owned banks, managed to maintain its position as the number one non-major bank in Australia, as voted by brokers.
Citi was ranked ninth in the 2016 Momentum Intelligence Third-Party Lending Report – Non-Major Banks, which surveyed over 800 brokers across 23 categories.
[Related: UK brokers to take 75 per cent market share]