subscribe to our newsletter

Non-banks are not bottom feeders: Firstmac

Firstmac managing director Kim Cannon has urged the mortgage industry to recognise the role that non-banks play in the prime lending space.

Mr Cannon has sought to dismiss claims which suggest that non-bank lenders are expanding market share by using “less rigorous” credit standards.

“Some banks and commentators continue to talk about non-bank lenders as if we are basically competing for the scraps at the lower end of the market using less stringent credit standards, but the truth is that Firstmac is competing with the banks for prime loans and beating them,” Mr Cannon said.

“We wrote more than $3 billion worth of loans in 2017–18 and every one of them was a prime loan.”

Mr Cannon claimed that for every 1,000 mortgages written by Firstmac over the last 15 years, only one has ended in default, which he said was less than half the rate of the major banks, adding that four loans out of 1,000 are in arrears, which he said was also half the bank average.


The managing director also referred to Standard & Poor’s “strong” rating for loan servicing.

Mr Cannon’s remarks follow comments from the CEO of Bank of Queensland, Jon Sutton, who questioned the compliance practices of non-bank lenders, claiming that it is unclear whether such credit providers are fully complying with regulatory standards.

“There is a lot of pent-up demand heading towards non-bank lenders. They have a role to play in the financial community,” Mr Sutton said.

“The last thing you want to see is large parts of the community unbanked. 

“[Whether] they are subject to the same scrutiny, regulation and responsible lending, even though they do hold a credit licence, is an open question.”


However, in response to such claims, Mr Cannon accused some banks of “blaming their slow growth” on the credit practices of non-banks.  

Mr Cannon added that Firstmac has sought to increase its market share by improving its product and service offering.

The managing director made reference to the latest banking statistics from the Australian Prudential Regulation Authority (APRA), which reported 21.8 per cent growth for the Firstmac Group in the 2018 financial year, from $8.018 billion of loans under advice at 30 June 2017 to more than $10 billion at 30 June 2018 — a higher rate of growth than any other Australian bank.

“Better products, better service, agility and consumer trust are the key to expanding market share for non-banks as Firstmac has shown,” Mr Cannon said.

[Related: Bank CEO calls for ‘clarity’ over expense validation]

Non-banks are not bottom feeders: Firstmac

If you have ever considered how you could better service your SME clients but lack the knowledge or confidence to do this beyond referring them on, this is a must-attend event for you. Don't miss SME Broker Bootcamp, a jam-packed, free-to-attend, practical workshop. Register today and secure your place at this interactive, flexible, must-attend event.

Charbel Kadib

Charbel Kadib is the news editor on the mortgages titles at Momentum Media.

Before joining the team in 2017, Charbel completed internships with public relations agency Fifty Acres, and the Department of Communications and the Arts.

You can email Charbel on: This email address is being protected from spambots. You need JavaScript enabled to view it.

Latest News

An industry poll has been launched to understand the key issues impacting mortgage and finance industry professionals leading up to the 2022...

The mutual bank has confirmed that it has reached a milestone figure of $10 billion in assets. ...

The financial complaints body has recruited a new leader for its compliance and monitoring team. ...

Join Australia's most informed brokers

Do you know which lenders are providing brokers and their customers with the best service?

Use this monthly data to make informed decisions about which lenders to use. Simply contribute to the survey and we'll send you the results directly to your inbox - completely free!

Do you think APRA's bank buffer changes will see more borrowers use non-banks?

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.