Macquarie strengthens distribution with YBR acquisitions

Macquarie Bank is bolstering its mortgage distribution through white-labelled Yellow Brick Road and Vow Financial home loans.

The Yellow Brick Road group, which has included Vow and Resi Mortgage Corporation since August 2014, reported $38.2 million of customer receipts for the three months to 31 December 2014.

That compares with $6.8 million the year before, when Vow and Resi were not part of the group.

In an ASX statement announcing the group’s quarterly results last week, YBR highlighted Vow’s continued growth under its ownership, with monthly volumes breaking the $1 billion mark for the first time in December.

“This is a 60 per cent improvement on the same period last year,” YBR said.

“The Vow home loan range was launched in the [December 2014] quarter and has seen strong settlements, with volumes doubling month-on-month throughout the quarter.”

Vow Financial chief executive Tim Brown said the aggregator’s new ownership, under YBR, has aided growth.

“They are very supportive of the strategy and the culture and they want to see that continue,” Mr Brown told Mortgage Business.

Macquarie is the funder behind YBR’s white-label home loans, which have recently been re-labelled as Vow Home Loans, Mr Brown explained.

“Obviously we see the benefits of selling some of their other products such as the white-labelled product that is now called Vow Home Loans which we are starting to sell,” he said.

YBR’s strategy is to build size and scale through subsidiary brands such as Vow and Resi.

“We are using that scale and size to get better pricing on products, which is what we have achieved through our relationship with Macquarie,” Mr Brown said, adding that Macquarie has also partnered with the YBR group to distribute wealth products.

“All those things over time will give our brokers better products that they can sell to their clients,” he said.

Mr Brown pointed to Aussie’s acquisition of nMB as a similar example of a branded group looking to build scale.

“I have no doubt others will try and replicate that success,” he said.

However, Vow’s relationship with YBR goes both ways, Mr Brown explained.

“Commercial and leasing is an area where YBR wants to grow and we are already growing that quite considerably,” he said.

“The wealth component is something they bring to the table and they do extremely well, so we are looking to use their expertise and their knowledge there.”

In September last year, Vow announced the appointment of financial planning veteran Michael Clifford as its new head of wealth management.

“He is now working with a number of our brokers to help set up financial planning in their businesses,” Mr Brown said.

 

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