Powered by MOMENTUM MEDIA
subscribe to our newsletter

Major bank shuns SMSF loans

One of Australia’s big four banks has backed the Financial System Inquiry’s recommendation to ban SMSF lending, after committing to not include SMSF loans in its mortgage strategy.

In its response to the FSI’s final report, ANZ stated it agrees with the recommendation to remove the exception to the general prohibition on direct borrowing for LRBAs made by superannuation funds.

“ANZ has not pursued this activity as part of its mortgages strategy. ANZ believes that leverage should be limited in superannuation portfolios and we agree with the RBA and APRA that it is incompatible with the objectives of superannuation,” the submission stated.

Reactions to the FSI’s recommendation to ban borrowing in super have been mixed since the final report was released in December last year.

Recently, the Association of Superannuation Funds of Australia expressed a similar position to ANZ's, believing that in a majority of cases, leverage is inconsistent with the objectives of superannuation.

Advertisement
Advertisement

However, in its submission to the FSI’s final report, the SMSF Association urged the government to consider a range of alternatives to a ban on LRBAs, including limiting the use of personal guarantees and bringing LRBAs under the AFSL regime.

In its submission, ANZ also showed support for the FSI’s recommendation to seek broad bipartisan support for and enshrine in legislation the objectives of the superannuation system.

However, ANZ stressed that while this goal is “desirable”, it is likely to require a broader public discussion on superannuation and current issues.

“The extent to which Australians will have sufficient income to meet their retirement expectations is an important issue. Issues such as this need to be canvassed throughout the community,” ANZ stated.

 

PROMOTED CONTENT


Major bank shuns SMSF loans
mortgagebusiness

Latest News

Citi is to exit its consumer business, including mortgages, loans, retail banking and credit card operations, in Australia and 12 other ...

The major bank’s CEO has reiterated that responsible lending changes could simplify the lender’s processes and improve mortgage approv...

The non-major has reported growth in housing lending as well as a rise in home loan settlements via the broker channel. ...

FROM THE WEB

Join a group of highly informed brokers.

Broker Pulse, a community-driven knowledge base of lender performance Reveal exactly which lenders are making life easiest for brokers and their clients by taking this monthly survey and joining a group of highly informed brokers who leverage these insights every month.

JOIN NOW
podcast

LATEST PODCAST: Tackling the home deposit challenge

Do you expect to see strong uptake of the HomeBuilder scheme?

Website Notifications

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