One of Australia’s largest non-bank lenders has been put on the market, with reports suggesting the company could be worth up to $500 million.
Mortgage Business can confirm that Queensland-based Firstmac has been put up for sale.
The confirmation comes after The Australian Financial Review’s StreetTalk page this morning reported that Goldman Sachs has been hired to find a strategic investor or buyer for the group.
The group has been vocal in the past about its desire to transition towards a banking model.
Owner and managing director Kim Cannon’s submission to the Financial System Inquiry (FSI) called for the removal of ownership restrictions preventing the non-bank from applying for an ADI licence.
“No other country in the world imposes this ownership restriction, which effectively acts as a barrier to entry for groups such as Firstmac wishing to transition,” Mr Cannon said in his 2014 submission.
“The banking act, and its shareholder limitations, is stifling much-needed competition in the banking sector,” he said.
“It is the entrepreneurs that drive innovation and reduce consumer costs in the marketplace through the introduction of technological advances that drive down cost of delivery, improve service and provide greater choice for consumers.”
Mr Cannon also noted that access to capital was critical for the survival of the non-bank sector.
“Without access to capital, the number of ADIs will continue to decline as a result of the need to consolidate to survive,” he said.
Firstmac has issued more than $14 billion in mortgage bonds since 2013. In May, S&P assigned a AAA credit rating for three classes of Firstmac’s prime residential mortgage-backed securities (RMBS).
In 2011 the group launched the High Livez RMBS fund, which has achieved a total return of 6.77 per cent per annum since its inception and a distribution return of 6.09 per cent.
In recent years Mr Cannon has focused on the group’s online lending business, Loans.com.au. It is understood that this business will also be included in the sale.
Loans.com.au was one of the first lenders to slash its home loan rates this month, despite the RBA leaving the official cash rate on hold.
More to come.