JavaScript disabled. Please enable JavaScript to use My News, My Clippings, My Comments and user settings.

If you have trouble accessing our login form below, you can go to our login page.

If you have trouble accessing our login form below, you can go to our login page.

Rumours fly of fifth pillar to emerge in bank sector

Date

Mark Hawthorne

A fifth pillar? ... Australia's big four banks could soon have a new rival. Illustration: Karl Hilzinger

A fifth pillar? ... Australia's big four banks could soon have a new rival. Illustration: Karl Hilzinger

AUSTRALIA could soon have a powerful new player in the world of retail banking, with Macquarie Group believed to be in talks with Mark Bouris' listed Yellow Brick Road Group over a distribution deal that could be unveiled as early as this week.

The deal would give Yellow Brick Road access to the billions of dollars sitting on Macquarie's balance sheet to provide home loans via Mr Bouris' network of more than 140 branches across the country.

Shares of Yellow Brick Road were put into a trading halt this morning. The company said it was aware of media speculation of a "potential distribution deal with a major Australian financial institution" and that it expects to make an announcement on this issue before the start of trading on Friday.

News of the proposed tie-up circulated the Birdcage at Flemington on Tuesday, where racing tips and interest rate chatter usually dominate. The key rumour was that Australia's big four banks could soon have a fifth rival knocking on their door.

Well-placed sources revealed that Macquarie would return to the residential home loan business, and in a big way.

As an opening salvo, BusinessDay believes Yellow Brick Road and Macquarie plan to undercut the big four banks by more than a full percentage point on all new home loans.

''This could provide the fifth pillar that our banking sector has always needed,'' said a source close to the deal.

The deal marks a major strategic shift for Macquarie, which has seen many parts of its traditional investment banking model suffer in recent years. Last month Macquarie announced a $361 million profit for the six months to December. Of that Macquarie Capital, which houses the bank's once mighty mergers and acquisitions team, contributed just $10 million.

The bank's equities trading division, Macquarie Securities, notched a $64 million loss. Daily equity volumes for Macquarie were down 23.5 per cent on the previous year.

Announcing the results, Macquarie chief executive Nicholas Moore noted that ''structural change'' was affecting the group's performance.

''There's plainly a degree of structural change taking place in the industry, also structural change in terms of the amount of capacity in the industry,'' Mr Moore said.

The distribution deal with Yellow Brick Road is not Macquarie's first move into the world of retail banking.

In the heady days of 2000, when Macquarie had built a reputation as the ''millionaires factory'', the bank established a retail arm.

Peter Maher was poached from Westpac, where he was group marketing manager, to run the operation. In total $80 million was invested in computer equipment, and more than $5 million was spent on an advertising campaign to attract retail customers.

One memorable ad featured a picture of a woman in front of the words: ''I used to want to marry a millionaire. Now I want to become one.''

Mr Maher remains head of banking and financial services at Macquarie.

Mark Bouris was unavailable for comment.

124 comments

  • great,now they will even underwrite my airport parking mortgage.

    Commenter
    snp
    Location
    skytrain to airport
    Date and time
    November 07, 2012, 7:15AM
    • Most funny and sadly very true comment I've seen in a long time!!!

      Commenter
      Art
      Date and time
      November 07, 2012, 7:34AM
    • "LOVE"

      Commenter
      Bajillionaires Factory
      Location
      Unlimited
      Date and time
      November 07, 2012, 7:45AM
    • two thumbs up for that comment.

      let's face it banking in Australia is the modern version of being held up ransom on some forest road.

      Commenter
      steve
      Location
      sydney
      Date and time
      November 07, 2012, 8:02AM
    • Wow! A fifth Pilloch no doubt. The nore Pilloch's the merrier>

      Commenter
      5kwidkid
      Location
      Sydney
      Date and time
      November 07, 2012, 8:03AM
    • They should call the fifth BANK POUND OF FLESH after shylock in Merchant of Venice, befitting methinks, nothing is for free in this world. But they make sure they get theire pound of flesh.

      Commenter
      Pickled Herring
      Location
      Frankston
      Date and time
      November 07, 2012, 8:27AM
    • +1

      Commenter
      philv
      Location
      syd
      Date and time
      November 07, 2012, 8:53AM
    • I got excited after the headline.....then found out it's Macquarie. Just another rip off merchant.

      Commenter
      Bazza
      Date and time
      November 07, 2012, 9:04AM
    • +1

      Commenter
      Cut the BS
      Date and time
      November 07, 2012, 9:51AM
    • Isn't this all just another cheap trick to reinflate the housing bubble?

      Commenter
      Foxy Trollwolf
      Location
      Australian Property Forum
      Date and time
      November 07, 2012, 10:17AM

More comments

Comments are now closed
Featured advertisers

Special offers

Credit card, savings and loan rates by Mozo

Executive Style