Update: Yellow Brick Road (ASX:YBR) has just been placed in a trading halt, pending an announcement
From the SMH:
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.
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.
I welcome this, so long as we install macro-prudential rules and the new entity also provides business loans. If not, we’ll simply rerun the decline in mortgage credit standards that happened the last time a challenge like this emerged from non-banks, despite the exemplary supervisory efforts of the RBA and APRA.
