Treasurer approves bank-aggregator merger

The Australian Prudential Regulation Authority (APRA) has informed West Australia-based lender Goldfields Money Limited that Treasurer Josh Frydenberg has approved its merger with NSW-based mortgage aggregator Finsure.

As part of the Finsure transaction, over 40.7 million Goldfields Money shares will be issued to Finsure’s shareholders.

Further, one of the conditions of the merger being that Goldfields Money ensures that the merged entity will have sufficient regulatory capital, the bank secured $20 million in commitments from a consortium of local and international investors through the issue of more than 15.3 million fully paid ordinary shares at $1.30 a share, which will now be issued to local and international investors.

Following the announcement, Goldfields Money CEO Simon Lyons said: “We welcome new Goldfields Money shareholders to our register and look forward to growing the business for the benefit of new and existing shareholders alike.”

The transaction process commenced after Goldfields confirmed that a majority of its shareholders approved the merger.

Both parties have previously highlighted the benefits of the merger, with Finsure’s managing director, John Kolenda, claiming that it would provide “enormous” benefits to the aggregator’s broker network, such as “boosting” the network’s service proposition by allowing them to offer “better home loan products and rates”.

Goldfields Money has also previously stated that it expects to benefit from the aggregator’s presence in the east-coast markets of the nation, noting that its loan book predominantly comprises loans from the west coast of Australia.

Lower funding costs through Finsure’s distribution channels for deposit products was also outlined as an expected benefit of the merger.

Joining the aggregator’s lender panel would also provide Goldfields Money with access to increased loan volumes, it said, further noting that the aggregator settles approximately $1 billion (or about 2,500) in new loans per month, which is “well in excess of those written by [the bank] historically”. As of 30 June 2018, the size of the aggregator’s loan book was reportedly $33.2 billion.

Goldfields Money is also predicting that it will benefit from partly funding Finsure’s wholesale and white label products, such as MyLoan, noting that the aggregator has written $32 million in wholesale products per month in the year ending on 30 June 2018.

Non-bank lender Firstmac had previously sought to acquire the bank; however, after failing to secure the deal, the non-bank turned its attention to Queensland-based lender Maleny Credit Union (MCU).

However, Firstmac has noted that the proposal needs the support of MCU’s membership, with the agreement to be put to a vote later this year.

The non-bank also stated that it would require FSSA (Financial Services Shareholdings Act) approval from federal Treasurer Josh Frydenberg before proceeding with the acquisition.

Maleny Credit Union has expressed public support for the acquisition, claiming that it would “enable the significant value built up in MCU over its proud 34-year history to be realised for members and the community”, adding that it is “in a position to achieve what the board believes is an excellent outcome and a superior offer for members and the community”.

[Related: Shareholders greenlight bank-aggregator merger]