Firstmac sells stake in regional bank

According to ASX trading updates, Firstmac has sold more than $775,000 worth of Goldfields Money shares since the beginning of June, reducing its voting power from 13.02 per cent to 10.77 per cent.

Goldfields, which is now able to officially call itself a bank thanks to reforms of the Banking Act, rejected a takeover bid from Firstmac in October 2017. A month later, the little-known Kalgoorlie-based ADI surprised the market by partnering up with mortgage aggregator Finsure.

A Goldfields trading update from 4 June reveals that the aggregator has more than doubled its broker numbers and grown its book size by more than $20 billion in five years.

The group was established in 2011 and acquired LoanKit from Mortgage Choice in 2013. In the 2014 financial year, Finsure’s loan book was valued at $7.4 billion and the company had a total of 631 loan writers.

A year later, Finsure’s book had almost doubled in value to $13.6 billion and 742 brokers were aggregating under the group, which was co-founded by industry veterans John Kolenda and Calvin Ng.

By 31 March 2018, Finsure’s loan book was worth $31.8 billion. The group currently has over 1,400 loan writers.

In May, Goldfields launched its new cloud-based banking platform. Chief executive Simon Lyons said that the announcement was “an important and exciting milestone” for the bank, which also launched a new mobile banking app.

“With an increasing volume of business moving online, we are well positioned to offer our customers a leading-edge banking experience. The ability to open deposit accounts in minutes and to accept loan applications 24/7 is a major step forward for our business,” Mr Lyons said.

Now the bank is focused on sealing the deal with Finsure. On 1 June 2018, FSSA approval was received from the federal treasurer in satisfaction of another condition of the merger.

“The approval is subject to the company raising at least $20 million in common equity Tier 1 capital, of which ~$4.7 million was raised in April 2018 from international and local institutional investors, and sophisticated investors by way of a placement of new fully paid ordinary shares,” Goldfields said in a statement.

“The company expects to raise at least ~$15.3 million in additional capital as part of the Finsure transaction to ensure that the merged group maintains sufficient regulatory capital requirements and to fund additional lending growth.”

The merger with Finsure is now subject to a number of conditions, including obtaining all necessary Goldfields Money shareholder approvals, an ASX and ASIC review of the Explanatory Memorandum, the ASX approval of the quotation of Goldfields Money shares issued as consideration and no Goldfields Money or Finsure material adverse effect or “prescribed event”.

Corporate advisory firm Aura Group, of which Finsure co-founder John Kolenda is chairman, has been one of the largest equity holders in Goldfields as far back as 18 August 2017 through its “special opportunities” funds.