David Hyman says autonomy is vital to the digital mortgage company's success
Digital mortgage company Lendi says it will keep its brand name after merging with the Commonwealth Bank’s Aussie Home Loans.
CBA announced on Wednesday that it would retain 45% of the new entity created by the merger between Lendi and Aussie, according to a report by The Sydney Morning Herald. CBA said the deal would infuse innovation into Aussie, which has 210 locations and 970 brokers across the country.
The deal is worth about $900m, according to a report by The Australian. CBA will receive “deferred consideration” and a dividend of about $105m as part of the deal. Under the terms of the agreement, CBA will continue to provide funding for the Aussie Select home loan product.
Lendi manages about $7bn in home loans through its website, and has relationships with other lenders including Suncorp, Westpac, IAG and AMP. ANZ is also a major shareholder in the company. The merger will create a combined company with a loan book of about $77bn and about 1,200 brokers.
“We believe the combined business will have a stronger platform to offer enhanced digital capabilities for Aussie brokers and a superior experience for customers,” CBA chief executive Matt Comyn told The Australian.
Lendi chief executive David Hyman told the Herald that autonomy from lenders was vital to the company’s success.
“A big part of our customer proposition is about creating a platform that has choice. Ultimately to deliver on that, we need to ensure we can stay true to that word,” he said. “There’s a real strong buffer between the businesses, and while they’re a shareholder, they don’t control the company.”
Read more: Exclusive: Lendi CEO on merger
Hyman said he expected the mortgage market to see record growth over the next year.
“We’ve got rates to customers at 1.89%, which is crazy. Generally speaking, if you have a job and you can save a deposit you should buy a house,” he said. “The cheap money and stimulus are big drivers that feed into property transaction flows. We think there are a lot of tailwind volumes for next year.”
Hyman said that the deal with CBA would allow Lendi to invest in technology to speed up the approval process. He stressed that Lendi’s governance policy would prevent the big bank from pressuring the company to preferentially sell in-house products.
“We don’t put any bank or lender above the customer’s interests,” he told the Herald.
The deal still needs to gain approval from the Australian Competition and Consumer Commission. That approval is expected to be handed down by mid-2021.
