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As you can read in Sal’s report below, May was a good month for nMB brokers. With the end of the financial year coupled with earlier expectations of the FHOG Boost running out in June, we have seen a healthy level of business activity throughout the June quarter.
Within nMB, the major banks are writing nearly 80% of new lending, and over 90% when you include lending through the suppliers owned by the majors. This scenario is common across all brokers groups, but with a number of lenders now introducing steps to slow their lending volumes and the number of brokers they receive business from, this may start to change.
At a broker level, it is important to “share the love” across as many suppliers as possible. It is too easy to deal with predominantly one lender out of habit. At some point this approach could come back and bite.
Pleasingly, in relation to commission levels paid by the major banks to brokers, a report issued by Merrill Lynch in July states “…… with management at all the banks suggesting that further broker commission cuts are no longer on the agenda”. This is a view I’ve held for some time and feel that any next move will be an increase. Before that though, I do expect a few lenders to improve some of the overly complicated matrices they use to determine current commission levels.
With all the talk about the dominance of the major banks, it was interesting to read recently press about the creation of a “people’s bank”. The fact this thought was put forward by a group of seriously credentialed economists means it will get some hearing in Canberra. Although the likelihood of this actually eventuating is small, it does go to show the level of unease about the power being held by too few! Historically when this occurs over a reasonable period of time a player emerges to capitalise on the mood or the laziness a “closed” market no doubt brings.
The licensing picture hasn’t become much clearer in the past month. The full level of detail required by brokers to properly determine the impact and procedural changes to comply with this new regime is still to be seen. More detail may be revealed following the Senate sub-committee reporting back on 7th August. At this stage, all brokers will be required to register with ASIC between 1 November and 31 December 2009, with a view to applying for a licence after 1 January 2010, if an individual licence is required.
On the economic front, the threat of increased unemployment seems to be easing with the respected Access Economics reducing its forecast for peak unemployment from 8.5% to 7.5%. Australia has fared far better than most global economies and with the Reserve Bank holding the Cash Rate at 3% in July there is still some room to move rates at a later stage if it is felt further stimulus is needed.
Gerald Foley - Managing Director
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nMB Performance Loans submitted by nMB brokers in May ’09 reached $220m. This represents a YoY increase of $35m or 20% when compared to the same period for ‘08. This is a strong result considering the current macro economic conditions.
Sales volume is a key performance measure, distribution of sales is equally important. In May ’09 CBA was our number one lender with a share of 34%. Westpac was second with a share of 24% and BankWest made the top three with a share of 10%. For the same month last year CBA was our number one lender with 22%, Westpac was number three with 14% and BankWest was number five with 10%. Please see table featuring our top 5 lenders for May ‘09 and their rankings for May ‘08.....
During the ‘09 financial year, we have seen a significant shift in the distribution of nMB sales, representative of the supply-side challenges faced by our industry. Next month’s edition of nMB Intell will cover the total annual activity.
nMB Sales Meetings
The July Sales Meetings featured two of our lenders, Westpac and RAMS. Both discussed recent policy changes, turn around times and the features and benefits of their respective product range. RAMS also covered their new online pre-approval process. We thank Westpac for their continued support of the nMB Events Program.
nMB’s content focused on the recent enhancements to the Broker Toolkit section of the nMB Mortgage Broker Suite. The Sales Development page includes updates to the Affiliate Marketing documents, a number of new direct marketing letters, address-label templates and information relating to the PowerPort newsletter service. The affiliate documents and all of the direct marketing letters can also be accessed directly from the CRM.
The Compliance page has also been updated to include reference materials relating to finance broker contracts, advertising guidelines, comparison rates, PI insurance, professional development activities and a document that highlights the current regulation of credit providers and mortgage brokers in all states and territories.
If you were unable to attend the sales meetings and wish to learn more, please contact your nMB BDM. August sales meetings will feature two of our events sponsors…..Adelaide Bank and BankWest.
Also during August, La Trobe Financial is hosting a focus group for nMB brokers. The session will be facilitated by La Trobe’s Executive Head of Funding – Paul Wells, Executive Head of Sales – Kevin Arkell, and BDM Investments – Jarrod Mizzi. The centerpiece will be La Trobe’s Mortgage Fund and associated benefits to clients and brokers. Full details to be announced shortly.
Sal Cinque - Director, Sales and Marketing
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Veda Advantage
Location: Mortgage Broker Suite > Broker toolkit > Business Management
Do you know that nMB recently joined Veda Advantage? This service allows brokers to complete a client credit check before submitting an application, giving you the opportunity to address any credit defaults or irregularities prior to the lender.
The service is available to all nMB brokers under a “sub” subscription, which means nMB has paid the initial and annual fees leaving brokers who wish to participate, only the cost of the actual credit checks themselves, which are generally under $10.00.
By subscribing to the service you also have access to land title searches, company searches, Veri Check Individuals and Organisations and Motor Vehicle REVS enquiry.
Due to the Privacy Act, it is imperative the Customer Authority Template is completed and signed prior to accessing the credit information. There are heavy penalties for misusing Veda Advantage.
Please note that accessing Veda Advantage leaves a footprint on the client’s file and excessive enquiries on the CRAA may impact on your client’s credit rating with lenders.
Registration forms and more information on this service can be found in Mortgage Broker Suite.
Sarah Zecevic - Lending Services Manager
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MBS profile - The Balance Sheet Analyser
Location: Mortgage Broker Suite > Loan tools > Analysis Suite
The Balance Sheet Analyser is one of the more complex tools in the loan tools section of Mortgage Broker Suite. Its primary use is to analyse the balance sheet and trading results of a trading company over a period of up to five years by reporting back a number of key ratios. These ratios are then compared to industry benchmarks to determine the company’s performance.
The ratios are segmented into the following categories:
• Liquidity
• Profitability
• Efficiency
• Gearing
• Debt Service
• Debt Structure
The benefit of including a Balance Sheet Analyser report with your commercial submission is that the credit assessor can immediately review how the business is travelling. With many commercial lenders, this type of analysis would be undertaken at some stage. By providing this information at the submission level, you should be able to fast track one of the processes or, at the very least, provide quality information which will hopefully result in a favourable decision.
The Balance Sheet Analyser is a tool that generally goes beyond lender expectation’s for a commercial submission. In stating this though, it could very well be the edge you are looking for to get that commercial submission over the line.
I encourage you to try it out using your company figures over the last 3 years or so. I’m sure you will find the results both interesting and, in some instances surprising.
By the way, we have included comment tags alongside each of the 15 ratios which explain what they mean. Enjoy!
Kon Avramidis - Director, Operations
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Bruce Mawson - nMB Business Development Manager, QLD
1. My all time favourite food is:
Tim Tams. They’re an introduction, an apology, a seduction, a reward, a luxury, a respite.
2. The last book I read was:
Winning by Jack Welch. I tend to read more biographies than fiction
3. Lately I’ve been listening to a lot of:
PiNK and of course some nostalgic Michael Jackson.
4. My favourite saying is:
“If you don’t try very hard, winning isn’t very exciting, and defeat doesn’t hurt very much”
5. My Ideal Sunday involves:
Bacon & eggs, coffee, Sunday papers, watching my son play Rugby and then catch the a bottle of wine while I watch the Sunday NRL action
6. My biggest inspiration is:
Probably my Dad who was so confident ineverything he tackled.
7. If I didn’t live in Australia I would live in:
In the US. I have always imagined that would be the other place to live.
8. One thing most people wouldn't know about me is:
I cannot stand going fishing, I’d rather chase a ball in any sporting code.
9. If I could have dinner with anyone (dead or alive) I would choose:
Barack Obama, Wally Lewis, Muhammad Ali, Elle McPherson and my wife Judy.
10. Three things I would love to do in my lifetime are:
• Captain the Wallabies in a Bledsoe Cup
winning game.
• Holiday at Santorini, Greece.
• Race at Bathurst.
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nMB July Sales Meetings
Please make note of the relevant nMB August Sales Meeting date in your diary:
Brisbane Tuesday 4th August
ACT Tuesday 4th August
Sydney Wednesday 5th August
Melbourne Friday 7th August
Gippsland Thursday 13th August
Please RSVP your attendance to your state BDM.
