(Reuters) -Australian non-bank lender Pepper Money said on Thursday it is part of a consortium that is negotiating with major financial institution Westpac over acquiring the latter’s mortgage broking portfolio. Westpac shut down RAMS to new home loans in 2024, while continuing to retain the ongoing loans. The closure prompted RAMS franchisees to file a class […]
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Australia’s Pepper Money in talks to buy Westpac’s mortgage broking portfolio
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(Reuters) -Australian non-bank lender Pepper Money said on Thursday it is part of a consortium that is negotiating with major financial institution Westpac over acquiring the latter’s mortgage broking portfolio.
Westpac shut down RAMS to new home loans in 2024, while continuing to retain the ongoing loans. The closure prompted RAMS franchisees to file a class action lawsuit against Westpac, claiming it improperly terminated viable businesses and was ultimately responsible for the loan processing errors.
The talks are preliminary and do not carry any certainty that an agreement will be reached, Pepper Money said.
The company is currently valued at A$961.61 million and the news comes on the heels of a report by the Australian Financial Review saying that Pepper Money had secured exclusivity over the portfolio.
Australia’s corporate regulator had in June said RAMS Financial Group, a Westpac subsidiary, had used failed payslips from non-existent employees to approve home loans. The Federal Court later imposed a A$20 million ($13.00 million) penalty.
Australia’s credit sector has been under intense scrutiny since a 2019 Royal Commission report revealed widespread governance issues and misconduct in the banking, superannuation and financial services industry.
Pepper Money declined to comment on any details regarding the consortium, while Westpac did not immediately respond to a Reuters request for comment on the valuation of the unit’s portfolio.
($1 = 1.5389 Australian dollars)
(Reporting by Rishav Chatterjee in Bengaluru; Editing by Alan Barona)