NAB acquires Challenger mortgage business
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The National Australia Bank has moved to acquire Challenger’s mortgage management business for $385 million.
At the same time, Challenger said the residual income streams from all term funded mortgages had been sold to Challenger Life Company Limited for $575 million and that the net result of both transactions was that it paid down debt facilities and significantly improved its cash position.
Challenger said it would now be focusing purely on the significant opportunities that existed within the investment management activities of its life and funds management businesses.
NAB confirmed the transaction to the Australian Securities Exchange today, saying the purchase included the PLAN, Choice and FAST mortgage aggregator business and Challenger’s multi-brand ‘white label’ capability.
It said in addition, a select portfolio of approximately $4 billion of residential mortgages would be acquired at a discount to face value for loan loss provisions.
NAB chief executive Cameron Clyne said the acquisition provided additional distribution and capability in Australian mortgages.
NAB Personal Banking group executive Lisa Grey said the acquisition of the Challenger business would increase the bank’s presence in the important broker distribution segment.
She said the existing management team would be retained and continue to run the business as a separate entity reporting to NAB Broker within NAB Personal Banking.
AUTHOR
Mike Taylor
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