Fri, 30 Jul 2004
Australia’s largest mortgage broker, AFG, has strengthened its institutional shareholder base with TOWER and Allianz each acquiring a 5 per cent shareholding. TOWER and Allianz join Macquarie Bank Limited with a 10% shareholding acquired in 2001, as cornerstone investors in AFG.
TOWER, Allianz and AFG have also entered into an alliance agreement in respect of providing life and general insurance products to AFG members and customer.
AFG Managing Director, Mr. Brett McKeon said: This is an exciting new alliance that will give AFG members a major strategic advantage through the opportunity to offer customers a broader range of financial service products and diversify income streams.
Executive Director of AFG Mr Malcolm Watkins said: We have recently completed a $6 million investment in our IT platform, which has provided our members with the industry’s leading platform to meet best practice standards and FSR compliance requirements.
We have a high growth strategy in place for FY 2005, with a range of new products and services planned. Progressively throughout the year, we will introduce life and general insurance and wealth management services to complement our existing residential and commercial mortgage offering which already includes three new electronic finance products (personal loans, hire purchase and leasing, and debtor finance products).
We recognise that future growth will be driven by a need for our members to deliver more to customers than just mortgage products, and this strategy is the first major step by any mortgage broker to significantly broaden the range of products and services offered to customers.
Through our technology platforms we offer our members a fully FSR compliant process for completing the sale of mortgage and insurance products and lowering the administration required by members and customers.
The biggest winner is the consumer, who will get high quality, advice from AFG members who will possess the necessary levels of training and compliance, something the industry must embrace, Mr. Watkins said.
Mr Minto, the Chief Executive of TOWER Australia Limited said TOWER saw the investment in AFG as a long-term strategic opportunity to offer mortgage protection products alongside residential and commercial mortgage offerings. International trends and the Australian bank experience to date show that consumers are looking for financial security at the time they take out their mortgage.
“Over time, we see the alliance with AFG adding to our existing distribution channels and putting us in markets where we are presently not strongly represented, he said.
“This is an exciting opportunity and we look forward to working with AFG and Allianz in developing and delivering products for the benefit of all parties.
AFG is positioned for its next phase of growth either organically or via acquisition, and further strengthens the group’s position as Australia’s leading mortgage broker. It is also well positioned for a possible listing on the Australian Stock Exchange.
Background:
AFG, as Australia’s largest mortgage broker, has more than 2,500 members (independent mortgage brokers, financial planners, accountants and real estate agents) writing over $18 billion of mortgages per annum.
The group has a lending panel of 45 banks and financial institutions offering over 700 residential and commercial mortgages and other financial products to customers throughout Australia. In FY 2004, the group processed over 72,000 mortgages for its customers.
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