Forget big deals such as the A$200 million (US$148 million) Eurobond issue from National Australia Bank (NAB) or the syndicated loan for Telstra Corporation worth A$3 billion, the truly ground-breaking Australian deal of the past 12 months was an issue arranged by JP Morgan worth only A$30 million. This is the deal that has allowed a new generation of mortgage providers to challenge the near monopoly of Australian banks in the home loan mortgage market. The consequence may be one of the most dramatic upheavals yet seen in Australian retail banking.
Years ago the main non-bank mortgage providers were building societies, which lent at rates usually a few points above bank loans. The most successful building societies eventually turned into banks and much of the differentiation between loan products disappeared.
Over the past few years new mortgage providers have emerged with a fresh marketing edge: they...
