 NAB increases mortgage power
National Australia Bank is expected to purchase Challenger Financial Group, with an announcement due today. Challenger's mortgage business paused share trading yesterday and NAB is expected to buy the business for approximately $400 million.
The transaction will take the total of NAB's recent spending on acquisitions to just over $1.3 billion; it recently expanded into wealth management by buying life insurer Aviva Australia and broking firm JBWere.
This deal will further consolidate the home loan sector with other recent acquisitions within our local banking sector in recent years. Recently, Westpac acquired two smaller lenders - RAMS and St George Bank. While Commonwealth Bank bought a 33 per cent stake in Aussie Home Loans, which also owns Wizard, and CBA also bought BankWest.
NAB, keen to make some deeper movement in the mortgage market since the sale of Wizard to Commonwealth bank, would not comment last night.
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