 CBA and Aussie buy Wizard
Wizard Home Loans has been sold to Aussie Home Loans, with the Commonwealth Bank of Australia taking on up to $4billion of mortgages.
In the deal the Commonwealth Bank, which owns a 33 per cent stake in Aussie Home Loans, will acquire $2 billion of loans at the end of February 2009 but the timing of the other $2 billion in loans has yet to be decided. The Wizard mortgage portfolio included "prime mortgages that meet the Commonwealth Bank's strict lending criteria and are 100 per cent mortgage insured, with a maximum loan to valuation ratio of 90 per cent," the bank said.
The purchase of the Wizard brand and distribution network for an undisclosed sum from Wizard parent company GE Money has surprised some who understood National Australia Bank were keen for the acquisition. Aussie Home Loans executive chairman John Symond said his company began to consider a deal when it heard that NAB had not finalised a deal, and approached GE Money.
Wizard once claimed to have the financial strength of one of the world's largest companies. GE Money bought Wizard in 2004 and GE Money will continue to earn an income stream from the loans it is retaining, local president and chief executive Mike Cutter said.
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