Macquarie Group (ASX: MQG) has seemingly spent the past few years in the wilderness, having been forced to re-evaluate and rejig its business model for a post-GFC world. It appears the diversified investment bank is re-emerging with renewed confidence and a plan to grab a greater share of the Australian home loan market.
Last week, with surprisingly little fanfare, Macquarie purchased 19.8% of Homeloans (ASX: HOM). Homeloans has a market capitalisation of $100 million and provides mortgage origination primarily through mortgage brokers. Interestingly, Macquarie purchased its stake from Challenger (ASX: CGF) who presumably has decided it was a non-core investment. Any ambitions Macquarie has to grasp control of Homeloans however, are going to depend on the National Australia Bank (ASX: NAB), who owns 17.8% of the company as well.
Macquarie's jockeying for position to snare more of the lucrative home loan market has also seen it recently do a deal with Mark Bouris and his listed venture Yellow Brick Road (ASX: YBR). Meanwhile Commonwealth Bank of Australia (ASX: CBA), which is the largest home lender in the Australian market with a 25% market share has recently purchased the remaining 67% of Aussie home loans that it didn't already own.
One this is for sure — the big 4 banks won't be giving up market share without a fight. However, with the home loan market estimated at $1.1 trillion and the 4 big banks controlling the lion's share of the market, there is certainly opportunity for smaller players to grab a larger slice of the pie.
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The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. Motley Fool contributor Tim McArthur does not own shares in any of the companies mentioned in this article.
