Largest Australian Reverse Mortgage Lender to Sell

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InvestorDaily is reporting that Royal Bank of Scotland (RBS) Australia is in discussions to sell its reverse mortgages business.

According to ID, its parent company conducted a strategic review earlier this year and decided now was the time to sell all non-core retail businesses outside of the United Kingdom (UK).

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“We’ve got a sales process that is drawing to a conclusion,” RBS Australia director of reverse mortgages Martin Lynch said. “We have short-listed three parties now and hope to announce a decision in a month,” he said.

Lynch said that when ABN AMRO originally launched the reverse mortgage business in 2005 it was built with the view to build scale and then sell it. The company has been able to build RBS into the largest reverse mortgage provider in Australia and the only one who caters to financial planners and brokers.

RBS inherited the reverse mortgages business when RBS Group bought Dutch bank ABN AMRO as part of a consortium in 2007.

An RBS Australia spokesperson said no other parts of RBS Australia would be sold as a result of the strategic review.

RBS to sell reverse mortgages business

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  • This is more than catering to financial planners and brokers since this is the only company to “use intermediaries, including financial planners and brokers.” The interesting thing was to read that they are closed to new business.

    I doubt if this article would be considered a ringing endorsement of the reverse mortgage business in Australia. Unless there is a requirement that during sales negotiations parent corporations have to stop new business activies, there appears to be more to this sale than that the business grew to the place where they planned to sell it.

  • RBS is under significant strain since the financial crisis in 2008, so this is likely driven more by parent company issues than anything specific to reverse mortgage business in AZ.

    • John,

      You could be right but normally one does not discard or stop taking new business if one has a successful subsidiary. Usually to become stronger, an enterprise sells off its weaker units to provide more financial strength to its best endeavors. The real indicator is stopping any new business. That is troubling and a good “insight” into what is going on inside the enterprise.

  • John,rnrnYou could be right but normally one does not discard or stop taking new business if one has a successful subsidiary. Usually to become stronger, an enterprise sells off its weaker units to provide more financial strength to its best endeavors. The real indicator is stopping any new business. That is troubling and a good “insight” into what is going on inside the enterprise.rn

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