Japanese banks prepare to launch a surprise attack on Australian Mortgage Profit margins
Australia's big four banks, CBA, NAB, Westpac and ANZ are the envy of the banking world.
Yet Japanese banks have been in operating successfully in a recession economy for twenty years.Then something happened. A big Japanese builder bought out Iconic Australian project home builder AV Jennings, and the secret profits got back to Japan.
The interest rates they operate on are puny compared to Australian Home loan rates and bank margins. So its natural that they want a piece of the action.
Some say that Japanese banks could get a $100 billion of the Australian home loan market in double quick time.
At the February RBA meeting most financial analysts are punting on a further rate cut to the official cash rate. That normally translates to a similar reduction in mortgage interest rates.However some of the big four banks are hinting at not passing on all of the rate difference, citing rising fundings costs as the reason.
A cynic might suggest that the real reason is maintaining profit levels in a shrinking home loan & credit card finance by Australians.
Japanese banks are all cashed up with nowhere else to go.
Japanese lenders are brimming with low cost cash because of the recession, and the Japanese savings ethic.
Australia's trillion dollar mortgage pie
Australia's trillion dollar home loan market looks ripe for the picking and snaring just a 10% slice of Australia's Mortgage pie. That would give them a $100 billion dollar windfall.
A Japanese Bank raid a cakewalk for four good reasons
- Australians have no loyalty to their banks. They will change lenders, and do so often.
- Money talks. Australian home buyers and homeowners are hurting financially mainly because they paid too much for property on the basis of low interest rates.
- An open Mortgage Broker channel. Single unit and franchise mortgage brokers have established channels that the Japanese raiders can tap into instantly.
- They could also operate an online channel, as this is how a lot of Australians looking to refinance do their research these days.
2012 may prove to be a tough year for mortgage lenders in Australia, and that means a better deal for Aussie home loan borrowers.
That has to be good news for anyone where home affordability is important, including the real estate industry, the home building sector, land developers, mortgage brokers, as well as homeowners and home buyers looking for a better mortgage deal.
So will Japanese banks succeed in turning Australian home loan Japanese? yes I think so!
