Challenger Takes Slice Of Mortgage Business
Illawarra Mercury
Tuesday September 2, 2003
THE Kerry Packer-backed Challenger Financial Services Group has beefed up its mortgage financing business by taking control of Interstar Securities in a $187 million deal.
Challenger acquired Interstar from Zurich Capital Markets, which is exiting Australia, for $85 million.
It also has forked out $48 million for Zurich's Australian high-yield fixed interest and loan portfolio plus another $54 million for 84,500ha of forestry assets.
Interstar is one of Australia's largest independent non-bank wholesale mortgage financiers with an $11 billion mortgage portfolio, which has grown by an average of 53 per cent in the past three years.
Challenger chairman James Packer said Interstar would play a major role in building Challenger's mortgage-related business. ``Interstar is viewed as a long-term investment and fundamental to building shareholder wealth for Challenger's investors," he said.
Challenger chief executive Chris Cuffe said Interstar would bring strong earnings growth prospects and synergies for Challenger, which he added, was still keen to make other similar acquisitions and alliances.
He also noted that mortgage brokers in Australia were now originating about 30 per cent of all home loans, with the figure expected to grow to be between 40 and 50 per cent in the next three years.
``There's very significant growth in this part of the industry," Mr Cuffe told analysts.
Challenger intends to keep Instar's 160 staff once the deal is completed at the end of the month.
© 2003 Illawarra Mercury
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