Superbank was established as joint venture between Australian bank St George and Foodstuffs New Zealand with the aim of selling home loans and deposits through Progressive’s supermarket chains.
However the bulk of Superbank’s 2200 customers came through brokers.
“I think (supermarket distribution) didn’t work for them,” GE Money managing director Jim Cock says. However, he didn’t discount the model; just that it didn’t work in this case.
“I’m not offering any ideas why.”
Superbank says since its launch in February 2003, market conditions have changed and margins in mainstream residential lending in New Zealand have become extremely competitive.
“Given these factors, both companies had reviewed their strategic positions and examined a range of opportunities for Superbank.” In the end St.George and Foodstuffs decided to sell the mortgage portfolio.
GE Money is growing to be a significant player in New Zealand. Its total book is worth $4.4 billion, of that $2.8 billion is in mortgages. This is made up of Superbank, Wizard Home Loans and its own lo-doc lending.
Cock says GE Money will continue to run two home loan brands (its own and Wizard) and this deal will push it further into the prime and broker space.
“We were shaping up to do more broker business and this gives us a bit of a turbo boost,” he says.
Cock describes the Superbank deal as a “consolidating acquisition”. He says GE Money is keen to grow and this is a deal it managed to pull off.
