REA taking on role in home financing
REA Group has made its move into home financing, buying a majority stake in mortgage broker Smartline and extending a partnership with National Australia Bank.
The online property advertising specialist has revealed it will buy an 80.3 per cent slice of Smartline – which has 300 advisers and a $25 billion loan book – for $67 million.
REA said the remaining 19.7 per cent shareholding would be kept by the existing Smartline management team but could be up for grabs in the future.
The owner of the popular realestate.com.au property portal also announced it had teamed up with NAB to offer consumers access to the lender’s broking service.
It will launch realestate. com.au Home Loans this year as part of a push to make its business a one-stop-shop for property purchases, sales and financing. Under the partnership – part of a strategic plan announced in December – consumers will have access to home loans from NAB, plus a realestate.com.au ownbranded product.
The Smartline acquisition and the partnership are expected to contribute, net of broker commissions, between $26 million and $30 million in revenue in the coming financial year.
REA, which is majority owned by Gold Coast Bulletin publisher News Corp, estimates an earnings contribution of between $7 million and $11 million for the same period.
The digital real estate advertiser’s revenue hit $337.3 million in the six months to December 31 – up 16 per cent on the same period a year earlier – while its net profit more than doubled to $292.1 million.
REA chief Tracey Fellows said providing a broker solution would boost the financial services that the company was building for consumers.
“These investments allow us to enter a new market with two of the industry’s most trusted and successful mortgage broking operations,” Ms Fellows said.
“It’s about giving people greater choice when selecting the right home loan for them.”
NAB executive general manager Anthony Waldron said consumers would also find it easier getting access to online advice and guidance from mortgage brokers.
Shares in REA closed down 0.3 per cent at $66.08.