Big Banks, you’re fired: Mark Bouris ties Celebrity Apprentice launch with YBR mortgage discount offer

Armed with cheap funding from Macquarie Bank and the ability to market his Yellow Brick Road franchise brand on prime time Celebrity Apprentice television, Mark Bouris is taking on the major banks with a mortgage discount offer that claims to undercut their best offerings.

A week before the third season of Celebrity Apprentice begins on Channel Nine, Yellow Brick Road has unveiled its offering of a 1.25% discount for all borrowers who take out its variable rate Empower Home Loan for the first year of the loan.

Afterwards the introductory 12 month rate of 5.15%, the loan reverts to a lower lifetime discount rate of between 0.86 percentage points and 0.91 percentage points off the standard variable rate, currently at 6.40%.

The loan has no application fee, with Yellow Brick Road pointing out that the discounted rate is offered “across the board” not just to those borrowers who meet minimum loan size requirements as is required by the major banks to be eligible for the best variable rate offering.

In an ASX press release issued to announce the discounted offer, Yellow Brick Road includes a table comparing its 5.15% introductory offer with the best discount rates offered through home loan packages from ANZ (5.7%), Westpac (5.61%), St.George (5.59%), Commonwealth Bank (5.60%) and NAB (5.58%).

The Empower Home Loan product is entirely funded by Macquarie Bank following last November’s wholesale funding agreement.

Macquarie Bank also has an 8.3% stake in Yellow Brick Road and is key player in Bouris’s ambition to make Yellow Brick Road a significant competitor to the dominance of the big four banks in the mortgage market.

Channel Nine also has an interest in the success of the mortgage product with its Nine Ventures consumer investment group holding an 18% stake in Yellow Brick Road.

The most recent full year annual accounts show that Yellow Brick Road paid Channel Nine $2.65 million last year to sponsor The Apprentice television series for three years.

So expect to see plenty of Yellow Brick Road branding and merchandising every Tuesday and Wednesday night for an hour and half over the next five weeks or so and no doubt plenty of promotion of the discount mortgage offer.

This latest discount offer is an improvement on its earlier 1.15% discount offer launched in November last year under the slogan: “Smash your home loan” following the funding agreement with Macquarie Bank.

Bouris, the hirer and firer on Celebrity Apprentice, has made no secret of his desire to take on the major banks and become a true fifth pillar competitor andbe revelling in his role of both mortgage and media “wizard” – harking back to the late 1990s and early 2000s when Wizard Home Loans and John Symond’s Aussie Home Loans took on the major banks.

Bouris has ramped up the anti-bank rhetoric since signing the funding agreement with Macquarie in November last year.

“Yellow Brick Road is focused on taking market share from the incumbents,” reads the ASX press release.

In its annual results, Bouris and Yellow Brick Road chief executive Matt Lawler write:

“Overall the business has positioned itself as a competitor and challenger to the major banks. This position is now regularly being recognised and acknowledged by politicians, investment researchers and media commentators nationally.”

Earlier this month, Bouris told Fairfax Media he needed to settle around $350 million worth of new loans a month - around 5% of the value of mortgages banks sell through their branches – to force banks to adjust how they price their home loans.

Bouris said he was confident of doubling Yellow Brick Road’s mortgage book as it did in 2012.

While Yellow Brick Road remains a minnow mortgage lender compared to the gargantuan-sized mortgage books of the major banks, it is growing at rapid pace.

In January it reported a record month with loan settlements up 106% on January 2012 and 43% higher than its previous best month amid a “groundswell of consumer demand”.

It’s most recent full year results for the 12 months to December 31 show the Yellow Brick Road mortgage book grew by 114% to $1.26 billion compared with $590 million in the previous full-year period.

Franchise branches grew from 91 to 149 over this period while representatives licensed to provide credit and/or personal financial advice increased from 80 to 126.

Season three of Celebrity Apprentice, will begin on April 30 featuring among its contestants Olympic swimming legend Dawn Fraser, boxing champ Jeff Fenech, rocker Brian Mannix and AFL's Dermott Brereton – all of whom will be seen in Yellow Brick Road merchandise at various points in the reality game show.