CBA counting down the week until ACCC Mortgage Choice decision

Mortgage broker Mortgage Choice should know by the end of the week whether it will be 17% owned by the Commonwealth Bank. 

The Australian Competition and Consumer Commission (ACCC) is expected to rule on Friday, November 17 whether to allow the Commonwealth Bank to acquire financial planner Count Financial for $373 million, thereby acquiring Count’s 17% stake in Mortgage Choice.

Other substantial shareholders in Mortgage Choice include founder Rodney Higgins, who has a 13% stake and investment firms Invesco Australia (7%), Paradice Investment Management (13%) and Renaissance Smaller Companies (5%). 

Following the bank announcing its intention to acquire Count, Mortgage Choice CEO Michael Russell said he expected the bank to offload its stake in the mortgage broker to allow the merger to go ahead. 

He told Australian Brokernews that a decision by the bank to keep its stake in Mortgage Choice would be met by “trepidation” by brokers. 

Concerns about a potential conflict could also surface since the Commonwealth Bank is one of the largest lenders on the Mortgage Choice panel. 

A report in the Australian Financial Review following the announced takeover said the bank would be willing to sell its stake in Mortgage Choice to ensure the deal is approved. 

The ACCC reportedly delayed its decision on the merger to allow time for a submission from Mortgage Choice. 

The Commonwealth Bank already has a stake in the mortgage broking sector, as it owns a third of Aussie Home Loans. 

Should the Count Financial acquisition get the nod from the ACCC, as is expected, the bank will also acquire Count Financial subsidiary Finconnect, a small provider of mortgage broking services.