Why it matters: Lenders say irrational pricing and ultra-competitivity has made NZ a hard market to crack.
Yet, even as major banks pull away, Pepper has splashed cash to acquire HSBC’s NZ loan book.
CEO Mario Rehayem says the banks are right.
But the acquisition gives Pepper the scale to capitalise on future opportunities.
The New Zealand home loan market is irrational, unprofitable and ultra-competitive, major banks say. Still, that has not stopped non-bank lender Pepper Money from picking up HSBC’s mortgage book, as New Zealand’s Commerce Commission launches a probe into the banking sector.
Pepper chief executive Mario Rehayem said Australian banks were right when they argued the market was hard to crack, yet argued that the HSBC deal was still needed because it would take “three to four years” to build a portfolio as big.
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Lucas Baird is a journalist based in The Australian Financial Review's Sydney office. Connect with Lucas on Twitter. Email Lucas at lucas.baird@afr.com
