My Opinion
Opinion

Big week for ASB

What an interesting week it has been for ASB Bank. First up the bank cracked the $1 billion profit mark for the first time ever. While some people will look at this with opprobrium it's a credit to the bank especially considering how difficult the lending environment is at the moment.

What an interesting week it has been for ASB Bank. First up the bank cracked the $1 billion profit mark for the first time ever. While some people will look at this with opprobrium it's a credit to the bank especially considering how difficult the lending environment is at the moment.

We were interested to find out more about the make up of their lending portfolio. Other banks are pretty open about this, but for some reason ASB isn't, even though its parent company, Commonwealth Bank, does provide this breakdown on its book and on another of its subsidiaries, RBS. 

Perhaps the most interesting news is that CBA is looking to sell Sovereign. (Stories here and here)

This is major and will no doubt have many advisers a little bit worried.

Sovereign has over the years got rid of its investment and superannuation businesses. Its focus has been on life insurance and home loans.

It will be interesting to see what would happen with any sale. My guess is that the home loan business wouldn't be included and ASB would just suck it back into the bank. As I understand it the lending is run out of the bank anyway.

The big question, if this happened, would be this: Would ASB continue with the trail commission model or would it stick to upfronts only?

Over the years ASB have always said it offers both remuneration models, if an adviser wants upfront use ASB, if you want trail use Sovereign.

But that's not all for ASB this week. It made special reference to its online fixed rate rollover tool,saying 70% of refixes are done this way now. You can read the full story here.

 

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