Yellow Brick Road (YBR) executive chairman Mark Bouris has succeeded in making national news headlines with a deal that will see Macquarie Bank fund a new range of Yellow Brick Road-branded mortgage products through the franchise.
After a trading halt on YBR stock fuelled rumours of the Macquarie deal, YBR confirmed it would launch an "aggressive expansion into financial services" with the aid of Macquarie.
YBR hopes to drive initial demand for a new range of mortgages by kicking off with a discount of 1.15% off its standard variable rate of 6.65% for the first 12 months and a guaranteed 0.86% discount for the life of the loan.
YBR chairman Mark Bouris said the deal will give YBR access to billions in funding according to the Australian Financial Review, and would use it to become a new force for competition.
"The big four banks have had it for themselves and it is now time for some of that market share in home loans to go into others," Bouris told the Financial Review.
"This is war and now I've got a big and aggressive and a smart bank in Macquarie in my corner and that makes a big difference," he said.
Macquarie was one of the key players responsible for stimulating mortgage competition in the 90's, when Aussie was able to undercut major bank mortgage rates significantly.
Bouris played up the idea that YBR could be the start of a new 'fifth pillar' of the banking industry.
“Two goals in life – put a roof over your head and retire comfortably. Everyone in Australia is entitled to that, not just the privileged few,” Bouris said.
“This venture is about bringing back choice, access and competition like there was in the 90’s. Plenty of commentators, including politicians, talk about the need for competition, but there is only one way that is going to happen and that is Yellow Brick Road taking the initiative."
The group promises the white label product will be followed by further banking and wealth management products in 2013.