“This will have significant brand impact I expect. It’s not really a good look. Their brand values have been built around independence and fighting for the little guy against the big banks, which is a positioning they’ve developed over 20 years.”
Hogan disagrees, saying most customers won’t care. “As long as Aussie doesn’t start adopting Commonwealth Bank behaviours, its current customers probably won’t really care all that much,” she says.
“People talk a lot about the potential impact of these mergers, and fundamentally, if they don’t alter what a company does, if they don’t alter its operations or how it communicates with and services its customers, then the potential downside is pretty small in the end.”
Rowell isn’t so certain there’ll be no changes to how Aussie operates now that it’s owned by the Commonwealth Bank.
“It’s not just about Aussie, but about what the other banks do,” he says. “Will they continue to support Aussie in the long term? Will they want to be suppliers now that a fee will go to the Commonwealth Bank?”
Aussie Home Loans says it will continue to offer loans from 18 different lenders. “Will customers buy that? I’m not sure,” Rowell says.
Symond has committed to staying with Aussie until 2016. Both Hogan and Rowell say this provides plenty of time to strengthen the brand to the point where it will survive without him.
Some entrepreneurs have managed to retain the brand value of their businesses after they sell ownership better than others. Hogan nominates Richard Branson, who remains highly regarded despite having sold many of his Virgin businesses to large corporations which do not necessarily align with the Virgin brand.
Will customers notice about anything this close to Christmas, and was that the intention of making the announcement yesterday?
“I’m sure it was a consideration,” Hogan laughs. “These things are never coincidence, although to give them the benefit of the doubt, these kinds of deals take a while to figure out. It could just be that they only finished it now.
“I would be more suspicious if they’d announced it between Christmas and New Year’s Eve,” she says. “That’s the really dead zone.”
Many of Aussie Home Loans’ competitors have either been purchased by banks or entered into partnerships with them in recent years. RAMS Home Loans has been owned by Westpac since 2007. Mark Bouris’ Wizard Home Loans was sold to GE Money in 2004, and in 2007 GE Money sold the non-bank mortgage lender to Aussie Home Loans. Bouris now runs wealth manager Yellow Brick Road, which this November announced it would start to offer home loans through a joint venture with Macquarie Bank.
Myriam Robin is a reporter for SmartCompany and its sister site LeadingCompany. She has degrees in economics, international studies and journalism. She likes writing about businesses taking risks and doing new things.
