Macquarie Bank’s Italian mortgages operation opens for business

14 September 2005

Macquarie Bank today announced the opening of its retail mortgage branches in both Milan and Rome, continuing the international expansion of Macquarie's mortgage activities into Europe.

Retail offices were opened in both Milan and Rome, with the business headquartered in Milan. The Rome branch was officially opened by the Australian Ambassador to Italy, Mr Peter Woolcott.

The Italian mortgage market is the seventh largest mortgage market in the world and at €158 billion has experienced 42 per cent growth between 2000-2003. Consequently, Italy has one of the highest home ownership ratios in the world.

Speaking at a press conference held today at the Milan Stock Exchange to announce the branch openings, Macquarie Bank Executive Director and Head of the Banking and Property Group, Mr Bill Moss, said: "The Italian market has significant potential for an innovative mortgage provider such as Macquarie and offers opportunities for growth in both the short and long term."

"We will leverage off our mortgage businesses in both Australia and the United States to bring innovative products into the Italian market for the benefit of local customers. In Australia, Macquarie pioneered cheaper loans for home owners when it helped finance the mortgage origination industry in its infancy through the securitisation of mortgages," he said. The Italian mortgage business will also be funded through securitisation.

Macquarie has international experience at introducing multi featured and functional mortgages into international markets, such as Line of Credit, fixed instalments and interest-only products.

Macquarie's product range in Italy will include standard principal and interest loans, complemented by a range of other product features including fixed and capped rates, and fixed instalment and interest only loans.

Macquarie Mortgages has grown its business in the USA from an initial representation in Arizona in 2002 to now cover 24 states in 2005. In Australia Macquarie has over $15 billion of mortgages on its books.

"We believe we have secured a professional and experienced management team in Italy who have considerable experience between them in providing excellent service to Italian home owners. The team is led by Adrian Hill, former Managing Director of Abbey National Bank Italy (ANBI). Under his team's management, ANBI grew its loan book to capture 5 per cent market share in the Italian mortgage market between 1996 and 2003," said Mr Moss.

Adrian Hill commented that the Italian mortgage market still has space for innovative, flexible newcomers and that Macquarie looks forward to meeting the needs of the Italian consumer in the acquisition of their homes and thereafter.

It is envisaged that business will be originated through three primary distribution channels:

• Indirect - national brokers, financial adviser networks, national real estate chains
• Direct - branches, specialised financial promoters with Macquarie point of sale agencies, internet (www.mutuomacquarie.it) and call centres
• Semi-direct - referrer network which includes local estate agents, small banks, local financial promoters and insurance agent networks, lawyers and commercial advisers.

Commenting on the litigation commenced in Italy against Macquarie by Unicredit, one of Italy's largest banks, Mr Moss said: "Unicredit has obtained an interim injunction that restricts Macquarie from fully utilising for a period of six months, the services of 14 mortgage brokers who joined Macquarie from Unicredit. Macquarie will be appealing the decision.

"This interim decision of the Milan Court will have no impact on Macquarie's commitment and strategic approach to the Italian mortgage market, and will not divert us from our primary objective - to position ourselves in the Italian market with an innovative product and service offering, underpinned by the experience of Macquarie in international mortgage and securitsation markets since the early 90s."

For further information, please contact:

Adrian Hill
Head Macquarie Mortgages, Italy
Tel: 0039 02 4149 6005

Frank Ganis
Executive Director and Global Head of Mortgages
Tel: (612) 8232 3071

Matthew Russell
Public Relations
Macquarie Bank Limited
Tel: (612) 8232 4102
Mobile: (614) 1069 9532