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News Corp branches out into home financing

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REA Group has agreed to buy a majority stake in mortgage broker Smartline as the real estate classifieds business moves into home financing.

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The News Corp-controlled group will acquire an 80.3 per cent stake in Smartline for $67 million, which will be funded from existing cash reserves, REA said in a statement on Tuesday.

The remaining 19.7 per cent shareholding of Smartline, which has over 300 advisers nationally and settles more than $6 billion in loans a year, will be retained by the existing management team.

Realestate.com.au also said it has teamed up with National Australia Bank to offer consumers access to the lender’s broking service this year.

The partnership, part of a strategic plan announced in December 2016, will allow consumers to access home loans from NAB, plus a realestate.com.au own-branded product.

REA expects its financial services segment will contribute, net of broker commissions, between $26 million to $30 million in full year revenue in 2018.

It estimates its earnings to be between $7 million to $11 million for the same period.

The group’s chief executive Tracey Fellows said building a strong presence in the broker market will be a critical part of the group’s financial services strategy.

“These investments allow us to enter a new market with two of the industry’s most trusted and successful mortgage broking operations,” Fellows said in a statement.

“It’s about giving people greater choice when selecting the right home loan for them.”

REA’s shares were down 0.42 per cent at $65.95 just after open on Tuesday.

– AAP

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