RAMS founder eyes return to home loans market
Author: By COLIN KRUGER
Date: 13/11/2009
Words: 215
Source: AGE
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Publication: The Age
Section: Business
Page: 3
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TWO years have passed since RAMS Home Loans founder John Kinghorn was forced to sell the business to Westpac to stave of collapse. Yesterday he told investors in what remains of its listed entity, RHG Ltd, conditions were almost ripe to take the banks on again. RHG, which made a record $120 million profit last financial year from the mortgage loan book it retained after selling the business to Westpac, expects the loan book to wind down by 2011, at which time it will return funds to shareholders unless "an exciting investment opportunity arises", Mr Kinghorn has said.Yesterday he indicated shareholders might be asked to back a bid to re-enter the home loans market.Mr Kinghorn said RAMS first entered the home loan market "at a very opportune time" when the banks had very little competition and fat margin spreads between borrowing costs and what they charged for their mortgages. "We are moving very rapidly to those market conditions again," he told investors.Access to credit markets, which froze in 2007, is still the missing ingredient. "It's quite possible by 2011 conditions will be there," he said.Coincidentally, by January 2011, RHG will no longer be prevented from re-entering the home loan market by Westpac, which told businessday yesterday that the RAMS business was "doing outstandingly well forus".
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