Banking giant Westpac has closed down home loan lender RAMS Financial, but says customers of the mortgage franchise won’t be affected by the move.
In a statement to the Australian Securities Exchange, Westpac confirmed it would close subsidiary RAMS to new home loan applications from Tuesday as part of a ‘strategic review’ to simplify the bank’s business.
‘We have delivered considerable portfolio simplification over recent years and after a thorough review, have decided that offering home loans through RAMS franchisees is not right for Westpac,’ managing director for mortgages Damien MacRae said.
‘We will help our customers, franchisees and our people through this process.’
Westpac said existing RAMS customer loans would remain in place and customers could continue to access services through the RAMS app, website and call centre.
Westpac will contact customers to assist them with current RAMS mortgage applications, the bank added.
‘We are also providing franchisees with mutually agreed support and there will be ongoing opportunities for RAMS employees within Westpac,’ Mr MacRae said.
Westpac will retain RAMS’ portfolio of loans, estimated at $31.8bn.
Westpac confirmed it was closing RAMS to new home loan applications, but the move won’t affect current RAMS customers (pictured a Westpac branch in Melbourne)
Westpac bought RAMS in 2008 for $140m. RAMS first opened in 1991 (pictured a RAMS franchise)
It is not clear how many RAMS employees will be impacted by the closure.
RAMS was founded in 1991 and became one of Australia’s largest non-bank provider of home loans.
Westpac bought the company in 2008 for $140m.
Earlier this year, Westpac tried to sell RAMS but cancelled the sale after failing to find an acceptable bid.
In May, disgruntled RAMS franchisees launched a class-action lawsuit through Morris Mennilli Lawyers following the termination of some franchise agreements.
A Westpac spokesman said RAMS took its obligations seriously and would defend the claim.
Morris Mennilli Lawyers has been contacted for comment.
It is also understood the Australian Securities and Investments Commissions and the Australian Prudential Regulation Authority are investigating RAMS, though the details of the investigations are not known.
