ASIC cancels AFS licence for mortgage arm of Banksia Financial Group

ASIC cancels AFS licence for mortgage arm of Banksia Financial Group
ASIC cancels AFS licence for mortgage arm of Banksia Financial Group

The Australian Securities and Investments Commission (ASIC) has cancelled the Australian financial services licence of Banksia Mortgage Limited.

Banksia Mortgage is the mortgage provision arm of Victoria’s Banksia Financial Group, a non-bank lender which collapsed in 2012.

The Supreme Court of Victoria made orders authorising Banksia Mortgages to wind up the Banksia Mortgage Fund in August last year. The portfolio of funds was sold in December 2013, with $85 million distributed to 1,200 investors.

Banksia Mortgages applied to ASIC to cancel its financial services licence earlier this month to cut costs and allow the transferal of money to another Banksia subsidiary, Banksia Securities limited.

According to ASIC, most Banksia Mortgage Fund investors have received 100% of their money plus interest, with about 108 still to be paid the entirety of their money. Banksia Securities Limited investors have so far received 80 cents to the dollar from receiver McGrathNicol.

The Banksia Financial Group’s $650 million collapse has affected thousands of investors, mostly in regional Victoria. Prior to its collapse, its equities to loan ratio stood at 3.6%, meaning that the lender held $3.60 for every $100 of loans. 

Tags: 
Mortgages Asic

Community Discussion

Be the first one to comment on this article
What would you like to say about this project?