Macquarie to Cease Car Loans to Focus on Mortgages and Deposits

In a significant shift of focus, Macquarie's banking and financial services division announced on Monday that it will stop writing car loans to concentrate its efforts on expanding its market share in the mortgages and deposits sector. Unfortunately, this strategic move will result in approximately 100 job losses within the company.

Final Call for Car Loan Applications

The Financial Review reported that Macquarie will no longer offer automotive loans under its brand starting Monday, providing brokers a tight 48-hour window to submit any last-minute car loan applications. This rapid transition will see the product turned off for brokers by mid-May, marking the end of an era for Macquarie's involvement in the car loan sector.

Impact on the Workforce

According to Ben Perham, Macquarie's head of personal banking, the decision will predominantly affect bankers in sales, credit, and customer-facing teams, leading to their displacement. There is a silver lining for a select few redeployed within the company. Meanwhile, Macquarie assures it will continue to service existing car loans until they are fully resolved over the next few years.

Strategic Focus on Core Products

Perham highlighted that this pivot allows Macquarie to double down on mortgages and deposits, areas where the company has been making significant inroads against major and regional lenders. In February, the Australian Competition Tribunal described Macquarie as a "maverick" competitor. Macquarie aims to invest heavily in these core products, leveraging leading digital experiences and state-of-the-art technology platforms to attract more customers.

Background and Industry Trends

According to US News, the transition from car lending comes after years of winding down in this sector, with Macquarie's car loan book shrinking dramatically from $15.2 billion in 2019 to $4.8 billion by the end of December 2021. This recalibration away from automotive finance mirrors a broader industry trend, with other major banks retracting from the sector—Westpac exited car lending in 2021, for example.

Looking Ahead

Regarding this strategic shift, Macquarie has commenced communications with brokers, who have historically written the bulk of its auto loans. Loans submitted by the impending deadline will be honored under existing policies, with a settlement deadline set for May 17.

This move coincides with Macquarie's aggressive push to increase its share of mortgages and deposits, challenging incumbents and solidifying its position as Australia's fifth major bank.

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