“Aussie” John Symond built his business as an alternative to the big banks, but Symond today reveals why he decided to sell out to Commonwealth Bank.
The Aussie Home Loans executive chairman and founder agreed for the Commonwealth Bank to increase its shareholding in Aussie Home Loans to 80% by acquiring a further 47%, with the sale requiring approval from regulators.
Under the deal, Symond will continue as executive chairman of Aussie for four years and will retain a 20% shareholding, while continuing to be involved in the growth and direction of the business.
Symond told SmartCompany he was not selling out and it was business as usual for Aussie.
Despite reports the sale price was around $300 million, he would not reveal how much Commonwealth Bank paid for Aussie, only to say “it is a fair price that I was happy with and they were happy with.”
“Commonwealth Bank came in as a 33% owner a bit over four years ago. It’s given me and Commonwealth Bank a chance to look at each other, see how we operate, and they have been very good shareholders and investors,” he says.
Symond says Commonwealth Bank has allowed Aussie “to continue to do its own thing” and respects the “integrity” of the Aussie business model, which provides hundreds of different loan choices and a panel of 18 lenders.
“Commonwealth Bank appreciates and accepts that consumers want choice and don’t just want to deal with one bank or provider,” he says.
Symond says Aussie has been “very successful and profitable” and Commonwealth Bank recognises the distribution channel Aussie has is something it doesn’t have, and Commonwealth Bank can provide more products and services for Aussie.
“Our feeling is it is a bigger, better Aussie with more choice and services for consumers and that has to be good for competition,” he says.
Symond denies he has compromised Aussie’s independence by selling out to the Commonwealth Bank.
“I say to people, we have tried very hard for 21 years to earn the trust of consumers and we have got a lot of runs on the board. I ask them to trust us – time will tell,” he says.
“At the end of the day, if we don’t have compelling products and services at exceptional prices I don’t expect people to support us. I’m hoping to reach out to even more customers and grow the business.”
Symonds says “actions are more important than words” in convincing consumers Aussie is still on their side.
“We have demonstrated our fighting for consumers for 21 years, we have 21 years of unblemished consumer championing,” he says.
As for Symond’s future, he says he is committed to four years at Aussie as executive chairman but won’t be drawn beyond that: “Who knows what will happen after four years from now.”
After riding out the global financial crisis and successfully selling the majority of his business, Symond has a few hints for fellow entrepreneurs and SmartCompany readers:
Symond says entrepreneurs need to be very focused and committed to their business.
“I have never had any other business interest outside Aussie, I have never allowed myself to be distracted and play the stock market,” he says.
“I have kept my eyes on the ball; having fingers in different pies stops you having total focus on the main game. Focus is really, really important.”
“Small business and entrepreneurs are always short of money and the best way to grow your business is to identify partners to help you in areas where you don’t have products or resources,” Symonds says.
He says he has grown Aussie by identifying businesses to partner with who share the same vision.
“You have to share long-terms views and visions and the best way of growing business without squillions of dollars is identify partners with products and services that complement your business.”
Despite heavily marketing Aussie as an alternative to the big banks, Aussie became a broker selling other banks’ home loans – alongside its own products – in 2003 to maintain growth as banks reclaimed market share by adding new features that could not be easily matched by non-bank lenders.
Symonds was already pretty clear on the old mantra, “If you can’t beat ‘em join ‘em”.
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Cara Waters is a former SmartCompany editor. Previously, Cara was a senior reporter for the Financial Times’ website and worked for The Sunday Times in London.
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