Nat. Bank aims to grow road rep 'contribution'

Nat. Bank aims to grow road rep 'contribution'

Nat. Bank aims to grow road rep

Brokers may represent too much of a good thing for National Bank, its president suggesting the lender will ease up on their use as it focuses on growing originations through, ahem, road reps and branches.

“In Ontario, we’ve seen good volume growth,” President and CEO Louis Vachon told analysts during a conference call Thursday. “A lot of that is coming – 40, 45 per cent – from brokers.

“Clearly, for the next few quarters we are going to look at net margins in that business … and we’re going to look at hopefully increasing the branch and mobile sales force contribution in Ontario and (although) we’re not pulling out of the mortgage brokers market, on a relative basis we’d like to reduce it a little bit.”

The comments came with the release of second quarter results pointing to a 13 per cent rise in the funded volume of residential mortgages, compared to the year-ago period.

Brokers, outside of Quebec, have contributed a disproportionately large share of that business to the bank, at the same time National has focused on cross-selling to those broker clients, according to bank officials.

Still, despite those cross-selling opportunities, profit margins attached to broker sales have hemmed in profit, suggested bank execs during Thursday’s conference call. The lender is now looking to transfer a greater share of originations outside its home province of Quebec to its proprietary branch network and mobile mortgage specialist teams.

That formula would better mirror the model used with La Belle Province, suggested Vachon, quick to reaffirm the bank’s commitment to the continued use of brokers.

Mortgage professionals have grown their reliance on National Bank, pointing to varied product line and broker services. At the same time the lender has also worked on building relationships with Realtors as a way of winning direct client referrals.

Some brokers have objected, arguing it effectively circumvents the broker channel and may limit client options.

  • Bill Nugent 2012-06-06 5:16:14 AM
    We have mentioned for years when we have had the opportunity to address officials of the different lenders that brokers are more than willing to work with the financial institutions to cross sell their products. We are able to have the client approved for a $1,000,000 mortgage but unable to sell them a unsecured credit line, visa or bank account. Brokers know that cross selling is important but the lenders have to trust them to do the job if they are given the tools to do this for them. at the end of the day it is in our interest to have the financial institutions healty as we do not need any more exits from the broker channel.
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  • No Cross Selling 2012-06-06 5:28:01 AM
    I have no interest in cross selling for the fi. Thats their job whether they can keep their clients. Dont wanna be bog down over selling an anxilary service. Thats watch they have branches for.
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  • Ron Butler 2012-06-06 5:41:13 AM
    It's funny when you see someone puts their on name on the post like Bill did it's usually a thoughtful insight.

    When it's a "too heck with the lender post" it's always No Cross Selling.

    I respect the fact some of us may not wish to cross sell the FI products; but can't we see that if we are relentlessly non-supportive of lender profits we run the risk of losing the lender. Competitive rate mortgages are a slim margin business and we should all listen to ideas that keep quality lenders on side.
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