National bank crediting brokers ... and Realtors

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A warm welcome for brokers, compared to other lenders, helped National Bank grow its residential mortgage book by 13 per cent in the first quarter, according to a top exec -- although the growing use of Realtors didn't hurt.

“We’ve been a little bit more receptive to mortgage brokers than quite frankly some of our competitors, who have been more ambivalent,” Réjean Lévesque, an executive VP for the bank, told analysts Friday. “We have increased mortgage deployment officers doing business with real estate agents, but (the growth) has also come from the broker side of the business. Outside of Quebec, 40 per cent to 45 per cent of originations came from that (broker) channel.”

That dual embrace of brokers and Realtors not only helped Canada’s No. 6 increase its residential mortgage book by 13 per cent, but achieve its highest-ever first quarter profit.

Its net income of $332-million, represents a 3 per cent rise from the same period last year, corresponding with its own increasing share of broker business.

That improved position has come from building relationships with brokers and not, said Lévesque, from an aggressive broker compensation or interest rate strategy.

In fact, the bank was the last to move to match BMO’s 2.99 per cent offer in January, Lévesque told one sceptical analyst Friday.

The fact that Realtor referrals have also grown makes good on the bank’s pledge last year to develop that pipeline.

Brokers have generally objected, calling it “disintermediation” – or a move to cut out the middleman; ie, them. They also argue that it limits consumer options.

Under a National Bank program last year, Realtors won 50-basis point referral fees for sending their mortgage-seeking clients directly to the branch. That mirrors similar programs at other big banks.


  • Jeremy on 2012-03-03 5:33:23 AM

    I see a theme here...those who participate in the broker channel meet or exceed analyst expectations. BMO, HSBC and now CIBC, what are you guys thinking?

  • Kevin on 2012-03-03 5:39:57 AM

    Stop sending deals to the big banks. Non deposit taking institutions don't deal with Real Estate agents;

  • broker on 2012-03-03 5:49:00 AM

    I'm surprised National bank is successful in the broker market for many reasons: 1)their mortgages are collateral/demand loans and we all know how bad this is for the client; 2)they are so aggressive on renewing clients that once you send them a client you lose them forever; 3)their service to brokers is the worst in the industry; 4) their underwriting guidelines are ridiculous - good luck getting a deal approved by them; 5)they always mess up the client's mortgages where clients get statements a month later with the wrong rates; 6)the rates they offer brokers are not competitive; 7) they have an agressive group of bank reps who get better rates than brokers; 8)they pay realtors 50bps for just referring a name, which squeezes us brokers out. I don't get why a broker would use them. I really don't!

  • Gord McCallum on 2012-03-03 6:33:13 AM

    I trust that they're not dealing with Realtors in this way in Alberta because it's illegal.

  • Stephane Prevost on 2012-03-03 6:40:30 AM

    Buyer Beware. Do Realtors really have your best interest or do they simply want $. Get this people. The person who is least educated is the one often making the referral and is already paid the most in a transaction and the person who is the most educated is the lawyer who makes the least out of the transaction. Statistics show that average realtor sales are only 6-8 deals a year. How valuable is the advise of a realtor who doesn't produce?

  • Mtgs agent on 2012-03-04 5:28:14 AM

    As a broker, I'd be happy to be paid 50bps for just suppling a name to the branch. It's half of we are paid but hey, younger paid for just a name.

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