Big banks lashed for delaying business loan switchers

afr.com:

Judo says the big banks are still dragging their heels when customers want to switch business lenders amid growing regulatory scrutiny of potential anticompetitive conduct.

Chief executive Joseph Healy raised the issue of big banks delaying the discharging of small business loans more than two years ago, and said last week that bloated timelines had not improved.

Judo CEO Joseph Healy: “There are one or two banks, when Judo is on the other side, things slow down a bit.” Justin McManus

Judo says it takes an average of 52 days for a big bank to close a loan when Judo is seeking to refinance a customer. This is more than 2½ times longer than the average time banks take to release a borrower wanting to switch mortgages.

“It is an ongoing issue, it is not getting better. We will have a business that wants to move from a big bank to Judo, we contact the incumbent bank asking for a settlement figure – and it can take forever,” Mr Healy told The Australian Financial Review.

It is the second accusation in the past month about banks making it hard for customers to switch, after mortgage broker Lendi and the Mortgage & Finance Association of Australia highlighted the same issue and argued it was reducing competition in mortgage markets.

Lendi said last month the big four banks were taking an average of 20 days to discharge a mortgage, even though the Australian Competition and Consumer Commission found in its home loan pricing inquiry in 2020 that the maximum time should be 10 days.

Judo makes 75 per cent of its loans to small businesses which are refinancing away from one of the big four banks. Judo shares tumbled after it released its full-year results last week, which showed it failed to achieve a $9 billion lending target.

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